Indices end at record closing highs on Thursday

Indian equity benchmarks ended at record closing highs yet again on Thursday, tracking gains in index majors HDFC, Bajaj Finance, HDFC Bank and Indusind Bank. Markets made slightly positive start, as traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that the government is making efforts to deregulate the economy with an aim to attract greater investments from across the world. He said the government has opened up defence, manufacturing, mining, finance and capital market sectors. Buying further crept in as SBI Research scaled up its projections for the economy, projecting gross domestic product (GDP) to contract 7.4 per cent during the current financial year compared to its earlier forecast of a 10.9 per cent fall.

Key indices added more gains in the late afternoon session, taking support from Former RBI Governor D Subbarao’s statement that while managing a crisis is extremely difficult and the Reserve Bank of India (RBI) had been successful in preserving the financial stability of the economy during the present coronavirus disease (covid-19) pandemic. Some respite also came as a study by the World Economic Forum showed that few economies in the world are ready for long-term prosperity through improved public services, green investments and digitization. The special edition of the WEF's Global Competitiveness Report, which examined how the recovery from the COVID-19 crisis can build productive, sustainable and inclusive economic systems, found that the countries with advanced digital economies, strong social safety nets and robust healthcare systems have managed the impact of the pandemic more effectively.

On the global front, Asian markets ended mostly lower on Thursday as investors remained wary of spiking Covid-19 cases and looming virus restrictions. However, losses remain capped as the U.S. Federal Reserve signaled that it would keep very easy policy in place until it sees 'substantial further progress' in employment and inflation. European markets were trading mostly in green, on optimism about the possibility of a Brexit trade deal. Meanwhile, all eyes were on a Bank of England meeting later in the day. The nine-member committee is expected to hold the key rate a record low 0.10 percent and the asset purchase program at GBP 895 billion after raising it by GBP 150 billion in November. Back home, on the sectoral front, Sugar stocks were in focus after the government approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener during the ongoing marketing year 2020-21 as part of its efforts to help them clear outstanding dues to sugarcane farmers. Telecom stocks also were in limelight after the Centre set the ball rolling for 4G auction that is expected to fetch the exchequer Rs 3.92 trillion by offering 2,251 megahertz (MHz) airwaves. The coveted 5G spectrum has been kept out of the offer.

Finally, the BSE Sensex rose 223.88 points or 0.48% to 46,890.34, while the CNX Nifty was up by 58.00 points or 0.42% to 13,740.70.

The BSE Sensex touched high and low of 46,992.57 and 46,627.60, respectively and there were 13 stocks advancing against 17 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.13%, while Small cap index was down by 0.23%.

The top gaining sectoral indices on the BSE were Finance up by 1.01%, Capital Goods up by 0.74%, Realty up by 0.61%, Bankex up by 0.39% and Consumer Durables up by 0.21%, while Metal down by 1.42%, Oil & Gas down by 0.99%, Utilities down by 0.97%, FMCG down by 0.68% and Telecom down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.92%, Bajaj Finance up by 2.74%, HDFC Bank up by 2.17%, Indusind Bank up by 1.23% and Ultratech Cement up by 1.08%. On the flip side, ONGC down by 1.55%, Maruti Suzuki down by 1.47%, Tata Steel down by 1.35%, Hindustan Unilever down by 1.24% and Bajaj Auto down by 1.18% were the top losers.

Meanwhile, SBI Research in its latest report has scaled up its projections for the economy, projecting gross domestic product (GDP) to contract 7.4 per cent during the current financial year (FY21) compared to its earlier forecast of a 10.9 per cent fall.

It said apart from Q3 FY21, the Q4 growth will also be in positive territory (at 1.7 per cent). However, all projections are conditional on the absence of another wave of infections. The author of the report, Soumya Kanti Ghosh, believes it would take seven quarters from the fourth quarter of FY21 for GDP to reach the pre-pandemic level in nominal terms.

He said the revised GDP estimates are based on SBI 'Nowcasting Model' with 41 high-frequency indicators associated with industry activity, service activity, and global economy. He said based on this model, the GDP growth for the third quarter would be around 0.1 per cent (with downward bias).

The CNX Nifty traded in a range of 13,773.25 and 13,673.55 and there were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Divis Lab up by 3.02%, HDFC up by 2.70%, Bajaj Finance up by 2.40%, HDFC Bank up by 2.08% and Indusind Bank up by 1.75%. On the flip side, Hindalco down by 2.17%, Coal India down by 1.79%, Maruti Suzuki down by 1.70%, Adani Ports & SEZ down by 1.43% and Tata Steel down by 1.42% were the top losers.

European markets were trading mostly in green; France’s CAC increased 14.30 points or 0.26% to 5,561.98 and Germany’s DAX increased 109.24 points or 0.81% to 13,675.22, while UK’s FTSE 100 decreased 4.97 points or 0.08% to 6,565.94.

Asian markets ended mostly lower on Thursday as concerns over continued spike in global corona virus cases and lockdown measures kept the sentiment under pressure. However, the US Federal Reserve’s commitment to continue its asset purchase program and progress toward a $900 billion corona virus relief deal, capped some losses on the markets. Japanese shares ended marginally higher despite pressure from a stronger yen. Japan Post Insurance shares surged on private report said  that it would buy back $2.9 billion of its own shares from its parent Japan Post Holdings. Chinese shares climbed on growing optimism over swift recovery in the world's second-largest economy.