Domestic bourses pare losses to enter into green terrain

Indian equity benchmarks pared all of their initial losses to enter into green terrain as traders opted to buy beaten down but fundamentally strong stocks. Buying in healthcare and technology stocks too supported the upmove. Sentiments turned positive as a member of the Monetary Policy Committee (MPC) of the Reserve Bank, Jayanth R Varma expressed hope that in a few quarters from now, capital investment would begin to pick up even in the old economy, and said the next fiscal year is also expected to witness a decent growth. Traders took note of report that the GST regime will see a host of tax rate and procedural changes coming into effect from January 1, including liability on e-commerce operators to pay tax on services provided through them by way of passenger transport or restaurant services.

On the global front, Asian markets were trading mostly in green at this point of time, but gains were capped as China and Japan faced prospects of tighter curbs amid rising COVID-19 cases. Back home, banking stocks remained in focus with a private report that the banking sector is set to witness significant reforms in the coming year with privatisation of public sector banks and strategic disinvestment of IDBI Bank on the agenda of the government for 2022. Fertilizer stocks too remained in focus as the government decided to make changes to the existing nutrient based subsidy (NBS) policy to promote domestic production of phosphatic and potassic (P&K) fertilisers amid a sharp rise in global prices.

The BSE Sensex is currently trading at 57166.61, up by 42.30 points or 0.07% after trading in a range of 56543.08 and 57167.02. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.15%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.79%, IT up by 0.44%, TECK up by 0.31%, Power up by 0.30% and Utilities up by 0.22%, while Oil & Gas down by 0.68%, Realty down by 0.56%, Metal down by 0.53%, FMCG down by 0.37% and Energy down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.69%, Power Grid Corporation up by 1.35%, Sun Pharma up by 0.97%, Mahindra & Mahindra up by 0.96% and Ultratech Cement up by 0.63%. On the flip side, Indusind Bank down by 4.01%, Asian Paints down by 0.93%, ITC down by 0.64%, Maruti Suzuki down by 0.64% and Bajaj Finance down by 0.59% were the top losers.

Meanwhile, in order to promote domestic production of phosphatic and potassic (P&K) fertilisers amid a sharp rise in global prices, the government has decided to make changes to the existing nutrient based subsidy (NBS) policy. This decision will help in utilising the unutilised domestic production capacity of these fertilisers and promote Atmanirbhar Bharat.

Under the NBS policy, being implemented since April 2010, a fixed amount of subsidy which is decided on an annual basis is provided on P&K fertilisers depending on their nutrient content. Under this policy, maximum retail price (MRP) of P&K fertilisers is fixed by the fertiliser companies as per the market dynamics at reasonable levels which is monitored by the government. However, in the current 2020-21 fiscal, the government notified NBS rates for P&K fertilisers twice in order to keep domestic prices of these soil nutrients reasonable to farmers and ensure adequate supply.

Keeping in account high global prices, the government has also provided a special one time package for additional subsidy over above the NBS rates for period from October 2021 till March 2022 for Diammonium Phosphate (DAP) and three most consumed NPK fertilisers. The government has also included potash derived from molasses under the NBS scheme with effect from October, 2021.

The CNX Nifty is currently trading at 17015.50, up by 11.75 points or 0.07% after trading in a range of 16833.20 and 17018.75. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.11%, Cipla up by 1.18%, Mahindra & Mahindra up by 1.00%, Sun Pharma up by 0.92% and Dr. Reddy's Lab up by 0.70%. On the flip side, Indusind Bank down by 3.73%, Hindalco down by 1.39%, Eicher Motors down by 0.82%, Asian Paints down by 0.81% and Bajaj Finance down by 0.61% were the top losers.

Asian markets are trading mostly in green; Straits Times added 3.58 points or 0.12% to 3,111.86, Taiwan Weighted surged 102.69 points or 0.57% to 18,064.33, Jakarta Composite rose 3.66 points or 0.06% to 6,566.56 and Shanghai Composite was up by 5.53 points or 0.15% to 3,623.58. On the other hand, Nikkei 225 fell 84.89 points or 0.29% to 28,697.70 and KOSPI lost 11.57 points or 0.38% to 3,000.86.