Markets maintain gaining momentum in late morning deals

Indian equity benchmarks maintained gaining momentum in late morning deals, with both Sensex and Nifty holding their strong gains. Positive cues from other Asian markets helped key indices to remain higher. Traders were positive, as the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22, to boost the economy grappling with the fresh COVID-19 wave. According to an office memorandum (OM) issued by the Finance Ministry, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget.

On the global front, Asian markets were trading mostly in green, even after Japan's services producer prices increased for the first time in six months in March. The Bank of Japan said that the services producer price index gained 0.7 percent annually after staying flat in February. This was the first growth since September 2020. On a monthly basis, the services PPI advanced 0.7 percent in March, faster than the 0.2 percent increase posted in February. Excluding international transportation, the services PPI climbed 0.6 percent on year following a nil growth a month ago. On month, prices rose by 0.7 percent.

The BSE Sensex is currently trading at 48524.08, up by 645.63 points or 1.35% after trading in a range of 48152.24 and 48667.98. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.86%, while Small cap index was up by 1.00%.

The top gaining sectoral indices on the BSE were Bankex up by 2.73%, Realty up by 2.53%, Basic Materials up by 1.77%, Metal up by 1.71% and Energy up by 1.69%, while Healthcare down by 0.13% was the only losing index on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.54%, Axis Bank up by 3.97%, Ultratech Cement up by 3.45%, SBI up by 2.87% and Bajaj Finance up by 2.16%. On the flip side, HCL Tech. down by 2.53%, NTPC down by 1.27%, Tech Mahindra down by 1.09% and Sun Pharma down by 0.65% were the top losers.

Meanwhile, the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22, to boost the economy grappling with the fresh COVID-19 wave. According to an office memorandum (OM) issued by the Finance Ministry, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget.

To enable ministries/departments expedite capital expenditure, it said the cash management guidelines issued by the Ministry of Finance under the OM of 2017 have been relaxed. It added ‘Monthly Expenditure Plan (MEP) or Quarterly Expenditure Plan (QEP) ceilings and restrictions on bulk expenditure items referred in the OM dated August 21, 2017, shall not be applicable for expenditure under the capital heads under the Budget. These relaxations shall take immediate effect and shall apply until further orders’.

According to the guidelines, the bulk expenditure items of more than Rs 2,000 crore were timed in the last month of each quarter to utilise the direct tax receipt inflows in June, September, December and March. Similarly, big releases of Rs 200 crore to Rs 2,000 crore were timed between the 21st and 25th of a month to take advantage of the GST inflows. These restrictions have been removed with the latest OM. Finance

Minister Nirmala Sitharaman in the Budget 2021-22 had announced a sharp increase in capital expenditure and provided Rs 5.54 lakh crore, which is 34.5 per cent more than the Budget Estimate (BE) of 2020-21. In the BE 2020-21, the government provided Rs 4.12 lakh crore for Capital Expenditure. It was revised upwards to 4.39 lakh crore.

The CNX Nifty is currently trading at 14519.25, up by 177.90 points or 1.24% after trading in a range of 14421.30 and 14557.50. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 5.51%, Axis Bank up by 3.90%, Ultratech Cement up by 3.31%, SBI up by 2.94% and Kotak Mahindra Bank up by 2.30%. On the flip side, Britannia down by 2.69%, HCL Tech. down by 2.59%, Cipla down by 1.94%, NTPC down by 1.46% and Tech Mahindra down by 0.95% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 gained 216.75 points or 0.75% to 29,237.38, Straits Times rose 4.64 points or 0.15% to 3,198.68, Hang Seng added 6.85 points or 0.02% to 29,085.60, Taiwan Weighted surged 219.09 points or 1.27% to 17,519.36, KOSPI jumped 22.62 points or 0.71% to 3,208.72 and Shanghai Composite was up by 6.51 points or 0.19% to 3,480.68. On the flip side, Jakarta Composite fell 36.16 points or 0.60% to 5,980.70.