Bulls hold tight grip over Dalal Street

Bulls were holding tight grip over the Dalal Street in late morning deals, with both Sensex and Nifty trading on a strong note. Positive cues from other Asian markets helped key indices to hold their strong gains. Domestic sentiments were positive, after Finance Minister Nirmala Sitharaman said the government will work with the Reserve Bank for execution of the bank privatisation plan announced in the budget. She also said that the government has no plan to form any bank investment company to house the government stakes in banks.

On the global front, Asian markets were trading mostly in green, even after a measure of the public assessment of the Japanese economy decreased for the third month in a row in January. The survey data from the Cabinet Office showed that the current conditions index of the Economy Watchers' Survey, which measures the current situation of the economy, decreased to 31.2 in January from 34.3 in December. However, a reading below 50 suggests pessimism.

The BSE Sensex is currently trading at 51352.68, up by 621.05 points or 1.22% after trading in a range of 51146.67 and 51472.68. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.25%, while Small cap index was up by 1.58%.

The top gaining sectoral indices on the BSE were Telecom up by 2.70%, Auto up by 2.34%, Industrials up by 2.20%, Consumer Durables up by 1.95% and Capital Goods up by 1.87%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 7.26%, Axis Bank up by 3.09%, Bharti Airtel up by 3.05%, Titan Co up by 2.41% and ONGC up by 2.41%. On the flip side, Kotak Mahindra Bank down by 0.48%, Bajaj Auto down by 0.23% and Hindustan Unilever down by 0.21% were the top losers.

Meanwhile, the rating agency ICRA said that the reduction of duty on steel products, as proposed in the Budget 2021-22, may bring down prices of the metal by up to 10 per cent in the near term. In her Budget Speech, Finance Minister Nirmala Sitharaman had announced reducing the duty to 7.5 per cent on products like primary/semi-finished products of non-alloy steel, long products of non-alloy, stainless and alloy steel. The 2.5 per cent duty on iron and steel melting scrap, including stainless steel scrap, and raw materials used in the manufacture of CRGO (cold-rolled grain oriented) steel has been lowered to nil in the Budget.

As per the report, duty cut could bring down domestic steel prices by up to 10 per cent in the near term. The ratings agency said domestic hot-rolled coil (HRC) prices witnessed a steep rise of about 54 per cent during July-December 2020 from the level of Rs 36,250 a tonne at the end of June, on the back of a strong recovery in the domestic demand. It added that the prices increased further in January 2021 to touch a record of Rs 58,000 per tonne and are currently trading at Rs 56,000 per tonne.

The ratings agency noted  that ‘the government, as part of the Union Budget 2021-22, announced a reduction in customs duty on flat steel products to protect the interests of the end-user industries of steel from such elevated steel prices’. ICRA believes that the duty reduction on steel products would make their imports more competitive and, in turn, exert near-term pricing pressures on domestic steelmakers.

The CNX Nifty is currently trading at 15118.60, up by 194.35 points or 1.30% after trading in a range of 15041.05 and 15133.00. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 6.91%, Hindalco up by 4.35%, GAIL India up by 3.82%, Bharti Airtel up by 3.24% and Axis Bank up by 3.18%. On the flip side, Britannia down by 1.19%, Divis Lab down by 1.12%, Kotak Mahindra Bank down by 0.29%, Bajaj Auto down by 0.22% and Hindustan Unilever down by 0.20% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 540.25 points or 1.88% to 29,319.44, Hang Seng increased 192.03 points or 0.66% to 29,480.71, Jakarta Composite soared 59.18 points or 0.96% to 6,210.91, Straits Times advanced 17.39 points or 0.6% to 2,924.50 and Shanghai Composite gained 37.05 points or 1.06% to 3,533.38. On the flip side, KOSPI fell 12.34 points or 0.4% to 3,108.29.