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Markets end higher; Nifty reclaims 11,850 level
Oct-27-2020

Reversing previous session’s losses, Indian equity benchmarks ended higher on Tuesday, on account of broad based buying in blue chip counters despite negative cues from global markets. After making slightly positive start, key gauges slipped into red, as exporters expressed concerns over rising freight charges and shortage of containers as it would impact the country's outbound shipments, and sought Commerce Ministry's intervention in the matter. But, markets soon recovered and traded higher with marginal gains, taking support from a report that it could be a healthy sign of economic recovery, goods and services tax (GST) collections recorded in the month of October are likely to cross Rs 1 lakh crore for the first time this fiscal. Some support also came in with British drug maker AstraZeneca Plc stating that the Covid-19 vaccine being developed by the University of Oxford produced an immune response in both elderly and young people and adverse reactions were lower among the elderly.

Markets extended gains in second half of session to end near day’s high, as traders took encouragement, as Reserve Bank asked all lending institutions, including non-banking financial companies, to implement the waiver of interest on interest for loans up to Rs 2 crore for the six months moratorium period beginning March 1, 2020. On October 23, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. Some support also came with rating agency CRISIL stated that over 40% of banking system credit and 75% of borrowers are likely to benefit from interest-on-interest concession granted by the federal government. Further, hopes of higher inflows after MSCI said it will implement the new regime on foreign ownership limits in the MSCI Global Indexes containing Indian securities in the November 2020 Semi Annual Index Review, also boosted investor sentiment.

On the global front, Asian markets were trading mostly in red, while European markets were trading mostly in red as record daily jumps in coronavirus infections in the United States, Russia and France coupled with fading hopes for U.S. stimulus added to a gloomy economic outlook. Back home,metal stocks were in focus as according to the World Steel Association (worldsteel) India's crude steel production fell by 2.9 percent to 8.520 million tonnes (MT) in September 2020. Auto component stocks were in watch with a private report that sales of automotive components will be dented this fiscal as demand for automobiles plunges to a decadal low after the Covid-19 pandemic acted as a brake on demand, and lockdowns caused supply-chain disruptions and labour shortages. 

Finally, the BSE Sensex rose 376.60 points or 0.94% to 40,522.10, while the CNX Nifty was up by 121.65 points or 1.03% to 11,889.40.

The BSE Sensex touched high and low of 40,555.60 and 39,978.39, 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 1.65%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were Bankex up by 3.53%, Power up by 2.06%, Capital Goods up by 2.00%, Consumer Discretionary up by 1.70% and Healthcare up by 1.53%, while IT down by 1.46%, TECK down by 1.24%, Realty down by 0.65%, Metal down by 0.46% and Telecom down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 12.17%, Nestle up by 6.01%, Asian Paints up by 5.64%, Bajaj Finance up by 4.89% and NTPC up by 4.13%. On the flip side, TCS down by 2.09%, ONGC down by 1.91%, Infosys down by 1.79%, HDFC down by 1.66% and SBI down by 1.09% were the top losers.

Meanwhile, exporters have expressed concerns over rising freight charges and shortage of containers as it would impact the country's outbound shipments, and sought Commerce Ministry's intervention in the matter. The other issues raised by exporters were about Merchandise Exports from India Scheme (MEIS) funds and faceless assessment by customs authorities.

Federation of Indian Export Organisations (FIEO) President S K Saraf has said that freight charges have increased significantly by about 30-50 percent depending upon the destinations. He said protests by farmers in states like Punjab have impacted movement of containers which are used to ship goods. He said ‘we raised these issues in the meeting. These are big challenges for exporters’. He added that about 10,000 containers are being held up and it has created a mismatch for export and import purposes.

Besides, Indian Oilseeds and Produce Export Promotion Council (IOPEPC) Chairman Khushwant Jain said agri products should be included in Remission of Duties or Taxes on Export Product (RoDTEP). During the April-September 2020 period, India's exports declined 16.66 percent to $221.86 billion, while imports fell 35.43 percent to $204.12 billion over the same period last year. 

The CNX Nifty traded in a range of 11,899.05 and 11,723.00 and there were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 11.70%, Nestle up by 5.97%, Asian Paints up by 5.69%, Shree Cement up by 5.26% and Bajaj Finance up by 4.38%. On the flip side, HDFC down by 2.10%, TCS down by 1.99%, ONGC down by 1.83%, Infosys down by 1.61% and Wipro down by 1.46% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 47.07 points or 0.98% to 4,769.05 and Germany’s DAX decreased 47.55 points or 0.39% to 12,129.63, while UK’s FTSE 100 increased 3.92 points or 0.07% to 5,795.93.

Asian markets ended mostly lower on Tuesday as concerns over resurgence in corona virus infections worldwide with anxiety ahead of the US presidential election weighed investors' sentiment. Further, fading expectations for US stimulus package too added pressure on market sentiment. Japanese shares ended almost flat as the market got some support from upbeat earnings reports. Chinese shares ended higher as investors awaited the outcome of a key policy meeting of ruling Communist Party this week to formulate economic and social policy goals for the next five years.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,254.32
3.20
0.10

Hang Seng

24,787.19
-131.59
-0.53

Jakarta Composite

5,128.23
-15.82
-0.31

KLSE Composite

1,500.35

5.74

0.38

Nikkei 225

23,485.80
-8.54
-0.04

Straits Times

2,512.87
-10.44
-0.41

KOSPI Composite

2,330.84
-13.07
-0.56

Taiwan Weighted

12,875.01
-34.02
-0.26
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