Indian equity benchmarks trimmed some of their initial gains but managed to trade in green in morning deals, led by gains in IT, TECK and Capital Goods stocks. Sentiments remained positive with Crisil Ratings’ report stating that the private industrial capital expenditure (capex) appears to be getting into a whole new cycle after the COVID-19 pandemic hiccup, driven by conducive government support through policy measures such as the Production-Linked Incentive (PLI) scheme and reduced tax rates and accommodative monetary policies and lower interest rates. Meanwhile, observing that a continued coordinated policy response to fight COVID-19 including through vaccines is critical to overcome the ongoing health crisis, a top IMF official has said that addressing the long-standing reform priorities and improving education outcomes will be key to help minimise adverse medium-term impacts from the pandemic and further boost long-term growth in India. On the global front, Asian markets were trading mostly in green supported by a tech-driven Wall Street rally, and a rebound in Chinese markets a day after weak data heightened investor concerns about the world's second-largest economy.
The BSE Sensex is currently trading at 61903.12, up by 137.53 points or 0.22% after trading in a range of 61594.29 and 62201.72. There were 12 stocks advancing against 18 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index fell 0.43%, while Small cap index was down by 0.42%.
The top gaining sectoral indices on the BSE were IT up by 1.27%, TECK up by 0.94%, Capital Goods up by 0.84%, Energy up by 0.59% and Power up by 0.03%, while Realty down by 2.04%, Consumer Durables down by 1.47%, Basic Materials down by 1.08%, Metal down by 0.92% and Healthcare down by 0.67% were the top losing indices on BSE.
The top gainers on the Sensex were Larsen & Toubro up by 2.51%, Hindustan Unilever up by 2.00%, HCL Technologies up by 1.78%, Tech Mahindra up by 1.74% and Reliance Industries up by 1.12%. On the flip side, ITC down by 3.64%, Ultratech Cement down by 1.97%, Titan Company down by 1.39%, Dr. Reddy's Lab down by 0.93% and Power Grid Corporation down by 0.91% were the top losers.
Meanwhile, Crisil Ratings in its latest report has said that the private industrial capital expenditure (capex) appears to be getting into a whole new cycle after the COVID-19 pandemic hiccup, driven by conducive government support through policy measures such as the Production-Linked Incentive (PLI) scheme and reduced tax rates and accommodative monetary policies and lower interest rates. It noted that other factors contributing to the increased industrial capex include Commodities upcycle, rising merchandise exports, supply chain diversification, healthy balance sheets and global liquidity.
According to the report, the external environment for the capex cycle in the current decade will more likely resemble that seen in the first decade of the century (2000’s) in terms of global liquidity, monetary policies, liquidity, and healthy balance sheets. It said the PLI scheme has given a much-needed booster dose to flailing capex. Without it, capex would have likely taken nearly two years to touch pre-pandemic levels. It added that actualisation of the scheme will result in aggregate industrial capex rising 1.3 times through fiscals 2022-2024 in comparison to fiscals 2018-2020.
The report further said the new capex cycle will be relatively distinct compared with earlier cycles on several counts. It pointed out that asset-heavy sectors such as metals, cement, and mining will see more localised investments, led by large players at their existing sites (brownfield capex). It also stated that in comparison, asset-light ones such as pharma, telecom equipment, mobile, and electronics will see more greenfield capex, led by PLI as well as supply chain diversification. It added that the pandemic-induced focus on digital and automation will spur growth.
The CNX Nifty is currently trading at 18507.85, up by 30.80 points or 0.17% after trading in a range of 18400.25 and 18604.45. There were 19 stocks advancing against 31 stocks declining on the index.
The top gainers on Nifty were Larsen & Toubro up by 2.94%, Hindustan Unilever up by 1.96%, Wipro up by 1.78%, HCL Technologies up by 1.78% and Tech Mahindra up by 1.62%. On the flip side, ITC down by 3.71%, Eicher Motors down by 2.35%, Ultratech Cement down by 2.02%, Divi's Lab down by 1.55% and JSW Steel down by 1.51% were the top losers.
Asian markets were trading mostly in green; KOSPI rose 20.25 points or 0.67% to 3,026.93, Taiwan Weighted strengthened 186.75 points or 1.12% to 16,892.21, Shanghai Composite gained 25.09 points or 0.7% to 3,593.23, Straits Times advanced 15.44 points or 0.49% to 3,189.26, Nikkei 225 surged 174.80 points or 0.6% to 29,200.26 and Hang Seng increased 298.77 points or 1.18% to 25,708.52. On the flip side, Jakarta Composite lost 30.09 points or 0.45% to 6,628.68.
