Benchmarks trade firm in early deals

Indian equity benchmarks made gap-up opening on Monday tracking strong global cues. Markets are trading firm in early deals, with gains of over a percent each, on the back of buying in all the sector indices led by Auto, Telecom and Consumer discretionary counters. Sentiments got a boost with Expenditure Secretary T V Somanathan’s statement that the government is confident of lowering the fiscal deficit to 4.5 per cent of GDP by 2025-26 fiscal, considering a nominal GDP growth of 10 per cent every year. Traders took note of report that foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 12,266 crore in the Indian market in the first five trading sessions of February, as positive sentiment post-Union Budget 2021 sparked a rally in investment. Meanwhile, India reported 11,673 fresh Covid-19 cases on Friday pushing the overall tally to 10,838,843, according to Worldometer. The death toll from the deadly infection jumped to 155,114.

On the global front, all the Asian markets were trading higher following the record closing highs on Wall Street Friday as data showing a modest rebound in US employment in the month of January boosted expectations for further U.S. stimulus. The continued rollout of vaccines and falling coronavirus infection rates in different part of the world also boosted sentiment. Meanwhile, the Ministry of Finance said Japan had a current account surplus of 1,165.6 billion yen in December, up 113.9 percent on year. Exports were up 0.3 percent on year to 6,561.5 billion yen after sinking 3.4 percent in November. Imports fell an annual 13.5 percent to 5,596.4 billion yen after dropping 13.6 percent in the previous month.

Back home, pharma stocks were in focus with report that India's exports of pharmaceutical products during April-December 2020-21 grew by 12.43 per cent to $17.57 billion. Minister of State for Commerce and Industry Hardeep Singh Puri said India's exports of pharmaceutical products have not declined and they are growing consistently. In scrip specific development, Aditya Birla Fashion and Balkrishna Industries both rose ahead of their earnings results. However, Shipping Corporation of India tumbled after the company reported a 55.4 percent year-on-year fall in consolidated profit for the quarter ended December 31.

The BSE Sensex is currently trading at 51273.83, up by 542.20 points or 1.07% after trading in a range of 51146.67 and 51409.36. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.18%, while Small cap index was up by 1.10%.

The top gaining sectoral indices on the BSE were Auto up by 2.72%, Telecom up by 1.74%, Consumer discretionary up by 1.74%, Realty up by 1.68%, Utilities up by 1.64%, while was no loser on BSE sectoral front.

The top gainers on the Sensex were Mahindra & Mahindra up by 9.43%, Axis Bank up by 2.72%, Indusind Bank up by 2.40%, ONGC up by 2.36% and ICICI Bank up by 2.33%. On the flip side, NTPC down by 0.25% was the sole losers.

Meanwhile, Expenditure Secretary T V Somanathan has said that the government is confident of lowering the fiscal deficit to 4.5 percent of GDP by 2025-26 fiscal, considering a nominal GDP growth of 10 percent every year.

India has exceeded its fiscal deficit target of 3.5 percent in the current fiscal by a wide margin due to higher spending to stimulate the economy amid the pandemic. As per the revised estimate, the fiscal deficit -- the excess of government expenditure over its revenues -- has been pegged at 9.5 percent of the gross domestic product (GDP) in the current fiscal ending March 31. For the next 2021-22 fiscal, the deficit has been pegged at 6.8 percent of GDP, which will be further lowered to 4.5 percent by the fiscal ending March 31, 2026.

Expenditure Secretary further said ‘the fiscal deficit target has been set keeping in mind the estimate of a 5-6 percent real GDP growth over next four years, while nominal GDP will be at least 44 percent higher than what it is today. Let us assume (real GDP) growth to be 5-6 per cent, and inflation at 4-5 per cent, we will get to 10 percent (nominal growth). Most likely we will get to 11 percent (nominal growth). So 44 percent growth in GDP denominator is almost certain. So on that GDP our deficit will be 4.5 percent. I think we are quite confident we will reach it.’

The CNX Nifty is currently trading at 15096.50, up by 172.25 points or 1.15% after trading in a range of 15041.05 and 15119.25. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 8.55%, GAIL India up by 4.56%, Adani Ports & SEZ up by 3.55%, Hindalco up by 3.45% and ICICI Bank up by 2.86%. On the flip side, Divis Lab down by 1.03%, Britannia Industries down by 0.85%, HCL Technologies down by 0.12%, Bajaj Auto down by 0.10% and UPL down by 0.06% were the top losers.

All the Asian markets were trading in green; Nikkei surged 551.57 points or 1.92% to 29,330.76, Straits Times added 16.74 points or 0.58% to 2,923.85, Hang Seng rose 198.00 points or 0.68% to 29,486.68, Taiwan Weighted jumped 96.18 points or 0.61% to 15,802.40, KOSPI gained 1.14 points or 0.04% to 3,121.77, Jakarta Composite expanded 51.65 points or 0.84% to 6,203.38 and Shanghai Composite was up by 37.05 points or 1.06% to 3,533.38.