Markets trade higher in early deals ahead of RBI’s policy outcome

Indian equity markets are trading higher in early deals on Wednesday, after a cautious start, ahead of the Reserve Bank of India’s (RBI) monetary policy outcome later today. Reserve Bank of India (RBI) will present its first bi-monthly policy for 2021-22 on April 7, 2021. The announcements by RBI today will set the direction for monetary policy for the new financial year. Sentiments got boost on report that the International Monetary Fund (IMF) has raised its projection for India’s economic growth in the current financial year by one percentage point to 12.5 per cent. The forecast, published in the IMF’s World Economic Outlook, suggests India would again become the fastest-growing large economy in the world. In fact, India is the only country among major world economies that is projected to grow at a double-digit rate during FY22. China comes closest, with a forecast of 8.4 per cent economic expansion.On the global front, asian markets were trading mostly higher on Wednesday as more growth data was reported, including IMF’s revised forecast on global economic recovery. However, the US markets ended lower on Tuesday a day after notching all-time highs on signs of rapid economic recovery. Back home, cement stocks were keep buzzing as Icra said domestic cement demand is expected to be highest in the decade, estimated to surpass 340 million tonne in FY2022, driven by sustained rural housing demand and significant pick-up in infrastructure activity. On the supply side, the capacity addition is also expected to increase by 22-25 million tonne in FY2022

The BSE Sensex is currently trading at 49357.74, up by 156.35 points or 0.32% after trading in a range of 49093.90 and 49413.87. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index up by 0.78%.

The gaining sectoral indices on the BSE were Energy up by 1.43%, Metal up by 1.40%, Oil & Gas up by 1.37%, Realty up by 1.35% and Telecom up by 1.33%, while IT down by 0.22% was the losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.76%, Reliance Industries up by 1.63%, Bharti Airtel up by 1.53%, Power Grid up by 1.43% and Asian Paints up by 1.34%. On the flip side, TCS down by 0.53%, Tech Mahindra down by 0.48%, Sun Pharma down by 0.37%, HDFC Bank down by 0.35% and HDFC down by 0.33% were the top losers.

Meanwhile, rating agency Icra has said domestic cement demand is expected to be highest in the decade, estimated to surpass 340 million tonne in FY2022, driven by sustained rural housing demand and significant pick-up in infrastructure activity. On the supply side, the capacity addition is also expected to increase by 22-25 million tonne in FY2022.

It stated while the cement prices are expected to largely sustain at the recently increased levels supported by the improved demand, the higher input costs are likely to exert pressure on operating margins during the fiscal. Though this is likely to result in some moderation in debt coverage metrics, they are likely to remain at healthy levels.

Rajeshwar Burla, vice president and co-group head at Icra, said the sentiment in the rural areas is expected to be positive on the back of favourable kharif harvest, rise in rabi sowing, reasonably healthy reservoir levels in many regions during January - February 2021 compared to average storage of last 10 years (with an early rise in temperatures, the upcoming monsoon will be crucial), favourable trends in procurement combined with a modest MSP (minimum support price) hike. This is expected to generate a healthy increase in the cash flows for the farm sector.

The CNX Nifty is currently trading at 14742.95, up by 59.45 points or 0.40% after trading in a range of 14649.85 and 14757.20. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.44%, Adani Ports &Special up by 2.21%, Tata Steel up by 2.10%, Indian Oil Corp. up by 1.65% and Bharti Airtel up by 1.64%. On the flip side, Tata Consumer Produc down by 0.82%, TCS down by 0.64%, Kotak Mahindra Bank down by 0.44%, HDFC Bank down by 0.43% and Wipro down by 0.43% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 97.36 points or 0.33% to 29,793.99, Jakarta Composite rose 0.51 points or 0.01% to 6,003.28, Taiwan Weighted soared 22.62 points or 0.14% to 16,762.49 and KOSPI advanced 6.92 points or 0.22% to 3,134.00. However, Straits Times lost 1.27 points or 0.04% to 3,206.36, Hang Seng dropped 165.02 points or 0.57% to 28,773.72 and Shanghai Composite was down by 18.43 points or 0.53% to 3,464.54.