Equity markets extend gains in late afternoon session

Indian equity markets extended their gains in late afternoon session, with the Sensex and the Nifty gaining above 200 and 40 points, respectively. Sentiments got boost after Ministry of Finance has released the 9th weekly instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation. Sector wise, banking sector remained in focus, as rating agency ICRA in its latest report has said that banks' gross non-performing assets (NPAs) and net NPAs are expected to rise to 10.1-10.6 percent and 3.1-3.2 percent, respectively by March 2021 from 7.9 percent and 2.2 percent, respectively as of September 2020. However, it said net NPAs and credit provisions will subsequently trend lower in 2021-22 as banks have reported strong collections on their loan portfolio with most of them reporting collections of over 90 percent.

On the global front, Asian markets were trading mixed following a record-breaking lead from Wall Street as investors cheered the passage of a huge US stimulus bill which has helped temper fears about surging coronavirus infections. European markets were trading higher following a rally in U.S. stocks on Monday.

The BSE Sensex is currently trading at 47581.14, up by 227.39 points or 0.48% after trading in a range of 47361.90 and 47714.55. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.03%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Bankex up by 1.28%, IT up by 0.50%, TECK up by 0.37%, Consumer Discretionary up by 0.12% and FMCG was up by 0.04%, while Metal down by 1.15%, Power down by 0.86%, Energy down by 0.56%, Basic Materials down by 0.33% and Healthcare was down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.64%, Axis Bank up by 1.96%, HDFC up by 1.94%, Tech Mahindra up by 1.58% and HCL Tech up by 1.51%. On the flip side, NTPC down by 1.59%, Nestle down by 1.58%, Power Grid down by 0.91%, Dr. Reddys Lab down by 0.80% and Mahindra & Mahindra down by 0.78% were the top losers.

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance has released the 9th weekly instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The amount released this week was the 9th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.1508%. So far, an amount of Rs 54,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7488%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP)to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The CNX Nifty is currently trading at 13916.45, up by 43.25 points or 0.31% after trading in a range of 13859.90 and 13967.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.58%, Axis Bank up by 1.95%, HDFC up by 1.68%, Tech Mahindra up by 1.58% and HCL Tech up by 1.32%. On the flip side, Coal India down by 1.78%, Nestle down by 1.76%, Hindalco down by 1.73%, NTPC down by 1.69% and Tata Motors down by 1.34% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 714.12 points or 2.66% to 27,568.15, Hang Seng increased 253.86 points or 0.96% to 26,568.49, KOSPI rose 11.91 points or 0.42% to 2,820.51 and Straits Times was up by 9.46 points or 0.33% to 2,849.60. On the flip side, Taiwan Weighted dropped 11.02 points or 0.08% to 14,472.05, Shanghai Composite declined 18.25 points or 0.54% to 3,379.04 and Jakarta Composite was down by 57.38 points or 0.94% to 6,036.17.

European markets were trading higher, UK’s FTSE 100 increased 119.00 points or 1.83% to 6,621.11, France’s CAC increased 30.06 points or 0.54% to 5,618.44 and Germany’s DAX was up by 100.87 points or 0.73% to 13,891.16.