Benchmarks trade in fine-fettle in early deals; Sensex surpasses 50,000 mark

Indian equity benchmarks made optimistic start on Thursday tracking global markets. Domestic indices are trading in fine-fettle in early deals with gains of over half a percent each. Buying in all the sector indices except Metal and Realty, supported the markets. Traders took note of report that India recorded 15,277 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen to 193,650, while the caseload tally stands at 10,611,719. Meanwhile, Fitch Ratings said that India’s medium-term growth potential is at around 6.5% but weak implementation of reforms, combined with continued financial sector problems, could lower its potential. It said the revival of the reform agenda is among the Indian government’s policy responses to the Covid pandemic shock.

Global cues remained firm with all the Asian markets trading higher following the record closing highs overnight on Wall Street after Joe Biden was sworn in as the 46th President of the US. Investors are optimistic that the new Biden administration's potential spending increase will spur growth in the world's largest economy. Investors also looking ahead to the Bank of Japan's monetary policy decision due later in the day. The BoJ is widely expected to keep its benchmark lending rate unchanged at -0.1%.

Back home, MSMEs stocks were in limelight with the finance ministry’s statement that banks have sanctioned an additional Rs 15,571 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) to MSMEs that were impacted by the coronavirus pandemic. In scrip specific development, Reliance Industries jumped as its Rs. 24,713-crore billion deal to buy Future Group's retail assets has been cleared by market regulator SEBI. Future Retail also traded higher.

The BSE Sensex is currently trading at 50058.71, up by 266.59 points or 0.54% after trading in a range of 49964.00 and 50126.73. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.62%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Energy up by 1.70%, Consumer Durables up by 1.49%, Capital Goods up by 1.15%, Industrials up by 1.04%, Auto up by 0.99%, while Metal down by 0.38%, Realty down by 0.18% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.68%, Bajaj Finance up by 3.07%, Reliance Industries up by 2.67%, Bajaj Auto up by 1.40% and Indusind Bank up by 1.34%. On the flip side, HDFC down by 1.02%, TCS down by 0.95% and HDFC Bank down by 0.26% were the few losers.

Meanwhile, with general insurance premium growth in positive territory, Moody's Investors Service in its latest report has stated that Indian insurance companies are likely to withstand the economic downturn exacerbated by the coronavirus pandemic. The report said that general insurance premium growth has been in the positive territory due to the persistent strong sales of health and protection cover. It noted that resilient sales of health and protection policies reflected the rising consumer awareness about these products during the pandemic, as well as regulator's actions in enabling the insurers to offer protection against the virus.

The report added the Indian insurers have also rapidly developed their digital offerings during the pandemic. it said ‘although the economic slowdown had had an adverse impact on the Indian insurers, with general insurance growth slowing to 2.5 per cent and life insurers' new business premiums falling by 1.7 per cent in the nine months till December 2020, we expect general insurance premium growth to remain in the positive territory due to persistently strong demand for health and protection coverage’.

Over the longer term, the report said the industry may benefit as the central government injects capital into publicly owned insurers, and as private insurers reinforce their solvency through a combination of raising of capital and M&A. The rating agency has said that India's real GDP may contract by 10.6 per cent in FY21. It added ‘we expect general insurance premium growth to remain in positive territory. Persistently strong demand for health and protection coverage will support general and life insurance premiums’. Health premiums rose 13.7 per cent in the fiscal's nine months up to December 2020, supporting general insurance premium growth.

The CNX Nifty is currently trading at 14721.35, up by 76.65 points or 0.52% after trading in a range of 14695.25 and 14738.30. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.98%, Tata Motors up by 3.49%, Bajaj Finance up by 3.29%, UPL up by 2.91% and Reliance Industries up by 2.22%. On the flip side, Adani Ports & SEZ down by 1.27%, JSW Steel down by 0.92%, TCS down by 0.79%, HDFC down by 0.73% and GAIL India down by 0.72% were the top losers.

Asian markets were trading in green; Nikkei surged 250.28 points or 0.88% to 28,773.54, Straits Times rose 4.01 points or 0.13% to 3,002.78, Hang Seng gained 27.49 points or 0.09% to 29,989.96, Taiwan Weighted jumped 287.00 points or 1.82% to 16,093.18, KOSPI soared 17.90 points or 0.57% to 3,132.45, Jakarta Composite added 5.32 points or 0.08% to 6,435.08 and Shanghai Composite was up by 46.52 points or 1.30% to 3,629.61.