Benchmarks trade firm in early deals; Nifty reclaims 14,750 mark

Indian equity benchmarks made gap-up opening on Thursday, first trading day of fiscal year 2021-22 (FY22), tracking gains in global peers. Markets are trading firm in early deals with gains of around half a percent each on the back of buying in almost all the sector indices led by Metal, IT and TECK. Sentiments got a boost with Reserve Bank data showing that India's current account deficit narrowed to $1.7 billion or 0.2 per cent of the GDP in the December quarter as against $2.6 billion or 0.4 per cent of GDP in the year-ago period. Some support also came in as the foreign portfolio investors (FPI) have pumped in more than Rs 2.75 lakh crore ($37 billion) in the Indian equity market during FY2020-2021. This is the highest ever investment by foreign investors into Indian equities in the last two decades. Traders took note of report that the central government's fiscal deficit at the end of February worked out to be 76 per cent of the revised estimate, indicating that it is likely to remain within the projections made by Finance Minister Nirmala Sitharaman last month.

Traders overlooked report that the combined output of the eight core sector industries fell at the fastest pace in 6-months, contracting 4.6 percent in February, from a year ago, confirming fears that a recovery in industrial growth would be slower than expected. Meanwhile, India has recorded a massive surge in the number of Covid-19 cases. In the last 24 hours, the country registered 72,182 cases. On the global front, most of the Asian markets were trading higher as investors are largely upbeat about a stimulus-fuelled global economic recovery after US President Joe Biden announced a multi-trillion-dollar infrastructure investment plan. Back home, shares of auto companies were in focus as they are set to unveil their March sales figures today. In scrip specific development, Yes Bank gained as it enters the Nifty Next 50 index.

The BSE Sensex is currently trading at 49754.09, up by 244.94 points or 0.49% after trading in a range of 49743.04 and 49942.84. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.68%, while Small cap index was up by 1.14%.

The top gaining sectoral indices on the BSE were Metal up by 1.54%, IT up by 1.34%, TECK up by 1.16%, Power up by 1.05%, Capital Goods up by 0.99%, while Realty down by 0.73% was the sole losing index on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.60%, Bajaj Auto up by 1.94%, Titan Company up by 1.80%, NTPC up by 1.69% and Indusind Bank up by 1.59%. On the flip side, Nestle down by 0.63%, HDFC Bank down by 0.48%, Power Grid down by 0.30%, ITC down by 0.27% and Axis Bank down by 0.21% were the top losers.

Meanwhile, the Finance Ministry has notified that the government would infusion Rs 14,500 crore through recapitalisation bonds in four public sector banks. The government will infusion Rs 14,500 crore into Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank by issuing non-interest bearing bonds to them despite reservations raised by the Reserve Bank of India (RBI) over the use of this instrument. Central Bank of India will receive highest capital infusion of Rs 4,800 crore, followed by Rs 4,100 crore by Indian Overseas Bank. Similarly, government will infuse Rs 3,000 crore in Bank of India and Rs 2,600 crore in UCO Bank.

The recapitalisation bonds would be issued with six different maturities and would be at par for the amount, in line with the application made by the eligible banks. The special securities would be repayable at par on the date of maturity. No interest would be payable on issue of these securities. This is a shift from the past when the government issued interest-bearing bonds to public sector banks.

To save the interest burden on recapitalisation bonds, the government last year decided to issue zero-coupon bonds for capital infusion of Rs 5,500 crore into Punjab and Sind Bank. The RBI had then flagged concerns over the calculation of an effective capital infusion made into the bank through this instrument issued at par.

The CNX Nifty is currently trading at 14774.95, up by 84.25 points or 0.57% after trading in a range of 14760.80 and 14814.65. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 3.04%, HCL Technologies up by 2.86%, Hero MotoCorp up by 1.87%, Bajaj Auto up by 1.78% and Hindalco up by 1.74%. On the flip side, HDFC Life Insurance down by 1.12%, IOC down by 0.54%, UPL down by 0.51%, HDFC Bank down by 0.40% and Nestle down by 0.38% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 191.35 points or 0.66% to 29,370.15, Straits Times gained 9.07 points or 0.29% to 3,174.41, Hang Seng jumped 294.46 points or 1.04% to 28,672.81, Taiwan Weighted soared 97.00 points or 0.59% to 16,528.13, KOSPI advanced 17.91 points or 0.59% to 3,079.33, and Shanghai Composite was down by 8.45 points or 0.25% to 3,450.36, while Jakarta Composite fell 9.65 points or 0.16% to 5,975.87.