Key indices continue to trade in green in morning deals

Indian equity indices continued to trade in green in Tuesday’s morning deals, led by gains in Metal, Consumer Durables, Utilities and IT stocks. Sentiments remained positive with RBI data showed bank credit grew by 6.02 per cent to Rs 108.69 lakh crore and deposits increased by 9.87 per cent to Rs 152.17 lakh crore in the fortnight ended May 7, 2021. Traders also took a note of report that a Reserve Bank of India (RBI) study has advocated a mix of fiscal and monetary policies to mitigate economic downturn, saying demand side channel needs to be complemented with a conducive monetary transmission mechanism from the supply side. However, gains remain capped as a British brokerage cut India's FY22 GDP growth estimate by a sharp 0.80 per cent to 9.2 per cent, saying the economic impact of the second wave of infections has been deeper than initially expected. On the sectoral front, jewellery industry’s stocks remained in focus as the Centre further extended the deadline for mandatory hallmarking of gold jewellery and artefacts by a fortnight till June 15 in view of the COVID-19 pandemic. On the global front, Asian markets were trading in green as inflation fears eased and investors regained an appetite for risk.

The BSE Sensex is currently trading at 50832.59, up by 180.69 points or 0.36% after trading in a range of 50766.74 and 50961.35. 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 0.59%, while Small cap index up by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 2.49%, Consumer Durables up by 1.54%, Utilities up by 1.43%, IT up by 1.31% and Basic Materials up by 1.27%, while Bankex down by 0.47% and Healthcare down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.96%, ONGC up by 2.61%, Titan Company up by 2.49%, Nestle up by 1.69% and Bajaj Finserv up by 1.65%. On the flip side, HDFC Bank down by 1.48%, Axis Bank down by 0.72%, Indusind Bank down by 0.50%, Kotak Mahindra Bank down by 0.23% and SBI down by 0.18% were the top losers.

Meanwhile, domestic ratings agency ICRA has forecasted a 2 percent Gross domestic product (GDP) growth in the fourth quarter of 2020-21 and a 7.3 percent contraction for the full fiscal year. From a GVA or gross value-added perspective, it pegs Q4 growth at 3 percent and the full year contraction at 6.3 percent. According the agency, the 2 percent projected GDP growth will help the economy avoid a double-dip recession as indicated by the National Statistical Office (NSO) for Q4. ICRA’s projection is better than the 8 percent contraction forecast by the NSO as it sees Q4 growth at only 1.1 percent.

As per to the report, the full-year GDP is not the average of the four quarters as the weight of GDP in each quarter is different because the output in each quarter varies. Typically, the fourth quarter each year has the highest weight in annual GDP, which is the value of all the goods and services produced in a given 12-month period in an economy. Adding up the four quarters growth/contraction in FY21, the full-year GDP contraction stands at 8.45 per cent. In Q1, the economy had shrunk by 23.9 per cent, which had improved to (-) 7.5 per cent in Q2, while it returned to the growth territory in Q3 with a marginal 0.40 per cent expansion.

The report expects the year-on-year GVA growth at 3 per cent in Q4 of FY21 up from 1 per cent in Q3, and GDP growth in the same quarter at 2 per cent, up from 0.4 per cent in Q3, suggesting the economy is on course to avoid double-dip recession as implied by the NSO.

The CNX Nifty is currently trading at 15261.70, up by 64.00 points or 0.42% after trading in a range of 15247.05 and 15293.85. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 4.04%, Asian Paints up by 3.02%, Tata Steel up by 2.77%, Titan Company up by 2.53% and ONGC up by 2.52%. On the flip side, HDFC Bank down by 1.70%, Axis Bank down by 0.96%, Indusind Bank down by 0.67%, Kotak Mahindra Bank down by 0.38% and SBI down by 0.30% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 151.83 points or 0.54% to 28,516.44, Taiwan Weighted strengthened 231.85 points or 1.42% to 16,570.14, Straits Times advanced 15.58 points or 0.5% to 3,139.19, Shanghai Composite gained 55.93 points or 1.6% to 3,553.21, Jakarta Composite soared 64.98 points or 1.13% to 5,828.61, KOSPI rose 19.77 points or 0.63% to 3,164.07 and Hang Seng increased 358.39 points or 1.26% to 28,770.65.