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Indian equities end in green for fourth consecutive day
Oct-21-2020

Indian equity benchmarks managed to close higher after witnessing wild swings during the session on Wednesday, owing to buying interest in Realty, Telecom and Metal shares. The benchmarks staged a gap up opening, as traders took encouragement with the Commerce and Industry Ministry’s statement that foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year. During April-August last year, India had received FDI worth $23.35 billion. Additional support came with Ratings agency ICRA’s report that India's economic recovery has ‘broadened and strengthened’ in September 2020 from the pandemic-induced lows seen in April 2020. It said that as many as nine of the tracked 15 non-financial high frequency indicators recorded growth in September 2020, while five posted a narrower year-on-year (YoY) contraction in that month.

However, domestic bourses wiped out entire gains in late afternoon deals, as RBI analysis showing that aggregate sales of private sector manufacturing companies recorded a sharp contraction of 41.1 per cent year-on-year in the first quarter of 2020-21, reflecting the impact of the pandemic induced lockdown. Some concern also came with reports that even as brands are betting big on Diwali to light up their sales, a survey has shown below-average spending propensity among urban Indians this festive season with nearly 50 per cent respondents agreeing of being careful about their finances. But, the benchmarks managed to bounce from intraday lows in the last 30 minutes of trade, taking support from the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report has showed that India created 1005852 new jobs in the month of August 2020 as against revised figure of 748784 in July 2020.

On the global front, Asian markets ended mixed on Wednesday, after the White House and Democratic Party negotiators said they are willing to continue their discussions over U.S. stimulus measures. Sentiment was also bolstered after a Reuters report said that AstraZeneca Plc's Covid-19 vaccine trial in the United States is expected to resume as early as this week. European markets were trading lower, with concerns about tightening coronavirus restrictions in parts of Europe and the U.S. stimulus impasse keeping investors worried. Back home, on the sectoral front, agriculture industry stocks were in focus as Ministry of Consumer Affairs, Food and Public Distribution claimed that the Paddy procurement in current season has exceeded by 22.43 per cent as compared to the previous season and the Government continues to procure Kharif 2020-21 crops on MSP from the farmers. Besides, automotive industry’s stocks were buzzing as the Automotive Component Manufacturers Association of India (ACMA) said the uptick in the passenger vehicles segment, coupled with car parc of second-hand vehicles, on account of increased use of personal cars is expected to lead to a rise in aftermarket demand.

Finally, the BSE Sensex rose 162.94 points or 0.40% to 40,707.31, while the CNX Nifty was up by 40.85 points or 0.34% to 11,937.65.

The BSE Sensex touched high and low of 40,976.02 and 40,150.48, respectively and there 20 stocks advancing against 10 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.23%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Realty up by 4.39%, Telecom up by 2.52%, Metal up by 2.26%, Utilities up by 1.76% and Power up by 1.55%, while Energy down by 1.01%, FMCG down by 0.89%, IT down by 0.44%, Auto down by 0.23% and Healthcare down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 4.13%, Bharti Airtel up by 3.51%, Tata Steel up by 3.04%, NTPC up by 2.11% and HDFC Bank up by 1.87%. On the flip side, TCS down by 2.30%, Reliance Industries down by 1.50%, Nestle down by 1.46%, HCL Technologies down by 1.06% and Bajaj Finance down by 0.88% were the top losers.

Meanwhile, the Commerce and Industry Ministry has said that foreign direct investment (FDI) in India has increased by 16 percent to $27.1 billion during April-August period of FY21 as compared to $23.35 billion received in same period last year. It noted that the total FDI, which includes reinvested earnings, grew by 13 percent to $35.73 billion. Besides, it said total FDI inflow grew by 55 percent, i.e., from $231.37 billion in 2008-14 to $358.29 billion in 2014-20.

The Ministry stated that FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor friendly FDI policy. It pointed out that the intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. 

It further said that the steps taken in this direction during the last six years have borne fruit as is evident from the ever increasing volumes of FDI inflows being received into the country. It also said measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. It added that the following trends in India's FDI are an endorsement of its status as a preferred investment destination amongst global investors.

The CNX Nifty traded in a range of 12,018.65 and 11,775.75 and there were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 4.52%, Bharti Airtel up by 3.58%, Tata Steel up by 2.88%, Hindalco up by 2.74% and GAIL India up by 2.51%. On the flip side, Britannia Industries down by 4.26%, TCS down by 2.23%, SBI Life Insurance down by 1.96%, Hero MotoCorp down by 1.76% and Nestle India down by 1.70% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 57.56 points or 0.98% to 5,831.66, France’s CAC fell 37.49 points or 0.76% to 4,891.79 and Germany’s DAX was down by 74.59 points or 0.59% to 12,662.36.

Asian markets ended mixed on Wednesday on optimism that US lawmakers could reach an agreement on a stimulus package before US election day. The market sentiments improved on reports that Moderna's CEO Stephane Bancel expects interim results from the firm's Covid-19 vaccine trial in November and that the US government could give an emergency use nod in December. Further, AstraZeneca Plc's Covid-19 vaccine trial in the United States is expected to resume as early as this week. Chinese shares ended marginally lower despite growing optimism about China’s economic recovery from virus outbreak, while the Chinese yuan surged to its strongest level against the dollar in more than two years.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,325.02

-3.08

-0.09

Hang Seng

24,754.42

184.88

0.75

Jakarta Composite

5,096.45

-3.39

-0.07

KLSE Composite

1,492.40

-18.57

-1.23

Nikkei 225

23,639.46

72.42

0.31

Straits Times

2,525.61

-3.03

-0.12

KOSPI Composite

2,370.86

12.45

0.53

Taiwan Weighted

12,877.25

14.88

0.12
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