Domestic bourses maintain momentum

Domestic bourses continued to trade in fine contour on continued buying by funds and retail investors in afternoon session. Sentiments were upbeat as Reserve Bank of India (RBI) is likely to maintain the status quo at its next monetary policy review and wait for some more time before taking any action to spur growth. Adding more comfort, US Trade Representative Katherine Tai, after meeting Union Minister of Commerce and Industry Piyush Goyal, said India and the United States will look at ways to expand its trade relations and cooperate on pending bilateral issues. However, markets trimmed some of its gain amid concerns like surge in Covid cases, particularly in economically crucial Maharashtra and appreciation in US 10- year bond yield above 1.7%. Most of the sectoral indices were trading firm and Metal was the top gainer on BSE, up by over 2% followed by Utilities and Consumer Durables. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 0.50% each.

On the global front, Asian markets were trading mostly in green as investors remained focused on the global vaccination program and shook off worries about a hedge fund default that hit international banking stocks overnight. Back home, in scrip specific developments, Nazara Technologies lists with 79.02% premium on the BSE and Adani Transmission jumped on acquisition of Warora-Kurnool Transmission.

The BSE Sensex is currently trading at 49703.43, up by 694.93 points or 1.42% after trading in a range of 49331.68 and 49917.80. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.62%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Metal up by 2.27%, Utilities up by 2.00%, Consumer Durables up by 1.91%, Basic Materials up by 1.67% and Healthcare was up by 1.66%, while Realty down by 1.15% and Auto was down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.27%, Hindustan Unilever up by 3.21%, Power Grid up by 3.15%, Titan Company up by 2.98% and NTPC was up by 2.64%. On the flip side, Mahindra & Mahindra down by 1.99%, Bharti Airtel down by 0.57%, SBI down by 0.17%, Bajaj Finance down by 0.10% and Maruti Suzuki was down by 0.06% were the top losers.

Meanwhile, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel has urged the government to impose restrictions on exports of cotton yarn to curb prices and increase supply for domestic manufacturers. He said despite several efforts by the government to reduce the price of cotton yarn, it has consistently increased in the last four months and was affecting the entire value chain.

Sakthivel suggested that quantitative restrictions should be imposed on exports of cotton yarn, specifically on cotton yarn of 26 counts and above. This will result in a sharp decline in domestic yarn prices and an increase in value addition and employment in the country. This will also help in increasing garment exports. And, it will result in only normal profits accruing to yarn spinners, not the supernormal profit owing to the profiteering currently happening.

AEPC Chairman stated that the Cotton Corporation of India (CCI) has reduced the price of cotton for small mill owners but this did not result in a reduction of cotton yarn prices. The rate of increase in yarn prices far exceeds that of cotton prices. The steep increase in prices and unpredictability in the availability of yarn means that garment exporters cannot honor commitments they made to their customers. This has also affected handloom and power loom weavers badly.

The CNX Nifty is currently trading at 14743.20, up by 235.90 points or 1.63% after trading in a range of 14617.60 and 14783.00. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were UPL up by 5.86%, JSW Steel up by 4.41%, Tata Steel up by 4.02%, Hindustan Unilever up by 3.40% and Shree Cement was up by 3.40%. On the flip side, Mahindra & Mahindra down by 1.68%, Tata Motors down by 1.08%, Bharti Airtel down by 0.58%, SBI Life Insurance down by 0.32% and Maruti Suzuki was down by 0.02% were the top losers.

Asian markets were trading mostly higher, Taiwan Weighted strengthened 78.93 points or 0.48% to 16,554.90, Hang Seng increased 323.50 points or 1.14% to 28,661.80, Shanghai Composite gained 13.80 points or 0.4% to 3,449.10, KOSPI rose 33.96 points or 1.12% to 3,070.00, Nikkei 225 surged 48.18 points or 0.16% to 29,432.70 and Straits Times was up by 21.61 points or 0.68% to 3,197.18. On the other hand, Jakarta Composite was down by 94.47 points or 1.53% to 6,072.35.