Post Session: Quick Review

Dalal Street started FY22 on a strong note, as both Sensex and Nifty ended Thursday’s trading session with notable gains. Markets made a positive start of the day, taking support with Reserve Bank data showing that India's current account deficit narrowed to $1.7 billion or 0.2 per cent of the GDP in the December quarter as against $2.6 billion or 0.4 per cent of GDP in the year-ago period. Some support also came in as the foreign portfolio investors (FPI) have pumped in more than Rs 2.75 lakh crore ($37 billion) in the Indian equity market during FY2020-2021. This is the highest ever investment by foreign investors into Indian equities in the last two decades.

Traders got some relief, after the government asked the Reserve Bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026. To control the price rise, the government in 2016 gave a mandate to the RBI to keep the retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 31, 2021. The street also took a note of report that the central government's fiscal deficit at the end of February worked out to be 76 per cent of the revised estimate, indicating that it is likely to remain within the projections made by Finance Minister Nirmala Sitharaman in Budget 2021-22.

In late morning deals, indices cut most of their gains to trade near their neutral lines, as the growth of eight core infrastructure industries declined by 4.6 percent in February 2021, the steepest contraction in the last six months which could drag the overall industrial production in the month into the negative territory. The growth rate of the eight infrastructure sectors stood at 6.4 percent in February 2020. In January this year, the segments have registered a positive growth of 0.9 per cent. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP). 
 
But, in the second half of the trading session, markets gained traction, after finance ministry said that GST collections grew to a record high of Rs 1.23 lakh crore in March 2021, crossing the Rs 1 lakh crore-mark for the sixth month straight, indicating rapid economic recovery post-pandemic. Traders remained positive with Economic Affairs Secretary Tarun Bajaj’s statement that the government will borrow Rs 7.24 lakh crore, which is 60.06 percent of the gross issuances, in the first half of 2021-22 fiscal (H1FY22) to meet resources to perk up the economy hit by the coronavirus pandemic.

On the global front, European markets were trading higher as optimism around a new U.S. government spending plan and strong factory activity data out of the euro zone eclipsed concerns about another lockdown in France.  Asian markets ended in green on Thursday, after the manufacturing sector in Japan continued to expand in March, and at a faster pace, the latest survey from Jibun Bank showed on Thursday with a seasonally adjusted manufacturing PMI score of 52.7. That's up from 51.4 in February, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Individually, there were faster increases in output and new orders, while employment levels finally stabilized.

The BSE Sensex ended at 50029.83, up by 520.68 points or 1.05% after trading in a range of 49478.53 and 50092.48. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.66%, while Small cap index was up by 2.05%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 5.41%, Basic Materials up by 2.89%, Utilities up by 2.80%, Power up by 2.77% and Telecom up by 2.02%, while FMCG down by 0.06% and Consumer Durables down by 0.05% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 4.12%, Kotak Mahindra Bank up by 2.88%, Ultratech Cement up by 2.39%, Axis Bank up by 2.30% and Sun Pharma up by 2.22%. On the flip side, Hindustan Unilever down by 1.29%, Nestle down by 0.84%, HDFC Bank down by 0.47% and TCS down by 0.37% were the top losers. (Provisional)

Meanwhile, in a big relief to food manufacturing entities, the Union Cabinet has approved the Central Sector Scheme - ‘Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)’ to support creation of global food manufacturing champions commensurate with India's natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs 10900 crore.

The objectives of the scheme are to support food manufacturing entities with stipulated minimum Sales and willing to make minimum stipulated investment for expansion of processing capacity and Branding abroad to incentivise emergence of strong Indian brands.

The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore and create employment for nearly 2.5 lakh persons by the year 2026-27.

The CNX Nifty ended at 14867.35, up by 176.65 points or 1.20% after trading in a range of 14692.45 and 14883.20. There were 43 stocks advancing against 7 stocks declining on the index. (Provisional)

The top gainers on Nifty were JSW Steel up by 8.60%, Hindalco up by 7.16%, Tata Steel up by 6.31%, Adani Ports & SEZ up by 4.82% and Indusind Bank up by 4.07%. On the flip side, Hindustan Unilever down by 1.33%, HDFC Life Insurance down by 0.75%, Nestle down by 0.48%, HDFC Bank down by 0.46% and TCS down by 0.40% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 44.17 points or 0.66% to 6,757.80, France’s CAC increased 24.87 points or 0.41% to 6,092.10 and Germany’s DAX was up by 88.98 points or 0.59% to 15,097.32.

Asian markets ended in green on Thursday cheered up with the unexpectedly strong economic data by Japan and South Korea and as US President's $2.3 trillion infrastructure spending plan. Sentiments pulled up with the hopes that vaccinations and government spending plans have raised expectations for supercharged economic growth and a possible rise in inflation, which has pushed yields higher. China's Shanghai finished higher kindled by gains in consumer and health shares. China’s factory activity in March expanded at the slowest pace in almost a year on softer overall domestic demand, but underlying economic conditions remained solid. On the Global front, stocks are advancing with the optimism over global recovery though some gains remained trimmed with the rise in covid infections and new restrictions imposed.