Key gauges continue to trade jubilantly

Indian equity benchmarks continued to trade jubilantly in late morning trade, as traders continued to buy fundamentally strong stocks ahead of US Federal Reserve's key interest rate decision. Investors expect the Fed to announce a quarter-point hike, but are less sure if it will signal three or four for the entire year. Sentiments remained up-beat on report that foreign portfolio investors (FPIs) bought shares worth Rs 344.16 crore, while domestic institutional investors (DIIs) made purchases worth Rs 731.17 crore on March 20. Traders shrugged off Raghuram Rajan’s statement that India can move up from the 7.5% growth but that is not enough to create employment for about 12 million people coming into the labour market every year.

On the global front, Asian markets were trading in green ahead of the outcome of Federal Reserve’s first meeting since the appointment of its new chair, Jerome Powell. Back on domestic turf, auto stocks remained in limelight despite report that credit ratings agency, Crisil Ratings in its latest report has said that the new policy for scrapping commercial vehicles (CV) that are more than 20 years old, is likely to have limited impact and may not increase demand for new vehicles considerably. In scrip specific development, SSWL surges on bagging export order for supply of Steel Wheels for UK Aftermarket with total order covers supplies of approximately 7,000 wheels.

The BSE Sensex is currently trading at 33322.54, up by 325.78 points or 0.99% after trading in a range of 33090.82 and 33354.93. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.00%, while Small cap index was up by 1.24%.

The top gaining sectoral indices on the BSE were Realty up by 2.26%, Telecom up by 1.98%, Consumer Durables up by 1.21%, PSU up by 1.18% and Bankex was up by 1.12%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 3.46%, NTPC up by 2.35%, Axis Bank up by 2.05%, SBI up by 1.66% and HDFC was up by 1.66%. On the flip side, Hero MotoCorp down by 0.67%, Tata Steel down by 0.22%, Power Grid down by 0.05% and Adani Ports was down by 0.04% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that the new policy for scrapping commercial vehicles (CV) that are more than 20 years old, is likely to have limited impact and may not increase demand for new vehicles considerably. The much-awaited vehicle scrap policy was given 'in-principle' approval at a high-level meeting at the Prime Minister’s Office (PMO) and is awaiting approval from the Goods and Services Tax (GST) Council.

The report mentioned that the total population of commercial vehicles that will be older than 20 years in fiscal 2021 would be 50,000 vehicles, much lower than the government's earlier estimate of 28 million vehicles and their internal estimate of 6,40,000 vehicles. It also said that since 70,000 to 90,000 vehicles are scrapped every year on regular basis, the new policy would not have much of an impact on the industry. Besides, the rating agency noted that the two major changes made to the Ministry of Road Transport and Highways’ (MORTH) earlier draft note include a change in the age of the vehicle from 15 years to 20 years and implementation of the policy from April 1, 2020, coinciding with the implementation of BS-VI norms.

Crisil further said “if we look at the various vehicle segments in the commercial vehicles industry, very few vehicles would actually be older than 20 years in the current vehicular population.” It also said that Medium and heavy commercial vehicles (MHCVs) that typically have a life of 20 years, would be eligible under the scrappage scheme. It pointed out that out of the MHCVs, medium commercial vehicles (16 tonne gross vehicle weight) would benefit the most, while the number of multi-axle vehicles, intermediate commercial vehicles (ICVs), tractor trailers and light commercial vehicles opting for the scheme would be very limited. However, it said that the benefit offered under the scrappage policy is expected to be 15 percent of the vehicle's price, the effect will be muted as prices of diesel vehicles are expected to go up by 10-15 per cent once the new norms come into force.

The CNX Nifty is currently trading at 10213.85, up by 89.50 points or 0.88% after trading in a range of 10173.20 and 10227.30. There were 38 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.36%, Indiabulls Housing up by 3.07%, Ultratech Cement up by 2.65%, NTPC up by 2.22% and Axis Bank up by 1.90%. On the flip side, Tech Mahindra down by 1.07%, Eicher Motors down by 1.06%, Bharti Infratel down by 0.92%, Hero MotoCorp down by 0.59% and Aurobindo Pharma down by 0.38% were the top losers.

All the Asian markets were trading in green; KOSPI Index gained 1.64 points or 0.07% to 2,487.16, FTSE Bursa Malaysia KLCI raised 5.34 points or 0.29% to 1,861.73, Shanghai Composite increased 18.16 points or 0.55% to 3,308.80 Taiwan Weighted increased 28.39 points or 0.26% to 11,039.23, Jakarta Composite increased 50.43 points or 0.81% to 6,294.01 and Hang Seng surged 342.45 points or 1.09% to 31,892.38