Benchmarks trade in fine-fettle on firm global cues

Indian equity benchmarks made optimistic start on Friday with firm cues from global markets and falling oil prices. markets are trading in fine-fettle with gains of over 0.70% each in early deals, on account of buying in all the sector indices led by Realty, Consumer Durables and Auto. Sentiments got a boost with CARE Ratings’ report that Indian economy will grow in the range of 11-11.2 per cent in the coming financial year. It said the high Gross Domestic Product (GDP) growth in FY22 will be on the back of low base effect in FY21 and broad-based recovery across the economy. Adding more optimism, Reserve Bank of India (RBI) Governor Shaktikanta Das expressed confidence that the second wave of Covid infections will not derail India’s economic journey. Meanwhile, India has registered 59,069 fresh cases of Covid-19 in the past 24 hours (highest daily cases since October 18, 2020), taking to tally to 11,846,082, according to Worldometer.

On the global front, all the Asian markets were trading higher following the positive cues overnight from Wall Street on better-than expected labor market data, with jobless claims dropping to their lowest level since the early days of the pandemic. However, concerns about rising coronavirus cases and extended economic lockdowns in Europe continue to cap much of the upside momentum.

Back home, coal stocks were in focus amid report that the Centre has launched the second tranche of commercial coal auction after 19 mines were awarded in the first round in November 2020. In scrip specific development, Adani Enterprises gained after it incorporated a wholly-owned subsidiary called Kutch Copper. Rail Vikas Nigam rallied amid report that LIC has bought more than an 8.72 percent equity stake in the company via an open market transaction.

The BSE Sensex is currently trading at 48810.06, up by 369.94 points or 0.76% after trading in a range of 48772.30 and 49044.44. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.14%, while Small cap index was up by 1.08%.

The top gaining sectoral indices on the BSE were Realty up by 1.78%, Consumer Durables up by 1.61%, Auto up by 1.35%, Consumer discretionary up by 1.33%, Industrials up by 1.29%, while there was no loser.

The top gainers on the Sensex were Bajaj Finserv up by 2.86%, Mahindra & Mahindra up by 2.28%, NTPC up by 2.09%, Bajaj Auto up by 1.81% and Larsen & Toubro up by 1.78%. On the flip side, Power Grid down by 0.99%, TCS down by 0.44%, Sun Pharma down by 0.31%, Dr. Reddy’s Lab down by 0.27% and ONGC down by 0.15% were the top losers.

Meanwhile, CARE Ratings has said that Indian economy will grow in the range of 11-11.2 per cent in the next financial year (FY22). It stated the high Gross Domestic Product (GDP) growth in FY22 will be on the back of low base effect in FY21 and broad-based recovery across the economy. Further it added  Progress in tax collections will be critical factor in realising this growth as any downside risk to Gross Value Added (GVA) would impact taxes and, in turn, GDP growth.

It mentioned recovery is broad based across sectors but at varying speed as the services sector in particular still operates with significant restrictions which look unlikely to be fully eased through the first half of FY22. The recovery in the economy will also be aided by the vaccination drive which has been witnessed in the country and the sustained pace of vaccination and coverage of more age-groups is required to speed up the process. Although the second COVID-19 wave has raised the possibility of lockdown, the restrictions are expected to be less potent than those seen during FY21.

Besides, it estimated GVA to grow at 10.2 per cent in FY22 over (-) 6.5 per cent in FY21. This estimate is based on the normal monsoon assumption which will result in stable agricultural output. Any deviation here will change the overall estimate. As per its estimates, agriculture will grow at 3.5 per cent during FY22 on steady kharif and rabi harvests. Both industrial and services sectors will record 11.6 per cent growth. The industrial sector will witness buoyancy with mining, manufacturing and construction registering double-digit growth rates over negative growth in FY21. All three segments under services sector - trade, hotels, transport, storage, communication; financial, real estate and prof services; and public administration, defence and other - are expected to register double-digit growth.

The CNX Nifty is currently trading at 14435.60, up by 110.70 points or 0.77% after trading in a range of 14432.35 and 14507.35. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.93%, Hindalco up by 2.60%, Tata Motors up by 2.45%, NTPC up by 2.23% and GAIL India up by 2.15%. On the flip side, Power Grid down by 0.88%, TCS down by 0.42%, Cipla down by 0.39%, Reliance Industries down by 0.32% and ONGC down by 0.29% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 461.85 points or 1.61% to 29,191.73, Straits Times rose 12.90 points or 0.41% to 3,154.61, Hang Seng added 318.07 points or 1.14% to 28,217.68, Taiwan Weighted gained 222.10 points or 1.38% to 16,282.24, KOSPI advanced 25.04 points or 0.83% to 3,033.37, Jakarta Composite jumped 46.04 points or 0.75% to 6,168.92, and Shanghai Composite was up by 46.18 points or 1.37% to 3,409.77.