Key indices remain in green in morning deals

Indian equity benchmarks continued to trade in green terrain in morning deals amid favourable cues from their Asian peers. Sentiments remained positive with the Department of Economic Affairs (DEA) in its monthly report stating that the economic impact of the second wave COVID-19 is likely to be restricted to the first quarter of 2022. As per the DEA, rapid vaccination of India's population and the frontloading of the fiscal measures are the key to invigorating investment and consumption. Some support also came with Finance Ministry report that faster vaccine coverage and frontloading of fiscal measures announced in this year's budget would be the major factors in boosting the investment and consumption cycles and, in turn, reviving the economy, as economic activities have slowed down amid the second wave of Covid-19 and lockdowns across states. Buying in Bajaj Finance, Tech Mahindra, Hindustan Unilever and SBI lifted indices, but selling in ITC, Bajaj Auto and Asian Paints kept the upside limited. Meanwhile, the Finance Ministry said it has released third monthly instalment of revenue deficit grant of Rs 9,871 crore to 17 states. With the release of this instalment, total Rs 29,613 crore has been released in the first three months of the current financial year as Post Devolution Revenue Deficit (PDRD) Grant to states.

On the global front, Asian markets were trading higher as investors await U.S. inflation data, the ECB's policy meeting and a Group of Seven summit for directional cues. Back home, on the sectoral front, sugar stocks were buzzing as Crisil Rating report said the profitability of integrated sugar mills is likely to go up by 75-100 basis points (bps) this financial year due to high exports for the second consecutive season and increased supplies of ethanol for blending with petrol.

The BSE Sensex is currently trading at 52167.67, up by 226.03 points or 0.44% after trading in a range of 51957.92 and 52176.23. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.85%, while Small cap index was up by 1.54%.

The top gaining sectoral indices on the BSE were Metal up by 1.42%, Healthcare up by 1.35%, Basic Materials up by 1.18%, Telecom up by 1.15% and Realty up by 1.14%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.46%, Tech Mahindra up by 1.60%, Hindustan Unilever up by 1.40%, SBI up by 1.22% and Bharti Airtel up by 1.10%. On the flip side, ITC down by 0.97%, Bajaj Auto down by 0.92%, Asian Paints down by 0.46%, Maruti Suzuki down by 0.32% and Ultratech Cement down by 0.18% were the top losers.

Meanwhile, the Department of Economic Affairs (DEA) in its monthly report has said that the economic impact of the second wave COVID-19 is likely to be restricted to the first quarter of 2022. As per the DEA, rapid vaccination of India's population and the frontloading of the fiscal measures are the key to invigorating investment and consumption.

According to the report, capital expenditure had risen to 66.5 percent YoY in April 2021. High-frequency indicators started to pick up in May 2021. E-way bills witnessed an uptick in the second half of May this year. On agriculture, it said that the sector continues to offer prospects.  There was a slackening in eight core industrial output, PMI manufacturing, highlight toll collections, and Goods and Services Tax (GST). Construction rebounded to grow at 14.5 percent in Q4. As economic activity resumed following gradual unlocking and policy support, private consumption grew at 2.7 percent after falling for three consecutive quarters, it noted.

On the coronavirus pandemic, the DEA has noted that the spread of COVID-19 has been rapid in rural areas.  As per its report, the share of rural districts in new cases rose at a fast pace. This is shown by how cases rose from 49.7 percent in April of this year to 57.9 percent in May. With state-level lockdown restrictions being more adaptive to learnings from the first wave, manufacturing and construction are expected to experience a softer economic shock in the current quarter. It added that the pace and coverage of vaccination is critical to help India heal and regain the momentum of economic recovery.

The CNX Nifty is currently trading at 15715.65, up by 80.30 points or 0.51% after trading in a range of 15648.50 and 15718.60. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Divis Lab up by 2.58%, Bajaj Finance up by 2.54%, Shree Cement up by 2.15%, JSW Steel up by 1.94% and Tech Mahindra up by 1.57%. On the flip side, ITC down by 1.06%, Bajaj Auto down by 0.98%, Eicher Motors down by 0.61%, Asian Paints down by 0.41% and Hero MotoCorp down by 0.28% were the top losers.

Asian markets were trading higher; KOSPI rose 12.85 points or 0.4% to 3,229.03, Straits Times advanced 13.86 points or 0.44% to 3,167.33, Taiwan Weighted strengthened 168.43 points or 0.99% to 17,134.65, Shanghai Composite gained 30.78 points or 0.86% to 3,622.18, Nikkei 225 surged 89.33 points or 0.31% to 28,950.13, Jakarta Composite soared 48.92 points or 0.81% to 6,096.40 and Hang Seng increased 91.71 points or 0.32% to 28,834.34.