Equity parameters continue to trade in high spirit

Indian equity parameters continued to trade in high spirit in afternoon session, on account of broad based buying in blue chip counters amid positive Asian cues. All sectoral indices were trading firm and realty was the top gainer on BSE, up by over 4% followed by capital goods and industrials indices, trading up over 2% each. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 1.50% each. Sentiments were upbeat with ICRA’s latest report stating that the economic activity recorded a broad-based improvement in December as against November, showing a return of demand. It said most of the indicators have displayed a year-on-year (y-o-y) expansion in December 2020, which signals a ‘tentative return to pre-COVID normalcy’. Traders were also energized as Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion.

On the global front, most of the Asian markets were trading higher on optimism about the global economic recovery and vaccine rollouts which trumped ongoing concerns about soaring virus infections. Back on street, the overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 2050:729; while 154 shares remained unchanged.

The BSE Sensex is currently trading at 49201.51, up by 637.24 points or 1.31% after trading in a range of 48805.54 and 49237.12. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.74%, while Small cap index was up by 1.52%.

The top gaining sectoral indices on the BSE were Realty up by 4.14%, Capital Goods up by 2.66%, Industrials up by 2.46%, Energy up by 2.10% and Power was up by 1.94%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finserv up by 4.74%, Bajaj Finance up by 4.21%, Larsen & Toubro up by 3.10%, Reliance Industries up by 2.28% and HDFC was up by 2.05%. On the flip side, Tech Mahindra down by 0.93% and Mahindra & Mahindra was down by 0.22% were the only losers.

Meanwhile; Finance Ministry has released the 12th instalment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs 72,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax (GST).

Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and 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 amount has been borrowed this week at an interest rate of 4.43 per cent. The ministry said ‘Till now, 65 per cent of the total estimated GST compensation shortfall has been released to the States & UT with Legislative Assembly. Out of this, an amount of Rs 65,582.96 crore has been released to the States and an amount of Rs 6,417.04 crore has been released to the 3 UTs with Legislative Assembly’. Thus, the total amount released so far in 12 instalments is Rs 72,000 crore at an average interest rate of 4.70 per cent.

The remaining five states -- Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim -- do not have a gap in revenue on account of GST implementation. In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Centre has also granted additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product (GSDP) to the states to help them in mobilising additional financial resources.

The CNX Nifty is currently trading at 14461.65, up by 180.35 points or 1.26% after trading in a range of 14350.85 and 14478.45. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 4.79%, Bajaj Finance up by 4.28%, Grasim Industries up by 3.93%, Tata Motors up by 3.62% and Larsen & Toubro was up by 2.85%. On the flip side, Tech Mahindra down by 0.91%, Britannia Industries down by 0.33%, Mahindra & Mahindra down by 0.33%, Divis Lab down by 0.11% and Dr. Reddys Lab was down by 0.08% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 391.25 points or 1.39% to 28,633.46, KOSPI rose 78.73 points or 2.61% to 3,092.66, Taiwan Weighted strengthened 265.37 points or 1.7% to 15,877.37, Straits Times advanced 8.36 points or 0.28% to 2,998.76 and Hang Seng was up by 636.08 points or 2.2% to 29,498.85.

On the other side, Jakarta Composite lost 34.00 points or 0.53% to 6,355.83 and Shanghai Composite was down by 37.61 points or 1.05% to 3,558.61.