Share markets in India are trading higher in today's volatile trade after the Supreme Court ruled that telecom companies will be allowed 10 years for staggered payment of AGR dues.
The apex court said the 10-year payment timeline will begin from April 1, 2021.
The BSE Sensex is trading up by 283 points, at 38,900 levels.
Meanwhile, the NSE Nifty is trading up by 76 points. The top gainers in NSE today include Bharti Airtel and JSW Steel.
The BSE Mid Cap index is trading down by 0.3%. The BSE Small Cap index is trading down by 0.6%.
On the sectoral front, gains are largely seen in the telecom sector.
Realty stocks, on the other hand, are witnessing selling pressure.
The rupee is trading at 72.78 against the US$.
Gold prices are currently trading up by 0.2% at Rs 51,810.
In news from the economic space, India's economy contracted by 23.9% in the April-June period, its worst performance since the quarterly measurement began in 1996, and probably the first contraction since 1980.
The lockdown and suspension in economic activity due to COVID-19 was so massive that among a mix of advanced and emerging economies, India's GDP contraction was the worst.
The damage visible across all areas of the economy was countered by two indicators. In the period of unprecedented economic contraction in manufacturing and services, the gross value added (GVA) in agriculture grew by 3.4% compared to the same period of the previous year.
On the demand side, while consumer spending and investments declined massively, government spending grew by 16%, data released by the National Statistical Office showed.
State and central governments tried to balance the collapsing economy by spending more, and as a result, government expenditure is seen to have grown strongly by 16% in Q1.
Consumer spending - the main driver of the economy, dropped 31.2% year-on-year in April-June compared to a 2.6% fall in the previous quarter, data showed, while capital investments were down 47.9% compared to a 2.1% rise in the previous quarter.
Among economic sectors, value-added by industry saw a contraction of 40%, on expected lines. The services sector which includes construction, trade, banking and financials, real estate, and restaurants, faced a 27% decline in GVA over the previous year.
Nominal GDP growth, too, contracted by 20.9% in the June quarter.
Prime Minister Narendra Modi announced a US$ 266 billion stimulus package in May, including credit guarantees on bank loans and free food grains for poor people, but consumer demand and manufacturing have yet to recover.
It will be interesting to see what more steps the government takes to boost the economy.
Moving on to news from the automobile sector, Escorts is among the top buzzing stocks today.
Shares of the company gained 5% intraday today after it reported a strong 80.1% year-on-year (YoY) jump in tractor sales in the month of August 2020.
The company's Agri Machinery Segment (EAM) sold 7,268 tractors, its highest-ever August sales. It had sold 4,035 tractors in August 2019. On a month-on-month (MoM) basis, the volume was up 36.6%.
The company said that market sentiment continues to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well, and a good supply of retail finance.
"We are currently operating close to peak capacity now. In August 2020 we could build some inventory both at dealer and depots, which since the last few months was at very low levels," the company added.
Escorts reported 79.4% YoY growth in domestic tractor sales in August 2020 at 6,750 tractors against 3,763 tractors in August 2019.
The export tractor sales in August 2020 were up 90.4% YoY at 518 tractors against 272 tractors sold in August 2019.
The Escorts share price is presently trading up by 0.6%.
In other news, aided by a quick recovery in demand for entry-level cars, hatchbacks, and utility vehicles, Maruti Suzuki India on Tuesday reported a 21.7% YoY growth in domestic wholesales for August to 1,15,325 units.
The country's largest passenger vehicle manufacturer had sold 94,728 units in the year-ago period.
Factory dispatches also improved from July, when the company had sold 100,000 units while sales in June numbered 51,274 units. Maruti resumed production at its Manesar plant from May 12, with dispatches at 13,865 units for that month.
Hatchback sales grew 26.8% YoY to 81,665 units in August, while those of utility vehicles rose 13.5% to 21,030 units.
Exports, however, fell 15.3% to 7,930 units during August.
Maruti Suzuki's share price is presently trading up by 1.3%.
Speaking of the automobile sector, note that the sector has rebounded sharply from its March lows.
Have a look at the chart below:
Healthcare sector is at the top, followed by the automobile sector.
As per Apurva Sheth, the auto index entered the greed phase in September 2019 and will stay there until December 2021. This means there is still a lot of fuel left for auto stocks.
How automobile stocks perform in the coming months remains to be seen. Stay tuned for more updates from this space.
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