The Nifty and the Sensex are witnessing a modest correction after opening the day on a new high.
Join us as we follow the top business news through the day.
Indian shares slip as investors lock in gains from IT, drugs
Stocks are witnessing a slight correction after opening with significant gains this morning.
Reuters reports: "Indian shares slipped from a record high on Wednesday as investors booked profits in IT services and drug stocks, countering a brighter mood globally from COVID-19 vaccine progress and the U.S. presidential transition.
India's NSE Nifty 50 index had hit an all-time high in early trading after surpassing the 13,000 level for the first time ever on Tuesday, powered by upbeat vaccine trial data and strong inflows from foreign money managers.
The Nifty 50 was down 0.45% at 12,998.05 by 0540 GMT, while the S&P BSE Sensex was 0.46% lower at 44,320.02.
The Nifty IT and Nifty pharmaceutical indexes were each down more than 1.2%. IT services firms Infosys and Tata Consultancy Services were among the top drags on the Nifty 50.
The IT services and drugs sectors have been early winners during the COVID-19 pandemic and have each clocked gains of 40% or more since the start of 2020.
“We are seeing profit-taking. The market is definitely over-bought. There's some shifting of portfolios,” said Neeraj Dewan, director at Quantum Securities in New Delhi.
“Other sectors that can benefit with the economy opening up in the next three or six months are expected to rise,” he said, adding infrastructure stocks could see more investor interest.
In a bright spot, the Nifty PSU banking index that tracks India's state-owned lenders advanced 1.8%. Punjab National Bank rose 2.8%, while Bank of Baroda jumped nearly 4%.
Meanwhile, world shares hit a record high following an advance on Wall Street that saw the Dow Jones benchmark crack 30,000 on U.S. president-elect Joe Biden's transition to the White House and increasing confidence a COVID-19 vaccine would be ready soon."
Stocks are on fire this November
Rupee rises 6 paise to 73.95 against US dollar in early trade
The positive sentiment in stocks boosts the rupee.
PTI reports: "The rupee appreciated 6 paise to 73.95 against the US dollar in the opening session on Wednesday on sustained foreign fund inflows and positive development on the coronavirus vaccine front.
Traders said strong domestic equities, sustained foreign fund inflows and weak American currency also supported the rupee.
At the interbank forex market, the domestic unit opened at 73.98 against the US dollar, and gained ground to touch 73.95 against the greenback, registering a rise of 6 paise over its previous close.
On Tuesday, the rupee appreciated by 10 paise to close at a three-week high of 74.01 against the US dollar.
Traders said risk appetite increased on news that US President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen as Treasury Secretary.
“The news of Janet Yellen being president-elect Biden’s choice for the post of treasury secretary further buoyed risk sentiment. Appointment of Yellen as treasury secretary is believed to result in greater cohesion between monetary and fiscal policies,” said Abhishek Goenka, Founder and CEO, IFA Global.
Goenka further said today is the November exchange traded currency derivatives expiry. There could be some selling on account of this.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.16 per cent to 92.08.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 4,563.18 crore on a net basis on Tuesday, according to exchange data.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 95.32 points higher at 44,618.34, and the broader NSE Nifty rose 35.20 points to 13,090.35.
Brent crude futures, the global oil benchmark, rose 1.27 per cent to USD 48.47 per barrel."
Government orders ‘priority’ for local tenders
The government has tightened its procurement norms to make it tougher for Ministries to pursue global tenders for contracts worth up to ₹200 crore.
Under the Atma Nirbhar Bharat Abhiyan announced in May, the government had barred departments from issuing global tenders for contracts worth ₹200 crore or less.
The General Financial Rules were amended to disallow global tender enquiries in such procurement of goods and services, with an eye on boosting the prospects of domestic micro, small and medium enterprises. Any Ministry seeking an exemption to the norm, in order to call for a global tender enquiry, is required to seek the Cabinet Secretariat’s prior nod.
So far, Ministries’ requests could be considered if they gave valid justification for the need to issue a global tender and the lack of alternatives within the country.
Sensex rallies over 300 points to scale fresh peak in opening session; Nifty tops 13,100
Yet another good start to the day for stocks.
PTI reports: "Equity benchmark Sensex rallied over 300 points in opening trade on Wednesday, tracking gains in index-heavyweights HDFC twins, Reliance Industries and ICICI Bank amid largely positive cues from global markets and persistent foreign fund inflows.
After touching a lifetime high of 44,825.37 in the opening session, the 30-share BSE index was trading 242.76 points or 0.55 per cent higher at 44,765.78.
Similarly, the broader NSE Nifty touched a record intra-day peak of 13,145.85, before trading 76.25 points or 0.58 per cent up at 13,131.40.
ONGC was the top gainer in the Sensex pack, surging around 5 per cent, followed by SBI, ICICI Bank, Bajaj Auto, HDFC Bank, Reliance Industries and Axis Bank.
On the other hand, Tech Mahindra, Asian Paints, Bajaj Finance and Infosys were among the laggards.
In the previous session, Sensex ended 445.87 points or 1.01 per cent higher at a record high of 44,523.02, and Nifty rose 128.70 points or 1 per cent to close above the 13,000-mark for the first time at 13,055.15.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 4,563.18 crore on a net basis on Tuesday, according to provisional exchange data.
Domestic equities continued to look good at the moment on favourable global cues, said Binod Modi, Head-Strategy at Reliance Securities.
“Strong FPIs flow emerged as the main contributor to domestic markets’ sharp rally in November. Monthly futures and options (F&O) expiry is expected to create some amount of volatility hereon,” he added.
He further noted that US equities closed sharply higher as investors continued to cheer the progress on COVID-19 vaccines along with ease of political uncertainty after Trump’s administration indicated a smooth transition for President-elect Joe Biden to the White House.
Elsewhere in Asia, bourses in Tokyo, Hong Kong and Seoul were trading with gains in mid-session deals, while Shanghai was in the red.
Meanwhile, Brent crude futures, the global oil benchmark, was trading 1.26 per cent higher at USD 48.38 per barrel."
Pent-up demand spurring activity, may not sustain: ICRA
The pick up in economic activity in October was the result of pent-up demand and may not sustain going ahead, ratings agency Icra said on Tuesday.
Multiple fast-paced indicators, including GST collections, had been showing a sharp recovery since October, which has also led many analysts to revise their overall GDP forecasts for the fiscal.
“We caution that the spikes in production seen in the various sectors in October 2020, are an exaggeration of the true recovery on the ground, as they have been driven by a large component of pent-up demand that may not sustain after the festive period is over,” the agency’s principal economist Aditi Nayar said.
The factors that need to be watched are the pace of government spending in the second half of the fiscal, after the unexpected contraction recorded in the September quarter, she added.
