Benchmarks trade slightly higher in early deals

Indian equity benchmarks made flat-to-positive start on Thursday amid mixed global cues. Markets were trading near neutral lines with marginal gains in early deals on account of buying in Oil & Gas, PSU and Metal counters. However, selling in Telecom, Bankex and Auto stocks capped the up move. Sentiments got a boost as Global forecasting firm Oxford Economics revised India's economic growth projection for 2021 to 10.2 per cent from the earlier 8.8 per cent, citing receding COVID-19 risks and the shift in the monetary policy outlook. It further said the Budget 2021-22 will create positive externalities for the private sector, and forecast slower fiscal consolidation in FY22 than the government projections. Though, there was some cautiousness as the government issued new guidelines for international arrivals amid the spread of mutant variants of coronavirus in many countries. The new Standard Operating Procedures (SOPs) will come into effect from 23.59 hours on February 22 till further orders.

On the global front, Asian markets were trading mixed after Wall Street closed mostly lower overnight as largely upbeat economic data added to optimism about the economic recovery, but raised concerns about inflation. The Chinese market, which resumed trading after the Lunar New Year holidays, is notably higher.

Back home, pharma stocks were in focus as India Ratings and Research (Ind-Ra) does not expect Indian pharmaceutical companies to sustain the healthy operating margins reported during 3Q FY21 and 9M FY21. It said the India formulations business grew year-on-year (y-o-y) during 3Q FY21 and 9M FY21 while growth across other segments was lower both on quarter-on-quarter (q-o-q) and y-o-y basis. In scrip specific developments, GAIL India is trading higher as its share buyback will open on February 25 and close on March 10. On the other hand, Alembic Pharmaceuticals is trading under pressure as US FDA issued Form 483 with 5 observations to the company’s injectable facility at Karakhadi. US FDA had inspected the facility from January 28 to February 6.

The BSE Sensex is currently trading at 51757.50, up by 53.67 points or 0.10% after trading in a range of 51652.67 and 51903.96. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.84%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.28%, PSU up by 1.85%, Metal up by 1.59%, Utilities up by 1.37%, IT up by 1.18%, while Telecom down by 0.49%, Bankex down by 0.37%, Auto down by 0.23%, Capital Goods down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.72%, SBI up by 1.95%, Tech Mahindra up by 1.85%, Infosys up by 1.61% and Asian Paints up by 1.16%. On the flip side, ICICI Bank down by 1.52%, Kotak Mahindra Bank down by 1.13%, Mahindra & Mahindra down by 1.10%, Bajaj Finance down by 1.09% and Nestle down by 0.84% were the top losers.

Meanwhile, S&P Global Ratings in its latest report has said that India will be one of the fastest growing emerging market economies with a 10 percent growth in FY22, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden. It noted that the forecast for India in 2021 is on stronger side and shows that a lot of economic activity, which was frozen last year, is coming back on line to normalisation thereby brightening the growth prospects, as well as structural strengths of Indian economy coming back to the fore.

S&P said ‘India's contraction this year was steep and may be deeper than global average, but bounce back of 10% that we are expecting next fiscal year will be putting India amongst the fastest growers in 2021 and more importantly we see Indian economy growing at 6% over medium term, may be slightly higher, and that compares very well to EM all around the world.’

It further said India's economy has stabilised over recent months, with progressively better manufacturing, services, labour market, and revenue data. It also said the hard part will be converting these trends into a sustained recovery over the next few years. It added that India has exceeded its fiscal deficit target of 3.5 per cent in the current fiscal by a wide margin due to higher spendings to stimulate economy amid the pandemic.

The CNX Nifty is currently trading at 15225.85, up by 16.95 points or 0.11% after trading in a range of 15199.95 and 15250.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 5.17%, ONGC up by 3.52%, Hindalco up by 2.06%, SBI up by 2.03% and Tata Steel up by 1.69%. On the flip side, ICICI Bank down by 1.71%, Mahindra & Mahindra down by 1.36%, Kotak Mahindra Bank down by 1.27%, Bajaj Finance down by 1.23% and Titan Comapny down by 0.91% were the top losers.

Asian markets were trading mixed; Nikkei lost 33.83 points or 0.11% to 30,258.36, Straits Times fell 11.09 points or 0.38% to 2,909.34, Hang Seng slipped 404.91 points or 1.30% to 30,680.03 and KOSPI declined 33.25 points or 1.06% to 3,100.48. On the other hand, Taiwan Weighted added 72.22 points or 0.44% to 16,434.51, Jakarta Composite rose 34.65 points or 0.56% to 6,262.38 and Shanghai Composite was up by 14.33 points or 0.39% to 3,669.42.