Post Session: Quick Review

Indian equity benchmarks ended higher on Wednesday. After a cautious start, markets remained higher for the whole trading session, amid 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.

In late morning deals, key indices added more gains, after the Reserve Bank of India (RBI) has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. Meanwhile, Central Board of Direct Taxes (CBDT) chairman PC Mody said that the Centre’s tax resolution scheme Vivad Se Vishwas has resolved nearly a third of all direct tax disputes and has netted Rs 54,005 crore in tax revenue, 51% of which are from the central PSUs.

Firm trade continued over the Dalal Street in the second half of the trading session, even after India's services sector activities eased in March as growth was hit by the detrimental impact of the coronavirus pandemic and input costs remained elevated. The seasonally-adjusted India Services Business Activity Index fell from 55.3 in February to 54.6 in March. Though the rates of expansion softened, it indicated growth for the sixth consecutive month. In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction.

On the global front, European markets were trading higher with shares of Royal Dutch Shell climbing after a trading update, and banks also higher. U.S. stock futures were slightly higher. Asian markets finished mostly in green on Wednesday, after the private sector in Singapore continued to expand in March, albeit at a slower pace, the latest survey from Markit Economics showed on Tuesday with a PMI score of 53.5. Individually, output and new order volumes increased for the fourth straight month, while there was stronger growth in staffing levels. Input price inflation softened in March but remained historically elevated.

The BSE Sensex ended at 49661.76, up by 460.37 points or 0.94% after trading in a range of 49093.90 and 49900.13. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.82%, while Small cap index was up by 1.30%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 1.69%, Telecom up by 1.57%, Bankex up by 1.57%, Metal up by 1.52% and Consumer Disc up by 1.36%, while Power down by 0.22% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.25%, Mahindra & Mahindra up by 2.11%, ICICI Bank up by 2.05%, Nestle up by 2.02% and Indusind Bank up by 2.02%. On the flip side, Titan Co down by 0.78%, NTPC down by 0.47%, Bajaj Finserv down by 0.21% and Hindustan Unilever down by 0.14% were the top losers. (Provisional)

Meanwhile, the growth of India’s service sector eased in the month of March but it remains above the boom-or-bust line of 50 that separates expansion from contraction, on the back of increases in new business and output at Indian services firms, as companies benefited from strong demand conditions and the elections.

As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 54.6 in March from 55.3 in February. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also eased to 56.0 in March from 57.3 in February. The report further said that new orders rose in March, stretching the current sequence of expansion to six months. Although easing from February, the pace of increase was solid and surpassed the long-run series average. The upturn was associated with the elections, higher demand and successful marketing.

Services companies reported higher expenses in March. The rate of input cost inflation was sharp and outpaced its long-run average, despite slowing from February's eight-year high. A few firms lifted their selling prices amid efforts to protect margins given ongoing increases in input costs. At the same time, the vast majority of companies left their fees unchanged due to competitive pressures. As a result, there was only a fractional rise in average output charges.

The CNX Nifty ended at 14819.05, up by 135.55 points or 0.92% after trading in a range of 14649.85 and 14879.80. There were 44 stocks advancing against 6 stocks declining on the index. (Provisional)

The top gainers on Nifty were JSW Steel up by 4.62%, Wipro up by 2.54%, SBI Life Insurance up by 2.33%, SBI up by 2.28% and Britannia up by 2.09%. On the flip side, Adani Ports & SEZ down by 2.49%, Tata Consumer Products down by 1.30%, UPL down by 1.04%, Titan Co down by 0.75% and NTPC down by 0.57% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 53.58 points or 0.79% to 6,877.13, France’s CAC increased 15.26 points or 0.25% to 6,146.60 and Germany’s DAX was up by 10.67 points or 0.07% to 15,223.35.

Asian markets finished mostly in green on Wednesday, whetted by the upbeat forecast report for this year by International Monetary Fund projecting a 6% growth from its earlier estimate of 5.5%, strongest global expansion in four decades, pointing additional fiscal measures by advanced economies and the rollout of vaccines. However, stock markets in China and Hong Kong drifted lower citing concerns over policy tightening. Global investors also awaited for more cues on interest rates ahead to the release of the minutes of the Federal Reserve's latest monetary policy meeting later in the day.