Key benchmark indices continued to trade in positive territory in morning session, ahead of weekly expiry of index futures and option contracts on the back of broad-based buying interest amid positive cues from other Asian markets. Sentiments remained positive with Union Minister for Electronics and Information Technology Ashwini Vaishnaw’s statement that the government is keen to make India a $250 billion electronic manufacturing hub in the next five years. He also expressed happiness over the electronics manufacturing industry assuring $300 billion revenue by 2025-26. Adding some optimism, with an aim to boost consumption in the economy and enhance the tax base, industry body -- the PHD Chamber of Commerce and Industry (PHDCCI) has suggested the rationalisation of direct and indirect tax rates. PHDCCI President Pradeep Multani said refuelling of consumption demand should be the theme of the Budget to have a multiplier effect on production possibilities, private investments and employment creation in the country.
On the global front, Asian markets were trading mostly higher helped by advances in Chinese real estate shares, though fears about the Omicron variant of the new coronavirus capped gains regionally. Back home, on the sectoral front, banking stocks remained in limelight as Banks' slippages have declined quarter-over-quarter (QoQ). Total slippages were at Rs 79,951 crore in the Q2 of FY22, as compared to Rs 98,536 crore in the first quarter.
The BSE Sensex is currently trading at 58097.15, up by 412.36 points or 0.71% after trading in a range of 57680.41 and 58124.25. There were 25 stocks advancing against 5 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index rose 0.32%, while Small cap index was up by 0.63%.
The top gaining sectoral indices on the BSE were Consumer Durables up by 1.34%, Oil & Gas up by 1.23%, Energy up by 0.96%, Healthcare up by 0.86% and Utilities up by 0.80%, while Metal down by 0.52%, Realty down by 0.27% and Capital Goods down by 0.06% were the top losing indices on BSE.
The top gainers on the Sensex were Power Grid Corporation up by 2.95%, HDFC up by 2.94%, Titan Company up by 2.32%, Mahindra & Mahindra up by 2.31% and Sun Pharma up by 2.18%. On the flip side, Axis Bank down by 0.85%, ICICI Bank down by 0.84%, Larsen & Toubro down by 0.63%, Tata Steel down by 0.27% and SBI down by 0.18% were the top losers.
Meanwhile, the Reserve Bank of India (RBI) in its annual publication titled 'State Finances: A Study of Budgets of 2021-22' has said the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022 which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. Further, it said as the impact of the second COVID-19 wave wanes, state governments need to take credible steps to address debt sustainability concerns.
It noted that the budgeted consolidated gross fiscal deficit (GFD) of 3.7 per cent of GDP for states for the year 2021-22 - lower than the 4 per cent level as recommended by the FC-XV (15th Finance Commission) reflect the state governments’ intent towards fiscal consolidation. Besides, it mentioned that in the medium term, improvements in the fiscal position of state governments will be contingent upon reforms in the power sector as recommended by FC-XV and specified by the Centre – creating transparent and hassle-free provision of power subsidy to farmers; preventing leakages; and improving the health of the power distribution companies (DISCOMs) by alleviating their liquidity stress in a sustainable manner.
Timely payments of state dues to DISCOMS and, in turn, by them to Generation Companies (GENCOS) hold the key to the sector’s financial health. Moreover, it said undertaking power sector reforms will not only facilitate additional borrowings of 0.25 per cent of GSDP (Gross State Domestic Product) by the states but also reduce their contingent liabilities due to improvement in financial health of the DISCOMs.
It pointed out that in 2020-21, the first wave of the pandemic posed states the critical challenge of declining revenue and the need for higher spending. To partially offset the revenue shortfall, it said states hiked their duties on petrol, diesel and alcohol and focused on rationalising non-priority expenditures to make room for higher expenditure on healthcare and social services. It said the year 2021-22 started on a similar note, with the outbreak of the second wave. Hoverer, it stated the impact of the second wave on state finances is likely to be less severe than the first wave due to less stringent and localised restrictions imposed this time as opposed to the nationwide lockdown during the first wave of COVID-19.
The CNX Nifty is currently trading at 17286.50, up by 119.60 points or 0.70% after trading in a range of 17149.30 and 17296.55. There were 41 stocks advancing against 9 stocks declining on the index.
The top gainers on Nifty were HDFC up by 3.00%, Power Grid Corp up by 2.92%, BPCL up by 2.45%, Mahindra & Mahindra up by 2.33% and Sun Pharma up by 2.22%. On the flip side, Axis Bank down by 0.85%, Larsen & Toubro down by 0.78%, Cipla down by 0.73%, ICICI Bank down by 0.69% and Hindalco down by 0.39% were the top losers.
Asian markets were trading mostly higher; Taiwan Weighted strengthened 87.84 points or 0.5% to 17,673.83, Jakarta Composite soared 43.32 points or 0.67% to 6,551.00, Hang Seng increased 43.05 points or 0.18% to 23,701.97, KOSPI rose 31.93 points or 1.1% to 2,931.65 and Shanghai Composite gained 0.14 points or 0% to 3,577.03.
On the flip side, Straits Times trembled 6.18 points or 0.2% to 3,092.07 and Nikkei 225 slipped 161.16 points or 0.58% to 27,774.46.