Barometer gauges maintain gains

Indian equity markets maintained their upward momentum in the afternoon session following gains in public sector undertaking (PSU), banking and realty stocks. Healthy buying was observed in blue-chip stocks like SBI, Kotak Mahindra Bank and ITC. Sentiments were upbeat as Reserve Bank of India kept the repo rate unchanged at 4 per cent while the stance remained 'accomodative'. Besides, the RBI projected GDP growth of 10.5 per cent in FY22 for India while projection for CPI-based inflation was revised to 5.2 per cent for Q4FY21. Also, RBI has proposed to provide funds to non-banking finance companies (NBFCs) from banks under on tap TLTRO scheme for lending to some stressed sectors. In October last year, the RBI had announced on tap targeted long term repo operations (TLTRO) scheme for banks. The scheme is available till March 31, 2021.

On the global front, all Asian markets were trading higher as investors growing increasingly optimistic about the economic outlook as vaccines are rolled out and virus rates slow. Back home, in scrip specific developments, ITC jumped as its board to mull interim dividend and Minda Industries surges on reporting over 2-fold jump in Q3 consolidated net profit.

The BSE Sensex is currently trading at 50909.51, up by 295.22 points or 0.58% after trading in a range of 50565.29 and 51073.27. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.11%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were PSU up by 3.31%, Bankex up by 2.11%, Realty up by 1.43%, Metal up by 1.42% and Power was up by 1.04%, while Telecom down by 1.75%, TECK down by 1.37%, IT down by 0.93%, Auto down by 0.73%, Consumer Discretionary was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 12.64%, Kotak Mahindra Bank up by 3.95%, ITC up by 3.37%, NTPC up by 2.68% and Dr. Reddys Lab was up by 2.44%. On the flip side, Bharti Airtel down by 2.45%, Mahindra & Mahindra down by 1.44%, TCS down by 1.23%, ICICI Bank down by 1.20% and Maruti Suzuki was down by 1.18% were the top losers.

Meanwhile, former finance secretary Subhash Chandra Garg has said that increase in the capital expenditure (capex) provisions for 2020-21 in the Budget is an ‘optical illusion’ and that for the next fiscal is ‘excessively optimistic and proforma’. He pointed out that Finance Minister Nirmala Sitharaman highlighted in her Budget speech a massive increase of 34.5 percent in the capital expenditure budget estimates of year 2021-22 (BE 21-22) to Rs 5.54 lakh crore from Rs 4.12 lakh crore in BE 20-21. The revised estimates (RE) of capital expenditure for FY 2020-21 have also gone up to Rs 4.39 lakh crore, recording an increase of 6.55 per cent.

According to Garg, a closer scrutiny of capital expenditure of Railways for 2020-21 reveals large revenue expenditure disguised as capital expenditure, which creates the optical illusion of higher capex in the fiscal. Elaborating on the point, he said capital expenditure under all the regular heads of Railways for 2020-21 has heavily under-performed during the year.

He also stated that capex for the new lines' construction has reduced from Rs 12,000 crore to only Rs 929 crore, for gauge conversion from Rs 2,250 crore to Rs 26 crore, for rolling stock from Rs 5,787 crore to Rs 2,004 crore, for track renewals from Rs 10,599 crore to nil and so on. However, he said the government from General Budget gave a 'Special Loan for Covid Related Resource Gap' of Rs 79,398 crore to Railways to provide liquidity support to railways to meet its losses in the current year and also for 'liquidating adverse balance in the public account' of Railways for the year 2019-20.

The CNX Nifty is currently trading at 14981.60, up by 85.95 points or 0.58% after trading in a range of 14864.75 and 15014.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were SBI up by 12.70%, Kotak Mahindra Bank up by 4.05%, Tata Steel up by 3.79%, ITC up by 3.46% and NTPC was up by 2.52%. On the flip side, Bharti Airtel down by 2.56%, Mahindra & Mahindra down by 1.43%, Wipro down by 1.42%, TCS down by 1.25% and ICICI Bank was down by 1.21% were the top losers.

All Asian markets were trading firm; Nikkei 225 surged 437.24 points or 1.54% to 28,779.19, Taiwan Weighted strengthened 96.18 points or 0.61% to 15,802.40, KOSPI rose 32.58 points or 1.06% to 3,120.13, Straits Times advanced 4.28 points or 0.15% to 2,909.86, Hang Seng increased 207.18 points or 0.71% to 29,320.68, Shanghai Composite gained 16.80 points or 0.48% to 3,518.66 and Jakarta Composite was up by 19.62 points or 0.32% to 6,126.84.