Markets trade in fine-fettle in early deals; Sensex touches 53K mark

Indian equity benchmarks extended their previous session’s gains with positive start on Tuesday tracking firm global cues. markets are trading in fine-fettle with gains of around 0.80% each in early deals on account of buying in all the sector indices led by Power, Oil & Gas and Industrials. Sentiments got a boost with report that India reported 39,000 Covid cases, the lowest since March 18. The pace of vaccination also picked up, boosting expectations of a faster economic recovery. On Monday, India administered a record 8.1 million doses as the central government-led free for all vaccination drive kicked off. Some support also came in as the survey conducted by Ficci showed that with states easing lockdown curbs due to declining number of COVID-19 cases, there are immediate indications of improvement in economic activity as companies are hopeful of better performance in the next 6 to 12 months.

On the global front, most of the Asian markets were trading higher following the broadly positive cues from Wall Street overnight, with higher crude oil prices and bargain hunting also providing the boost. Back home, auto stocks were in focus as industry chamber FICCI said the recent changes in the FAME II scheme, including enhanced subsidies for electric two-wheelers, are expected to accelerate demand for electric vehicles in the two-wheelers, three-wheelers and bus segments. In scrip specific development, Muthoot Finance rose after it acquired a 54 percent stake in Paymatrix.

The BSE Sensex is currently trading at 53003.83, up by 429.37 points or 0.82% after trading in a range of 52800.82 and 53018.71. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.92%, while Small cap index was up by 1.38%.

The top gaining sectoral indices on the BSE were Power up by 1.65%, Oil & Gas up by 1.64%, Industrials up by 1.62%, Capital Goods up by 1.56%, Auto up by 1.48%, while there was no losers.

The top gainers on the Sensex were Maruti Suzuki up by 3.06%, Larsen & Toubro up by 1.62%, ICICI Bank up by 1.39%, TCS up by 1.30% and Axis Bank up by 1.20%. On the flip side, Nestle down by 0.33%, Dr. Reddy’s Lab down by 0.09% and NTPC down by 0.08% were the top losers.

Meanwhile, Icra has said public sector banks (PSBs), which reaped windfall treasury gains in FY21, are likely to see much lower gains in their bond portfolios in FY22 due to limited headroom for yields to decline further. It said public sector banks in India reported net profits in FY21 after five straight years of losses, supported by windfall treasury gains. PSBs booked profits of Rs 31,600 crore from this source compared to overall profit Before Tax (PBT) of Rs 45,900 crore in FY21.

They recorded higher gains on the back of higher Statutory Liquidity Ratio (SLR) holdings than private banks. Notably, the trading gains for public banks in FY21 exceeded the capital infusion of Rs 20,000 crore received from the Government of India (GoI). The onset of Covid-19 resulted in windfall gains for public banks with trading profits on their bond portfolios rising sharply after the steep cut in policy rates by the Reserve Bank of India (RBI) in March 2020.

It added with the rate cuts and abundant liquidity, the daily average for the benchmark 10-year Government securities declined from 6.42 per cent in Q4FY20 to six per cent in Q1FY21. They shed another 5.93 per cent in Q2FY21 and 5.9 per cent in Q3FY21 before rising to 6.06 per cent in Q4 FY21. The significant volatility in bond yields also provided banks with ample trading opportunities.

The CNX Nifty is currently trading at 15877.20, up by 130.70 points or 0.83% after trading in a range of 15812.45 and 15880.95. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.34%, Adani Ports & SEZ up by 3.21%, UPL up by 2.51%, ONGC up by 2.36% and Tata Motors up by 2.08%. On the flip side, Cipla down by 0.95%, HDFC Life Insurance down by 0.46%, Nestle down by 0.36%, Britannia Industries down by 0.19% and Dr. Reddy’s Lab down by 0.15% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 838.48 points or 2.99% to 28,849.41, Taiwan Weighted rose 96.66 points or 0.57% to 17,159.64, KOSPI added 22.11 points or 0.68% to 3,262.90, Jakarta Composite gained 84.96 points or 1.42% to 6,081.21 and Shanghai Composite was up by 27.57 points or 0.78% to 3,556.75. On the other hand, Straits Times fell 8.53 points or 0.27% to 3,109.34 and Hang Seng lost 0.99 points to 28,488.01.