Indian equity benchmarks made flat-to-positive start on Friday tracking firm global cues. Markets soon tuned volatile but managed to trade above neutral lines. Indices are trading higher with marginal gains in early deals on account of buying in Metal, Auto and Basic Materials stocks, whereas selling in Energy, Oil & Gas and Utilities kept upside in check. Sentiments got some support as Chief Economic Adviser K.V. Subramanian said food inflation is likely to moderate on account of the twin impact of opening up of economic activities and good monsoon and attributed the rise in food prices to restrictions imposed by several states during April-May to deal with the second wave of Covid-19. However, upside remained capped as some cautiousness prevailed in the markets as India reported on Thursday 54,069 new Covid-19 infections over the past 24 hours, data from the health ministry showed. It had 1,321 new fatalities, taking the total death toll to 39,1981.
On the global front, all the Asian markets were trading higher following the broadly positive cues overnight from Wall Street after US President Joe Biden accepted a bipartisan Senate deal to spend $579 billion on infrastructure projects that renewed buying interest amid optimism for economic recovery. Back home, NBFCs stocks were in focus as the Reserve Bank of India (RBI) tied down a non-banking financial company’s ability to pay dividend to certain factors, including how much bad debt it has in its book and whether it has declared it correctly. In scrip specific developments, Ashok Leyland traded higher as it reported a net profit of Rs 241.17 crore in Q4FY21 as against a loss of Rs 57.32 crore, YoY. Revenue rose 82 percent to Rs 7,000.49 crore from Rs 3,838.46 crore, YoY.
The BSE Sensex is currently trading at 52824.14, up by 125.14 points or 0.24% after trading in a range of 52643.36 and 52899.47. There were 18 stocks advancing against 12 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index rose 0.60%, while Small cap index was up by 0.40%.
The top gaining sectoral indices on the BSE were Metal up by 2.33%, Auto up by 1.09%, Basic Materials up by 1.02%, Realty up by 1.01%, Telecom up by 0.94%, while Energy down by 1.59%, Oil & Gas down by 0.71%, Utilities down by 0.63%, Power down by 0.42%, FMCG down by 0.32% were the top losing indices on BSE.
The top gainers on the Sensex were Tata Steel up by 3.97%, HCL Technologies up by 1.75%, ICICI Bank up by 1.68%, SBI up by 1.11% and Tech Mahindra up by 1.08%. On the flip side, Reliance Industries down by 2.02%, Hindustan Unilever down by 1.30%, Asian Paints down by 1.20%, Kotak Mahindra Bank down by 0.72% and NTPC down by 0.55% were the top losers.
Meanwhile, attributing the rise in food prices to restrictions imposed by several states during April-May to deal with the second wave of Covid-19, Chief Economic Adviser (CEA) K V Subramanian has said food inflation is likely to moderate on account of the twin impact of opening up of economic activities and good monsoon. Moreover, he asserted that high food inflation has not impacted a large section of population as they are being given free ration under the Pradhan Mantri Garib Kalyan Yojana.
He said ‘Some of the increase in food inflation in the recent print has been because of the restrictions that have been placed...we even saw last year when the lockdown happened and the supply side was affected, impacting food inflation, which in turn then led to an impact on CPI inflation. So I think that's a contributing factor and given that now a lot of the restrictions are getting eased, I do expect that food inflation should moderate.’
The retail inflation for May breached RBI's upper tolerance limit of 6 per cent, putting pressure on both the central bank and government to cool down food prices. Earlier this month, the government reduced the tariff value for import of edible oil, including palm oil, by up to USD 112 per tonne. Besides easing of restrictions, he said, a good monsoon will also have a benign impact on food prices. Talking about the effect of rising petrol and diesel prices on retail inflation, he said it will not be significant as the weightage of fuel and light category in the Consumer Price Index (CPI)-based inflation is just 7.94 per cent.
The CNX Nifty is currently trading at 15811.05, up by 20.60 points or 0.13% after trading in a range of 15782.80 and 15844.45. There were 31 stocks advancing against 19 stocks declining on the index.
The top gainers on Nifty were Tata Steel up by 4.03%, JSW Steel up by 2.24%, Tata Motors up by 2.00%, Hindalco up by 1.96% and HCL Technologies up by 1.67%. On the flip side, Reliance Industries down by 2.24%, Hindustan Unilever down by 1.47%, Asian Paints down by 1.10%, UPL down by 0.92% and Nestle down by 0.74% were the top losers.
Asian markets were trading in green; Nikkei 225 rose 225.63 points or 0.78% to 29,100.86, Straits Times increased 1.88 points or 0.06% to 3,121.50, Hang Seng jumped 338.12 points or 1.17% to 29,220.58, Taiwan Weighted surged 173.33 points or 1.00% to 17,581.29, KOSPI gained 19.11 points or 0.58% to 3,305.21, Jakarta Composite added 43.50 points or 0.72% to 6,055.56 and Shanghai Composite was up by 28.14 points or 0.79% to 3,594.79.