Key gauges remain in green terrain in morning deals

Indian equity benchmarks continued to trade in green terrain in Thursday's morning deals amid firm global cues and ahead of the March quarter earnings, which is likely to be better than the previous quarter. Sentiments remained positive with Economic Affairs Secretary Tarun Bajaj’s statement that the government will borrow Rs 7.24 lakh crore, which is 60.06 percent of the gross issuances, in the first half of 2021-22 fiscal (H1FY22) to meet resources to perk up the economy hit by the coronavirus pandemic. According to the Budget 2021-22, the government's gross borrowing was estimated at Rs 12.05 lakh crore in the financial year beginning April 1. However, gains remain capped as the combined output of the eight core sector industries fell at the fastest pace in 6-months, contracting 4.6 per cent in February, from a year ago, confirming fears that a recovery in industrial growth would be slower than expected. Meanwhile, maintaining status quo on inflation targeting, the government has extended 4 percent retail inflation target for the Reserve Bank of India for the next five years. Under the current mechanism, the RBI has been mandated by the government to maintain retail inflation at 4 percent with a margin of 2 percent on either side.

On the global front, Asian markets were trading mostly in green, as traders are also optimistic on a stimulus-driven global economic recovery after US President Joe Biden announced a $2.25 trillion infrastructure investment plan. Back home, on the sectoral front, steel sector remained in focus as rating agency ICRA said domestic steel rates are likely to remain elevated on the back of favorable international price trends despite a possible moderation in demand in the near term.

The BSE Sensex is currently trading at 49739.41, up by 230.26 points or 0.47% after trading in a range of 49731.50 and 49942.84. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index up by 1.53%.

The top gaining sectoral indices on the BSE were Metal up by 2.56%, Basic Materials up by 1.52%, Power up by 1.38%, Utilities up by 1.28% and IT up by 1.14%, while Realty down by 0.18% was the lone losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.13%, HCL Technologies up by 2.07%, Bajaj Auto up by 1.79%, NTPC up by 1.55% and Bajaj Finance up by 1.52%. On the flip side, Nestle down by 0.74%, HDFC Bank down by 0.66%, Hindustan Unilever down by 0.36%, Mahindra & Mahindra down by 0.26% and Power Grid down by 0.07% were the top losers.

Meanwhile, Economic Affairs Secretary Tarun Bajaj has said that the government will borrow Rs 7.24 lakh crore, which is 60.06 percent of the gross issuances, in the first half of 2021-22 fiscal (H1FY22) to meet resources to perk up the economy hit by the coronavirus pandemic. According to the Budget 2021-22, the government's gross borrowing was estimated at Rs 12.05 lakh crore in the financial year beginning April 1.

Bajaj has stated that the government would issue 2-year, 5-year, 10-year, 14-year, 30-year, and 40-year securities. On the expected rate for the next financial year, he said the Reserve Bank of India (RBI) will take appropriate action to ensure that yields remain in reasonable limit. Gross borrowing includes repayments of past loans. Repayment for past loans in the next financial year has been pegged at Rs 2.80 lakh crore. The gross borrowing from the market for the next year would be around Rs 12 lakh crores.

He further said the fiscal deficit for the current fiscal would be around the Revised Estimate announced in the Budget. He said ‘fiscal deficit number in February may be low at 76 per cent but in March, we have pushed a lot of expenditure. So, it should be closer to the number mentioned in RE in the Budget.’ With regard to inclusion of government bonds in global indices, he said efforts are on and it should happen in FY22.

The CNX Nifty is currently trading at 14768.65, up by 77.95 points or 0.53% after trading in a range of 14760.80 and 14814.65. There were 42 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 4.55%, Hindalco up by 3.20%, Tata Steel up by 2.67%, Hero MotoCorp up by 2.11% and HCL Technologies up by 2.07%. On the flip side, HDFC Life Insurance down by 1.52%, Nestle down by 0.79%, Mahindra & Mahindra down by 0.70%, HDFC Bank down by 0.66% and Hindustan Unilever down by 0.29% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 190.67 points or 0.65% to 29,369.47, Taiwan Weighted strengthened 125.14 points or 0.76% to 16,556.27, Straits Times advanced 9.09 points or 0.29% to 3,174.43, Hang Seng increased 321.50 points or 1.13% to 28,699.85, KOSPI rose 21.82 points or 0.71% to 3,083.24 and Shanghai Composite gained 8.45 points or 0.25% to 3,450.36.

On the flip side, Jakarta Composite lost 13.57 points or 0.23% to 5,971.95.