The domestic equity benchmarks ended near the day's high after a strong session on Wednesday. The Nifty closed above the 17,500 mark. Cabinet approval for production linked incentives (PLI) for auto sector and relief measures for telecom sector boosted sentiment. Barring the Nifty Media index, all the sectoral indices on the NSE ended in the green.

The barometer index, the S&P BSE Sensex, surged 476.11 points or 0.82% to 58,723.20. The Nifty 50 index advanced 139.45 points or 0.80% to 17,519.45. Both the indices attained record closing levels.

The Nifty hit a record high of 17,532.70 while the S&P BSE Sensex hit an all-time high of 58,777.06 in mid-afternoon trade.

NTPC (up 7.16%), HCL Technologies (up 2.86%), TCS (up 1.79%) and Infosys (up 1.49%) boosted indices.

In the broader market, the BSE Mid-Cap index rose 0.65% and the BSE Small-Cap index gained 0.86%.

The market breadth was strong. On the BSE, 2055 shares rose and 1246 shares fell. A total of 120 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 22,58,23,928 with 46,49,577 deaths. India reported 3,51,087 active cases of COVID-19 infection and 4,43,497 deaths while 3,25,22,171 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Active cases aggregated to 3,62,207, comprising 1.09% of the total infection. The ministry said the national recovery rate was recorded at 97.58%. Over 75.8 crore COVID-19 vaccine doses have been administered in the country so far, with over 60 lakh doses being given yesterday, according to the Co-WIN dashboard.

Economy:

India's merchandise exports jumped 45.76% to $33.28 billion in August 2021, led by petroleum products, gems and jewellery, engineering goods and cotton yarn. Merchandise imports rose 51.72% to $47.09 billion, as against $31.03 billion in the corresponding month of 2020, according to the commerce ministry's data released on Tuesday.

The trade deficit (merchandise) swelled to $13.81 billion, compared to $8.2 billion in August 2020. The previous high was $15.1 billion in April 2021.

Meanwhile, Ministry of Finance stated in a latest update that eleven states namely, Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Kerala, Madhya Pradesh, Manipur, Meghalaya, Nagaland, Rajasthan and Uttarakhand have achieved the target set by the Ministry of Finance for the capital expenditure in the first quarter of 2021-22.

As an incentive, these States have been granted permission by the Department of Expenditure to borrow an additional amount of Rs 15,721 crore. The additional open market borrowing permission granted is equivalent to 0.25% of their Gross State Domestic Product (GSDP). Additional financial resources thus made available will help the States in pushing their capital expenditure further. The capital expenditure has a high multiplier effect, enhances the future productive capacity of the economy, and results in a higher rate of economic growth.

The next review of capital expenditure of states will be undertaken by the Department of Expenditure in December 2021.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 6.163% as compared with 6.198% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 73.50, compared with its close of 73.68 during the previous trading session.

MCX Gold futures for 5 October 2021 settlement fell 0.40% to Rs 47,073.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.16% to 92.48.

In the commodities market, Brent crude for November 2021 settlement rose $1.07 at $74.67 a barrel. The contract rose 9 cents, or 0.12% to settle at $73.60 a barrel in the previous trading session.

Foreign Markets:

Most shares in Europe and Asia declined on Wednesday after weak Chinese economic data reignited worries that global growth is slowing.

Retail sales growth in China slumped heavily in August further, accentuating the slowdown in the Chinese economy, the latest economic data shows. Retail sales grew by a mere 2.5% in August compared with a year earlier, way down from the 8.5% increase in July. Industrial production grew by 5.3% in August from a year earlier after a 6.4% gain in July.

Meanwhile in Hong Kong, the Hang Seng index dropped 1.84%. Casino stocks listed in the city plunged amid reported fears over tighter regulations as Macao kicked off a public gaming consultation. Shares of Wynn Macau and Sands China both plummeted more than 27% each, while Galaxy Entertainment Group dropped over 17%.

Investors, especially in Europe, keenly look forward to the upcoming German federal election on 26 September 2021, with polls suggesting the race is still too close to call as voters try to decide a successor to Chancellor Angela Merkel.

The Institute of International Finance (IIF), on Tuesday, revealed that the global debt soared to a record $300 trillion in the second quarter. However, debt-to-GDP declined for the first time since the onset of the COVID-19 pandemic as growth recovered.

U.S. stock indexes closed lower Tuesday, giving up gains earlier in the session after a better-than-feared inflation reading and falling back into their September doldrums.

US consumer prices rose by 0.3% in August, the smallest increase in seven months and a hopeful sign that inflation pressures may be cooling. The August gain fell from a 0.5% increase in July and a 0.9% surge in June, the Labor Department reported on Tuesday. It was the smallest increase since a similar 0.3% rise in January.

Auto Production Linked Incentive (PLI):

The Nifty Auto index rose 0.86% to 10,297. The index has added 1.95% in four sessions.

Tube Investments of India (up 3.58%), Ashok Leyland (up 2.92%), Tata Motors (up 1.76%), Bharat Forge (up 1.28%), Balkrishna Industries (up 1.14%), Bajaj Auto (up 1.02%), M&M (up 0.77%), Hero Motocorp (up 0.71%), Amara Raja Batteries (up 0.65%), Eicher Motors (up 0.63%), Maruti Suzuki India (up 0.27%), Bosch (up 0.14%) and Exide Industries (up 0.11%) advanced.

The Union Cabinet on Wednesday approved production linked incentive (PLI) schemes for auto industry, auto component industry, drone industry to enhance India's manufacturing capabilities.

The government announced provision of Rs 26,058 crore for PLI schemes for auto, auto component industry and drone industry. The provision comprises Rs 120 crore for drone industry.

The scheme will incentivize emergence of advanced automotive technologies global supply chain in India. It will bring fresh investments of over 42500 crore in five years and an incremental production of over 2.3 lakh crore.

PLI scheme for drones will bring fresh investments of over 5,000 crore in three years and incremental production of over 1,500 crore.

The scheme will enhance India's manufacturing capabilities, enable India to leapfrog to environmentally cleaner electric vehicles and hydrogen fuel cell vehicles. It will give a big boost to manufacture of electric vehicles and create additional employment of over 7.6 lakh people, Union Minister Anurag Thakur said on Wednesday.

Telecom Relief Measures:

Bharti Airtel (up 4.53%) and Vodafone Idea (up 2.76%) advanced. Reliance Communications and Tata Teleservices (Maharashtra) jumped 5% each.

The Cabinet on Wednesday approved 9 structural reforms and 5 process reforms for the telecom sector. Adjusted gross revenue (AGR) definition has been rationalised to exclude non-telecom revenues prospectively and 4-year moratorium on telecom dues was approved as well.

To encourage investment, 100% foreign direct investment (FDI) under automatic route is permitted in telecom sector. Spectrum user charges have been rationalised. There will be now an annual compounding of rates. Spectrum can now be surrendered, spectrum can also be shared.

Stocks in Spotlight:

RBL Bank rose 2.28%. The bank has started issuing credit cards to its new customers on Visa's payment network. The launch follows the successful completion of technology integration with the new platform following the agreement between RBL Bank and Visa on 14 July 2021. The bank has a 5% market share in credit cards in India.

In July 2021, the Reserve Bank of India (RBI) imposed restrictions yesterday on Mastercard Asia/Pacific (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network. Back then, RBL Bank issued credit cards on the Mastercard network only.

Glenmark Pharmaceuticals advanced 0.76%. The drug maker said that the findings of the post marketing surveillance study on Favipiravir reinforce drug's safety & efficacy. Results show no new safety signals or concerns till date and side effects reported are in-line with known safety profile of the drug.

eClerx Services hit an upper circuit of 5% at 2353.35 after the company said its board will meet on Friday, 17 September 2021, to consider the final times and conditions of buyback of equity shares.

On 13 August, the company said that its board approved share buyback plan worth upto Rs 303 crore. The board approved the proposal to buyback upto 9,46,875 equity shares of the company at a price not exceeding Rs 3,200 each, aggregating to Rs 303 crore.

Shree Cement added 0.28%. The cement maker will invest Rs 4,750 crore on three projects, including Rs 3,500 crore to set up an integrated cement plant at Nawalgarh Tehsil of Rajasthan. The proposed plant will have a clinker capacity of 3.8 million tonnes per annum (MTPA) and cement capacity of upto 3.5 MTPA. The plant will be ready by the quarter ending March 2024. The financing will be done through a mix of internal accruals and debt.

Further, the board approved to invest Rs 500 crore to set up solar power plants at its cement units at various locations and Rs 750 crore to set up a clinker grinding unit in the Purulia district of West Bengal by its wholly-owned subsidiary Shree Cement East. This will be financed mainly by way of equity contribution from Shree Cement.

Ramkrishna Forgings advanced 2.63%. The company bagged an export order worth Rs 25 crore (i.e. $3.5 million per annum) from a North American customer in Oil & Gas segment.

KNR Constructions added 0.40%. The company received a letter of acceptance (LoA) for the development of six lane Chittor-Thatchur Highway on Hybrid Annuity Mode in the state of Andhra Pradesh and Tamil Nadu. The bid project cost stood at Rs 1,041.50 crore and is expected to be completed within a period of 24 months (i.e. 2 years) (with an operation period of 15 years from commercial operation date (COD)).

Royal Orchid Hotels gained 3.04%. The hospitality chain announced the opening of five new properties at various destination across India. The company has opened two hotels in Amritsar, one in Sampbalpur and one in Somnath. The group also opened one leisure property in a tourist-intensive and high-demand area of Kabini in Karnataka.

Sansera Engineering IPO:

Sansera Engineering IPO opened for subscription from Tuesday (14 September) and it will close on Thursday (16 September). The company is offering 1,72,44,328 shares (including Anchor portion of 51,35,162 equity shares) in the price band of Rs 734 to Rs 744 per share.

As on 17:00 IST, the IPO received bids for 1,23,26,760 shares as against 1,21,09,166 shares on offer. The issue was subscribed 1.02 times so far.

The IPO is a complete offer for sale by existing shareholders and the company will not directly receive any proceeds from the offer. Sansera Engineering is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors.

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