Benchmarks trade firm in early deals amid better-than-expected macro-economic data

Indian equity benchmarks extended their previous session’s gains with positive opening following mostly positive cues from Asian peers. Markets are trading firm in early deals on account of buying in Energy, Oil & Gas and Capital Goods which are higher over a percent. Better-than-expected GDP numbers supported the market sentiments. Amid the coronavirus pandemic, India's GDP grew at 1.6% in the January-March quarter of the fiscal year 2020-21, higher than the street forecast, but witnessed a contraction of 7.3% for the entire fiscal year. Even then, the figure beat the CSO's estimate of 8% contraction. Adding more optimism, Chief Economic Adviser K V Subramanian said the overall impact of the second wave of Covid-19 on the country's economy is not likely to be large but cautioned about an uncertainty surrounding the pandemic going ahead. Besides, the output of eight core sectors jumped by 56.1% mainly due to low base effect and uptick in production of natural gas, refinery products, steel, cement and electricity. Though, traders largely overlooked report that the OECD cut its growth projection for India for FY22 to 9.9% from 12.6% estimated in March, as the second wave of coronavirus infections has paused economic recovery in Asia's third largest economy.

Most of the Asian markets were trading higher despite the absence of fresh cues from Wall Street, which was closed overnight for a holiday. The coronavirus infection rate in the region is keeping the underlying mood cautious as it is bound to impact the pace of global economic recovery from the pandemic. Back home, auto stocks were in focus reacting to their monthly sales figures. In scrip specific development, Cipla traded higher as it is in the process of seeking clarity and guidance from the government for exploring the possible roadmap for vaccine importation to India and no definitive terms have been finalised at this stage.

The BSE Sensex is currently trading at 52198.22, up by 260.78 points or 0.50% after trading in a range of 51975.67 and 52228.65. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Energy up by 1.68%, Oil & Gas up by 1.36%, Capital Goods up by 1.12%, PSU up by 1.05%, Consumer Durables up by 0.96%, while Metal down by 0.84%, Basic Materials down by 0.25%, IT down by 0.16%, TECK down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.72%, ONGC up by 2.55%, Reliance Industries up by 1.77%, HDFC up by 1.76% and SBI up by 1.59%. On the flip side, Ultratech Cement down by 0.87%, Asian Paints down by 0.54%, TCS down by 0.51%, ICICI Bank down by 0.39% and Nestle down by 0.38% were the top losers.

Meanwhile, Chief economic advisor (CEA) K V Subramanian has said the overall impact of the second wave of Covid-19 on the country's economy is not likely to be large but cautioned about uncertainty surrounding the pandemic going ahead. Further, he said that given the circumstances due to the pandemic, it is difficult to forecast if the country would achieve a double digit growth in the current fiscal.

He noted it would be difficult to predict exact growth number that the country may achieve as the path for pandemic still remains uncertain. He stated fiscal and monetary support will be important for the economy. Observing that there is a need to enhance the pace of vaccination, Subramanian said it would help in lowering the likelihood of another Covid-19 wave.

On inflation, he said it is expected to be range-bound and should not exceed the prescribed level. He further remarked that food grains production is projected to be at record levels this fiscal amid expectation of a normal monsoon.

The CNX Nifty is currently trading at 15651.00, up by 68.20 points or 0.44% after trading in a range of 15588.65 and 15660.75. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.62%, ONGC up by 2.29%, HDFC up by 2.03%, SBI up by 1.66% and Reliance Industries up by 1.53%. On the flip side, Tata Steel down by 1.55%, JSW Steel down by 1.34%, Ultratech Cement down by 0.79%, Asian Paints down by 0.53% and TCS down by 0.53% were the top losers.

Asian markets were trading mostly in green; Straits Times rose 3.45 points or 0.11% to 3,167.73, Hang Seng surged 133.25 points or 0.46% to 29,285.05, Taiwan Weighted gained 43.03 points or 0.25% to 17,111.46 and KOSPI added 15.46 points or 0.48% to 3,219.38. On the other hand, Nikkei 225 slipped 114.59 points or 0.40% to 28,745.49 and Shanghai Composite was down by 4.15 points or 0.11% to 3,611.33.