Benchmarks trade in fine-fettle in early deals

Indian equity benchmarks made optimistic start on Monday, after last week’s crash, tracking rally in Asian peers. Markets are trading firm in early deals with gains of over one and half a percent each on the back of buying in all the sector indices except telecom. Investors cheered the domestic economy returning to growth in the October-December period after two quarters of contraction. India’s gross domestic product returned to growth -- of 0.4 per cent -- in October-December. The Ministry of Finance said this is a ‘reflection of further strengthening of V-shaped recovery’, which began in Q2 of 2020-21, especially after a large GDP contraction in Q1 due to the lockdown. Adding more optimism on the street, India Ratings and Research (Ind-Ra) upgraded its FY21 credit growth estimates to 6.9 per cent from 1.8 per cent, given the improved economic environment in 2H FY21 and the government's focus on higher -- spending especially on infrastructure. Investors are eyeing Markit Manufacturing PMI data scheduled to be out later in the day. Meanwhile, India's count of active cases has jumped to 170,293. On Sunday, the country registered 15,616 fresh Covid-19 cases, taking its the caseload tally to 11,112,056.

On the global front, Asian markets were trading higher as global bonds stabilized from last week's sharp losses and sliding crude oil prices. Investors are also refocusing on vaccine rollout and the stimulus-driven global economic recovery. Johnson & Johnson's single-shot COVID-19 vaccine received emergency use authorization from the FDA on Saturday. Meanwhile, markets in South Korea and Taiwan are closed.

Back home, Auto stocks were in focus reacting to their monthly sales numbers. Banking stocks were buzzing after the Reserve Bank of India's weekly statistical supplement showed Indian banks' loans rose 6.6% in the two weeks to February 12 from a year earlier, while deposits rose 11.8%. Outstanding loans fell Rs 10.44 billion ($141.30 million) to Rs 107.04 trillion in the two weeks to February 12. Most of the aviation stocks were trading in green as Minister of State for Civil Aviation Hardeep Singh Puri said the domestic air traffic is expected to be back to the full pre-COVID-19 level by the summer schedule with the traffic seeing a sharp recovery from the July quarter onwards after the resumption of the services post Unlock 1.0.

The BSE Sensex is currently trading at 49861.37, up by 761.38 points or 1.55% after trading in a range of 49485.00 and 49909.91. 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 1.01%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Auto up by 2.11%, PSU up by 1.96%, Consumer Durables up by 1.93%, Utilities up by 1.91%, Bankex up by 1.75%, while Telecom down by 1.44% was the sole losing index on BSE.

The top gainers on the Sensex were Power Grid up by 4.21%, ONGC up by 3.55%, Mahindra & Mahindra up by 3.46%, Tech Mahindra up by 3.45% and Ultratech Cement up by 3.01%. On the flip side, Bharti Airtel down by 2.20% was the sole loser.

Meanwhile, India Inc has said that the recouping of India’s Gross domestic product (GDP) to a positive trajectory by posting a growth of 0.4 percent in Q3 (October-December) of FY21 is a promising sign as it portends the end of the pandemic-induced recessionary phase seen in the first-half of the fiscal year. Industry bodies expressed confidence that the GDP will improve further in the coming months on the back of positive growth stimuli emanating from the Union Budget and initiatives like the Production Linked Incentive scheme unveiled by the government.

Chandrajit Banerjee, Director General, CII, has observed that one of highlights of the data is the positive momentum seen in investment demand as it grew by 2.6 percent in the third quarter after being in doldrums for several quarters now. This bears testimony to the unrelenting efforts of the government to go all-out to revive investments under the ambit of the various measures which formed a part of the Aatmanirbhar Bharat package.

Assocham Secretary General Deepak Sood has said the GDP growth of 0.4 percent for the third quarter of FY21 is no surprise, but it marks a significant turnaround into the Indian economy returning to a positive trajectory after sharp drops in the first two quarters, even as the war against COVID-19 is continuing. According to him, the last quarter of the current fiscal should be far better.

The CNX Nifty is currently trading at 14757.80, up by 228.65 points or 1.57% after trading in a range of 14638.85 and 14766.35. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 4.18%, ONGC up by 3.42%, Hero MotoCorp up by 3.35%, Tech Mahindra up by 3.34% and UPL up by 3.27%. On the flip side, Bharti Airtel down by 2.12% and Hindalco down by 0.51% were the only losers.

Asian markets were trading in green; Nikkei 225 surged 640.72 points or 2.21% to 29,606.73, Straits Times rose 25.91 points or 0.88% to 2,974.95, Hang Seng jumped 348.17 points or 1.20% to 29,328.38, Jakarta Composite soared 63.70 points or 1.02% to 6,305.50, and Shanghai Composite was up by 18.22 points or 0.52% to 3,527.30.