Indian equity benchmarks continued to trade in green terrain in morning deals, tracking gains in Asian peers. Broad-based buying was seen in major key sectors lifting the sentiment further with metals, energy and IT indices leading. Sentiments remained positive as the Centre for Monitoring Indian Economy (CMIE) in its report stated that the gradual unlocking process across India is likely to restore about two-thirds of the 25 million non-farm jobs lost following the lockdown in May. That would be 17 million out of the 25 million non-farm jobs lost during the month. Traders also found some solace with credit rating agency Icra Ratings’ report that the country's gross domestic product (GDP) will grow at 8.5 per cent in FY2021-22, with decline in number of fresh COVID-19 cases and easing of restrictions. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. Meanwhile, the Reserve Bank of India (RBI) has said that it would be buying bonds maturing between 2026 and 2035 in its third tranche of the G-sec Acquisition Programme (G-SAP). The total size of the G-SAP programme would be Rs 40,000 crore, including Rs 10,000 crore of state development loans.
On the global front, Asian markets were trading mostly in green after US shares and Treasuries rallied as investors judged that a jump in inflation is likely to be transitory, leaving scope for ongoing central-bank support. Back home, on the sectoral front, stocks related to coal sector remained in watch as the government said the coal sector is facing a bit of headwind from the financial markets and that could be one of the reasons for global players not participating in commercial coal mine auctions.
The BSE Sensex is currently trading at 52604.93, up by 304.46 points or 0.58% after trading in a range of 52472.90 and 52626.64. There were 21 stocks advancing against 9 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index rose 0.35%, while Small cap index was up by 0.60%.
The top gaining sectoral indices on the BSE were Energy up by 1.31%, Metal up by 1.27%, IT up by 1.05%, TECK up by 0.87% and Oil & Gas up by 0.85%, while Realty down by 0.32%, FMCG down by 0.07% and Consumer Durables down by 0.04% were the top losing indices on BSE.
The top gainers on the Sensex were Power Grid Corporation up by 2.38%, Bajaj Finance up by 1.93%, HCL Tech. up by 1.35%, Reliance Industries up by 1.33% and Dr. Reddys Lab up by 1.26%. On the flip side, SBI down by 0.29%, Hindustan Unilever down by 0.27%, ITC down by 0.26%, ICICI Bank down by 0.24% and Nestle down by 0.23% were the top losers.
Meanwhile, Credit rating agency ICRA in its latest report has said with decline in number of fresh COVID-19 cases and easing of restrictions, the country's gross domestic product (GDP) will grow at 8.5 percent in FY2021-22. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. It also said if vaccine coverage is accelerated following the re-centralised procurement policy, the GDP expansion in FY2022 may be as high as 9.5 percent, with a widening upside in Q3 and Q4 of FY2022.
The agency has taken into account the likely higher outgo towards food subsidies by the government in FY2022, relative to the budgeted level, following the decision to provide free food grains in May-November 2021. It has excluded the impact of the release of food subsidy arrears in FY2021, based on the clarification provided by the National Statistical Office (NSO). The monthly pattern of subsidy release by the government cannot be ascertained at present. Therefore, it cautions that the quarterly trend in GDP growth could differ from our baseline assumption (+14.9 per cent in Q1, +8 per cent in Q2, +5.6 per cent in Q3 and +7 per cent in Q4 of FY2022), based on when the subsidy pay-out is booked. It also expects a prolonged negative impact of the second wave on consumer sentiment and demand, with healthcare and fuel expenses eating into disposable income, and less pent-up/replacement demand in FY2022 relative to FY2021.
Notwithstanding the expectation of a normal monsoon buffering the prospects for crop output and less reverse migration in 2021 compared to 2020, ICRA expects the combination of the sharp rise in rural infections, loss of employment as well as remittances to weaken the rural sentiment and demand. After the satiation of the pent-up demand seen during the festive season in 2020, purchases of consumer durables may be restricted, which would impact capacity utilisation in FY2022.
The CNX Nifty is currently trading at 15818.70, up by 80.95 points or 0.51% after trading in a range of 15781.45 and 15835.55. There were 33 stocks advancing against 17 stocks declining on the index.
The top gainers on Nifty were Coal India up by 4.44%, Power Grid up by 2.48%, Bajaj Finance up by 1.82%, Reliance Industries up by 1.26% and Dr. Reddys Lab up by 1.25%. On the flip side, Adani Ports &SEZ down by 1.10%, UPL down by 0.70%, SBI down by 0.37%, Nestle down by 0.34% and SBI Life Insurance down by 0.31% were the top losers.
Asian markets were trading mostly in green; Hang Seng increased 112.12 points or 0.39% to 28,851.00, Taiwan Weighted strengthened 71.25 points or 0.42% to 17,230.47, KOSPI rose 22.35 points or 0.69% to 3,246.99, Nikkei 225 surged 0.73 points or 0% to 28,959.29 and Straits Times advanced 0.39 points or 0.01% to 3,162.89.
On the flip side, Jakarta Composite lost 3.33 points or 0.05% to 6,104.21 and Shanghai Composite declined 9.04 points or 0.25% to 3,601.82.