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Benchmarks trade firm in early deals; Capital Goods, Healthcare lead
Aug-10-2020

Indian equity benchmarks made positive start on Monday and soon gained traction. Markets are trading firm in early deals with gains of around a percent each, supported by buying in all the sector indices except metal. Broader indices are outperforming larger peers with gains of over a percent each. Sentiments got boost after Prime Minister Narendra Modi launched a financing facility of Rs 1 lakh crore under the Agri-Infra Fund that will help create post-harvest infrastructure in villages and generate jobs. Adding more optimism, Niti Aayog CEO Amitabh Kant said that India's FDI regime is the most liberal in the world, and even during the COVID-19 pandemic, the country has attracted over $22 billion worth of direct investments. Meanwhile, the count of coronavirus cases in India jumped to 2,214,137, with the country reporting 62,117 new infections. The death toll from the pandemic reached 44,466, according to the Worldometer website.

On the global front, most of the Asian markets are trading in green amid reports that US President Donald Trump has signed executive orders aimed at extending coronavirus relief to Americans. In addition, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said they were open to restarting talks on funding, raising hopes of additional stimulus measures. Nevertheless, worries about escalating US-China tensions weighed on the markets. The market in Japan is closed for Mountain Day.

Back home, telecom stocks were in focus as the Supreme Court is expected to give its final verdict in the AGR case today. This will decide whether the telecom companies will be allowed a relaxed payment structure for clearing the dues they owe to the Union government. In scrip specific developments, Cipla gained on reporting a 26.58% rise in its consolidated net profit to Rs 566.04 crore for the quarter ended June on the back of robust sales. On the other hand, Punjab & Sind Bank was under pressure as its net loss widened to Rs 116.89 crore in the first quarter ended June 30, mainly due to mounting bad loans.

The BSE Sensex is currently trading at 38366.13, up by 325.56 points or 0.86% after trading in a range of 38163.71 and 38379.54. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.39%, while Small cap index was up by 1.09%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.24%, Healthcare up by 2.78%, Industrials up by 2.01%, Bankex up by 1.34%, PSU up by 1.15%, while Metal down by 0.34% was the sole losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.55%, Mahindra & Mahindra up by 2.81%, Bajaj Finance up by 2.09%, Kotak Mahindra Bank up by 1.80% and HDFC up by 1.48%. On the flip side, Asian Paints down by 0.68%, Tata Steel down by 0.59%, Maruti Suzuki down by 0.58%, HCL Technologies down by 0.30% and Nestle down by 0.27% were the top losers.

Meanwhile, former Niti Aayog Vice-Chairman Arvind Panagariya has said that India is going to need perhaps 'a little bit of stimulus' on the demand side as the country’s Gross Domestic Product (GDP) growth begins to pick up. He also said that imposing import licensing will be a violation of WTO norms that India has signed.  He said 'down the road, as the economy is continuing to open up, if we see that inventories are accumulating rapidly then that would be a clear sign that there is a demand deficiency problem.’

Panagariya has pointed out that even with the current level of intervention, India is staring at the debt-to-GDP ratio rising from 72 percent to about 85 percent at least by the end of the current year. He noted that the government in May announced nearly Rs 21 lakh crore stimulus package to help the nation tide over the economic crisis induced by the coronavirus and subsequent lockdowns. He opined that a large fiscal stimulus in India would not have produced result as it has not given results in the US or Europe. He argued that large stimulus could help if the supply curve is positively sloped.

Talking about the government's 'Aatmanirbhar' programme, he said ‘Aatmanirbharata (self-reliance) does not require that you got to produce everything that you consume. Import substitution is not a good idea. What worried me actually, is turn in the policies that have happened three years ago and the trend has not reversed itself.’ He noted that he does not think that the talk of 'Aatmanirbharata' accelerated the process of import substitution policies.

The CNX Nifty is currently trading at 11320.55, up by 106.50 points or 0.95% after trading in a range of 11261.10 and 11326.50. There were 41 stocks advancing against 8 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 4.66%, Mahindra & Mahindra up by 4.63%, Larsen & Toubro up by 3.92%, Shree Cement up by 2.71% and SBI up by 2.28%. On the flip side, Maruti Suzuki down by 1.30%, Hindalco down by 0.99%, Hero MotoCorp down by 0.78%, BPCL down by 0.37% and Bharti Airtel down by 0.31% were the top losers.

Asian markets were trading mostly higher; Taiwan Weighted rose 60.89 points or 0.47% to 12,889.76, KOSPI added 29.59 points or 1.26% to 2,381.26, Jakarta Composite inched up 0.75 points or 0.01% to 5,144.64 and Shanghai Composite was down by 14.23 points or 0.42% to 3,368.27. On the other hand, Hang Seng plunged 79.99 points or 0.33% to 24,451.63.
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