Indian bourses extend gains in morning deals

Indian equity benchmarks extended their gains in morning deals on buying by funds and retail investors. Sentiments remained up-beat with the RBI’s latest article stating that prospects are brightening for the Indian economy achieving ‘escape velocity’ from the pandemic as the second wave of COVID-19 wanes and preparedness for future remains on war-alert status. It said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery. Traders also found some solace with Finance Minister Nirmala Sitharaman’s statement that the Union Cabinet has cleared a proposal to provide Rs 30,600 crore government guarantee for security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans.

On the global front, Asian markets were trading mostly in green as upbeat U.S. data released boosted expectations about Fed tapering. However, traders remain concerned about the impact of the rapid spread of the delta variant of coronavirus in the region and in several countries, particularly in the U.S., which continues to stifle economic activity. Back home, on the sectoral front, auto sector’s stocks remained in action as Society of Manufacturers of Electric Vehicles (SMEV) said that the production-linked incentive (PLI) scheme for auto and auto-components will build a self-sustaining framework for the e-mobility industry.

The BSE Sensex is currently trading at 59645.43, up by 504.27 points or 0.85% after trading in a range of 59384.76 and 59668.37. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.02%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Telecom up by 1.14%, Bankex up by 0.91%, Auto up by 0.88%, Consumer Durables up by 0.86% and Consumer Discretionary up by 0.80%, while Metal down by 1.38%, Power down by 1.26%, Utilities down by 0.79%, Basic Materials down by 0.72% and PSU down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.37%, Bajaj Finance up by 3.08%, Kotak Mahindra Bank up by 2.01%, Axis Bank up by 2.00% and Bharti Airtel up by 1.54%. On the flip side, Tata Steel down by 2.61%, Indusind Bank down by 0.30%, Ultratech Cement down by 0.29% and NTPC down by 0.24% were the top losers.

Meanwhile, Society of Manufacturers of Electric Vehicles (SMEV) has said that the production-linked incentive (PLI) scheme for auto and auto-components will build a self-sustaining framework for the e-mobility industry. The Union Cabinet has approved a Rs 26,058 crore PLI scheme for auto, auto-components and drone industries to enhance India's manufacturing capabilities.

SMEV has stated that the scheme will incentivise the emergence of advanced automotive technologies' global supply chain in India, with incentives worth around Rs 26,000 crore to be provided to the industry over the next five years. It noted that the scheme is especially beneficial for existing large players engaged in the automotive business and new entrants, as it will renew the interest of traditional players and motivate them to invest in the sector. It is estimated that over the five years, the PLI scheme for the automobile and auto components industry will lead to a fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.

Electric vehicle manufacturers' body further said the move will strengthen the manufacturing ecosystem and build a self-sustaining framework for the e-mobility industry. However, it said, most of the existing small and medium OEMs engaged in the EV automotive business and new startups may not be able to qualify for the scheme and will have to operate under the existing norms. It added that policies supported by fiscal and non-fiscal incentives are the pillars that drive consumer sentiment and accelerate the adoption of new products in the market.

The CNX Nifty is currently trading at 17770.60, up by 141.10 points or 0.80% after trading in a range of 17691.00 and 17774.95. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.38%, Bajaj Finance up by 3.10%, Eicher Motors up by 2.12%, Axis Bank up by 2.04% and Kotak Mahindra Bank up by 1.92%. On the flip side, Tata Steel down by 2.66%, JSW Steel down by 1.23%, UPL down by 0.65%, ONGC down by 0.47% and Hindalco down by 0.33% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 157.62 points or 0.52% to 30,480.96, Hang Seng increased 97.60 points or 0.4% to 24,765.45, Taiwan Weighted strengthened 83.99 points or 0.49% to 17,362.69 and KOSPI rose 4.80 points or 0.15% to 3,134.89.

On the flip side, Straits Times trembled 4.39 points or 0.14% to 3,060.15, Jakarta Composite lost 11.06 points or 0.18% to 6,098.88 and Shanghai Composite declined 21.38 points or 0.59% to 3,585.71.