Benchmarks trade in fine-fettle in early deals; RBI’s policy outcome eyed

Indian equity benchmarks made optimistic start on Friday tracking rally in global peers. Markets are trading in fine-fettle in early deals ahead of the Reserve Bank of India’s (RBI) monetary policy outcome. Buying in PSU, Bankex and Consumer Durables stocks supported the domestic indices. There are expectations that the RBI’s rate-setting Monetary Policy Committee (MPC) is likely to hold interest rates and continue with accommodative policy stance so that necessary monetary action could be taken to push growth. This is the first MPC meeting after the presentation of the Union Budget 2021-22. The MPC kept the key benchmark rate unchanged in its last three reviews. Some support also came in as Finance Minister Nirmala Sitharaman exuded confidence that the disinvestment calendar announced in the Union Budget will work well. She added the government is confident that revenue generation will improve through this year and it will be bringing in non-tax revenue other than just disinvestments through various routes, including monetisation of assets. Meanwhile, the total number of active cases in the country has fallen to 153,270, while the caseload tally stands at 10,803,533.

Global cues remained strong with all the Asian markets were trading higher following the record closing highs overnight on Wall Street amid upbeat corporate earnings results and a continued decline in first-time claims for US unemployment benefits. Progress in the vaccine rollout and optimism about US fiscal stimulus also lifted the markets. Meanwhile, Japan will see preliminary December numbers for its leading and coincident index today. Back home, oil & gas and oil marketing companies stocks were in limelight as petrol and diesel prices climbed to fresh highs in the country as rates were hiked by the most in recent times, even as fuel retailers said the government can cut taxes to ease consumer burden. In scrip specific development, Vedanta gained as its board approved an expansion of Lanjigarh alumina refinery from 2 MTPA to 5 MTPA at a cost of Rs 3,779 crore.

The BSE Sensex is currently trading at 51006.44, up by 392.15 points or 0.77% after trading in a range of 50800.21 and 51073.27. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were PSU up by 3.28%, Bankex up by 2.83%, Consumer Durables up by 1.65%, Realty up by 1.65%, Capital Goods up by 0.30%, while TECK down by 0.85%, Auto down by 0.77%, IT down by 0.69%, Telecom down by 0.64%, Utilities down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 12.66%, Indusind Bank up by 2.35%, Kotak Mahindra Bank up by 2.26%, HDFC Bank up by 1.93% and HDFC up by 1.77%. On the flip side, Power Grid down by 1.46%, Mahindra & Mahindra down by 1.43%, TCS down by 0.99%, Bajaj Auto down by 0.94% and Maruti Suzuki down by 0.87% were the top losers.

Meanwhile, International Monetary Fund (IMF) has welcomed India's Union Budget for focussing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery. IMF’s Director of Communications, Gerry Rice has said that the Union Budget rightly focuses on health, education, public infrastructure and, if fully implemented, can help increase India's growth potential.

He said ‘we also welcome measures to improve fiscal transparency by including food subsidies in the budget. Of course, a medium-term fiscal consolidation strategy will be important to ensure credibility. And we also agree with the need to further strengthen the financial sector and look forward to the details of the proposed measures in that area.’

In Union Budget, Finance Minister Sitharaman has proposed a sharp increase in expenditure on infrastructure, doubling of healthcare spending and raising the cap on foreign investment in insurance in her Budget for the next fiscal in a bid to pull Indian's economy out of the pandemic-induced economic crisis.

The CNX Nifty is currently trading at 14980.45, up by 84.80 points or 0.57% after trading in a range of 14944.00 and 15014.65. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were SBI up by 13.31%, Indusind Bank up by 2.92%, Kotak Mahindra Bank up by 2.13%, Axis Bank up by 2.03% and HDFC up by 2.03%. On the flip side, Coal India down by 1.67%, Power Grid down by 1.49%, Mahindra & Mahindra down by 1.48%, Bharti Airtel down by 1.42% and UPL down by 1.26% were the top losers.

All the Asian markets were trading in green; Nikkei surged 384.35 points or 1.36% to 28,726.30, Straits Times added 1.48 points or 0.05% to 2,907.06, Hang Seng rose 133.52 points or 0.46% to 29,247.02, Taiwan Weighted jumped 112.85 points or 0.72% to 15,819.07, KOSPI gained 11.45 points or 0.37% to 3,099.00, Jakarta Composite expanded 9.30 points or 0.15% to 6,116.52 and Shanghai Composite was up by 16.23 points or 0.46% to 3,518.09.