Markets end significantly higher in extended trading session

Indian equity benchmarks ended significantly higher on Wednesday after trading hours were extended following a technical glitch at NSE. Markets made optimistic start, as traders took encouragement with a private report that India's GDP may turn positive at 1.3 percent in the third quarter of 2020-21, having witnessed contraction in the previous two quarters due to the coronavirus pandemic, as the number of cases is falling and public spending has started rising. Some support also came in as Agriculture Minister Narendra Singh Tomar said that the government's decision to increase the agriculture credit target to Rs 16.5 lakh crore for the next fiscal will help in easing the liquidity crunch of farmers.  However, trading has been halted on NSE due to a technical glitch as the live price quotes of spot Nifty and Bank Nifty indexes have stopped updating.

Post resumption of trade, benchmark indices shot up specularly in an unprecedented extended session due to short-covering ahead of F&O expiry, as private banks edged higher after Centre lifted the embargo on grant of government business to private banks, enabling banks to participate in all developmental activities. Finance Minister Nirmala Sitharaman said that Private banks can now be equal partners in development of the Indian economy, furthering the government's social sector initiatives and enhancing customer convenience. Traders also took some support with Union Minister Sadananda Gowda’s statement that the chemicals and petrochemicals sector has huge potential and can contribute significantly towards achieving the government's target of $5 trillion economy. He also said India has potential to become a global petrochemical hub & factors like high GDP growth, presence of skilled manpower, big domestic market makes India an attractive platform for investment in the sector. Traders took a note of Niti Aayog CEO Amitabh Kant’s statement that India now needs to get into cutting edge technology in order to boost its exports which will benefit sectors such as telecom, automobiles, battery storage devices, and solar energy, among others.

On the global front, Asian markets ended lower on Wednesday, as persistent worries over inflation and steep asset valuations offset signs that the U.S. Federal Reserve would continue its fiscal policy support. The Bank of Korea said business conditions in South Korea deteriorated slightly in February, with a Business Survey Index score of 82 - down from 85 in January. The outlook for the following month rose by 4 points to 85. European markets were trading higher, as revised data from Destatis showed the German economy grew more than initially estimated in the fourth quarter. Gross domestic product grew 0.3 percent sequentially in the fourth quarter instead of 0.1 percent estimated previously. However, this was much slower than the 8.5 percent rebound seen in the third quarter. On a yearly basis, the decline in GDP slowed to 3.7 percent from 4 percent.

Finally, the BSE Sensex rose 1030.28 points or 2.07% to 50,781.69, while the CNX Nifty was up by 274.20 points or 1.86% to 14,982.00.

The BSE Sensex touched high and low of 50,881.17 and 49,648.78, respectively and there were 24 stocks advancing against 6 stocks declining on the index.   

The broader indices were trading in green; the BSE Mid cap index rose 0.72%, while Small cap index was up by 1.09%.

The top gaining sectoral indices on the BSE were Bankex up by 3.40%, Capital Goods up by 1.84%, Energy up by 1.65%, Telecom up by 1.57%, Industrials up by 1.48% while, Utilities down by 0.22%, Power down by 0.17%, IT down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 5.23%, HDFC Bank up by 5.12%, ICICI Bank up by 4.10%, Bajaj Finance up by 3.15% and HDFC up by 3.06%. On the flip side, Power Grid down by 1.31%, Dr. Reddys Lab down by 1.06%, TCS down by 0.96%, Maruti Suzuki India down by 0.41% and NTPC down by 0.39% were the top losers.

Meanwhile, Niti Aayog CEO Amitabh Kant has said that India now needs to get into cutting edge technology in order to boost its exports which will benefit sectors such as telecom, automobiles, battery storage devices, and solar energy, among others. He also pointed out that reforms that have been implemented post the pandemic would go a long way in facilitating this process. He added that thanks to the reforms process in India, key indicators such as GDP, FDI and trade have risen sharply and India has become a favoured destination for global investment.

Kant, speaking at the launch event for CII's report ''Foreign Trade & Investment in India: Unlocking Key Opportunities through Strategic Reforms'', further said the country is at the cusp of a transformation. He also said that the report now highlights the measures that the government needs to take in order to make India more competitive in the global market.

The CII report presents a detailed analysis of the policies that affect India's openness with respect to international trade, including tariff and non-tariff barriers, and FDI, the statement said. Against the background of the policy changes, the study analyses the trends and patterns of imports and exports and FDI inflows as also identifies on-ground issues being faced by companies in India. It also highlighted the need to participate in preferential trade arrangements with key partners, alongside leveraging existing ones, for realising greater export and FDI and increasing India's integration into the regional and global value chains.

The CNX Nifty traded in a range of 15,008.80 and 14,723.05 and there were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 5.36%, Coal India up by 5.26%, Axis Bank up by 5.19%, ICICI Bank up by 3.85% and Bajaj Finance up by 3.37%. On the flip side, UPL down by 2.37%, Power Grid down by 1.48%, Dr. Reddys Lab down by 1.45%, JSW steel down by 1.32% and TCS down by 1.15%.

European markets were trading higher; UK’s FTSE 100 increased 8.37 points or 0.13% to 6,634.31, France’s CAC rose 7.55 points or 0.13% to 5,787.39 and Germany’s DAX was up by 91.61 points or 0.66% to 13,956.42.

Asian markets ended lower on Wednesday, despite signs that the US Federal Reserve would continue its fiscal policy support. Meanwhile, persistent concerns over inflation and steep asset valuations adding some pressure on market sentiments. Japanese shares ended sharply down as technology stocks succumbed to profit taking following a decline in the Nasdaq Composite index overnight. Hong Kong shares ended lower after the city’s government announced it would increase the stamp duty on stock trading in the global financial hub for the first time since 1993. Moreover, Chinese shares also declined as US President Joe Biden showed readiness to meddle the Canadian citizens’ evacuation from Beijing.