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EQUITY
Local indices settle with marginal gains
Oct-23-2020

In a volatile trade, Indian equity benchmarks traded in green terrain throughout the session and ended with marginal gains on Friday, driven by gains in Auto, Consumer Discretionary, Consumer Durables and Power stocks amid positive cues from global markets. Traders found some solace with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy might end up with a lower contraction in the current fiscal than projected by various organisations and also stressed that the next stimulus should focus on short-gestation infrastructure projects. Some optimism also came with Niti Aayog Vice Chairman Rajiv Kumar expressed confidence that money and resources will be in place for a viable and effective vaccination system to fight COVID-19, even as he said it is quite premature to talk about the cost for getting the vaccination. He also expressed hope that the corporate world will also rise up to the occasion and make the vaccination part of their CSR activity.

However, gains remain capped as some cautiousness came with a private report stated that with no signs of reprieve from the pandemic in near future and economy yet to show major indications of a revival, India's consumer confidence has declined by 0.3 percentage points in October 2020. Some concern also came as UN expert said that between 150 million and 175 million more people will fall into extreme poverty due to the COVID-19 pandemic. Market participants also took a note of Niti Aayog CEO Amitabh Kant’s statement that if India has to grow, then it will have to look at global markets and become a key exporting nation. He also said no country has become rich without penetrating the US market and India must get into it in a big way.

On the global front, Asian markets ended mostly higher on Friday, despite uncertainty over a U.S. stimulus deal and worries about a continued surge in coronavirus cases in several parts of Europe and the U.S. Meanwhile, the latest survey from Jibun Bank revealed the manufacturing sector in Japan continued to contract in October, albeit at a slower pace, with a manufacturing PMI score of 48.0, up from 47.7 in September. The report also showed that the services index fell to 46.6 from 46.9 and the composite index rose to 46.7 from 46.6. European markets were trading higher, as Brexit optimism and positive earnings updates from the likes of Daimler and Barclays helped investors shrug off renewed concerns about the economic impact of surging Covid-19 cases. Back home, on the sectoral front, banking stocks were in focus as bank credit grew 5.66% year-on-year to Rs 103.44 lakh crore, while deposits increased 10.55% to Rs 143.02 lakh crore in the fortnight ended October 9. Stocks related to real estate sector were in watch with a survey stating that the sentiment in the real estate industry remained pessimistic during July-September due to the COVID-19 pandemic, but the outlook for the next six months has turned optimistic with signs of revival in demand.

Finally, the BSE Sensex rose 127.01 points or 0.31% to 40,685.50, while the CNX Nifty was up by 33.90 points or 0.28% to 11,930.35.

The BSE Sensex touched high and low of 40,811.12 and 40,590.90, respectively and there 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Auto up by 2.76%, Consumer Discretionary up by 1.85%, Consumer Durables up by 1.30%, Power up by 1.20% and Utilities up by 1.10%, while Realty down by 0.94%, Basic Materials down by 0.27%, IT down by 0.24%, Healthcare down by 0.17% and TECK down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.44%, Mahindra & Mahindra up by 3.31%, Tata Steel up by 3.27%, Power Grid up by 3.03% and Bajaj Auto up by 2.46%. On the flip side, Ultratech Cement down by 2.36%, HCL Technologies down by 1.71%, Hindustan Unilever down by 1.62%, Kotak Mahindra Bank down by 0.73% and Infosys down by 0.72% were the top losers.

Meanwhile, Niti Aayog CEO Amitabh Kant has said that if India has to grow, then it will have to look at global markets and become a key exporting nation. He also said no country has become rich without penetrating the US market and India must get into it in a big way. He said ‘we must understand globalisation has lifted vast segments of the population in the last few decades.

Kant further said that India has carried out some radical reforms recently in coal, agriculture, MSME and mining sectors. He pointed out that every crisis is an opportunity to use technology to leapfrog and India has demonstrated its strength. He said ‘we have used technology in a very big way to make India efficient’.
Besides, after contracting for six straight months, India’s merchandise exports grew by 5.99 percent to $27.58 billion in September 2020 as compared to same period of last year, on account of growth in shipments of drugs and pharmaceuticals and readymade garments.

The CNX Nifty traded in a range of 11,974.55 and 11,908.75 and there were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.26%, Mahindra & Mahindra up by 3.30%, Tata Steel up by 3.27%, Power Grid up by 2.91% and Bajaj Auto up by 2.79%. On the flip side, Ultratech Cement down by 2.44%, HCL Technologies down by 1.59%, Hindustan Unilever down by 1.56%, GAIL India down by 1.35% and Hindalco Industries down by 1.30% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 94.50 points or 1.63% to 5,880.15, France’s CAC increased 68.39 points or 1.41% to 4,919.77 and Germany’s DAX increased 137.66 points or 1.1% to 12,680.72.

Asian markets ended mostly higher on Friday. Japanese shares closed higher by tracking gains in Wall Street overnight with prospect of more fiscal stimulus to support a pandemic damaged US economy, while investors are keeping an eye on the US presidential election. US President Donald Trump and Democratic challenger Joe Biden offered sharply contrasting views on the still-raging corona virus pandemic at the final presidential debate, ahead of the November 3 election. South Korean shares ended higher on optimism for improved corporate earnings in the third quarter. However, concerns about a continued surge in corona virus cases in several parts of Europe and the United States, capped some gains.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,278.00

-34.50

-1.04

Hang Seng

24,930.62

144.49

0.58

Jakarta Composite

5,112.19

20.37

0.40

KLSE Composite

1,494.64

-4.16

-0.28

Nikkei 225

23,516.59

42.32

0.18

Straits Times

2,537.39

8.98

0.36

KOSPI Composite

2,360.81

5.76

0.24

Taiwan Weighted

12,898.82

-18.21

-0.14
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