Key indices remain in green in morning deals

Indian equity benchmarks remained in green in morning deals led by gains in index majors Tata Steel, Infosys and Tech Mahindra amid a positive trend in global markets. Sentiments remained positive as Finance Minister Nirmala Sitharaman exhorted ministries to aim to achieve more than their capital expenditure (capex) targets for this fiscal, highlighting that enhanced spending will play a critical role in revitalising the economy post-pandemic. Some support also came as the Union Cabinet may soon clear a proposal to provide government guarantee to security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans. Indian Banks' Association (IBA), entrusted with the task of setting up a bad bank, has pegged the government guarantee to be around Rs 31,000 crore. Traders also took a note of minister for MSME and Road Transport and Highways Nitin Gadkari’s statement that the Manufacturing sector needs to be strengthened for employment generation and eradicate poverty.

On the global front, Asian markets were trading mostly in green after rising consumer confidence in economic recovery boosted the Nasdaq index to its highest-ever closing level. However, investors remained cautious as they braced for further updates amid a worsening domestic coronavirus situation.  Back home, on the sectoral front, banking stocks remained in limelight with a private report that helped by faster pace of credit growth, the share of Indian private banks in total credit rose to 36.5 per cent in the financial year ended March 2021 (FY21) from 35.4 per cent a year ago.

The BSE Sensex is currently trading at 52738.75, up by 189.09 points or 0.36% after trading in a range of 52630.91 and 52786.41. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Metal up by 1.34%, IT up by 1.09%, TECK up by 0.94%, Basic Materials up by 0.68% and Industrials up by 0.67%, while Utilities down by 0.94%, Power down by 0.94%, Realty down by 0.56%, Bankex down by 0.04%, Oil & Gas down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.31%, Infosys up by 1.29%, Tech Mahindra up by 1.06%, Reliance Industries up by 0.80% and TCS up by 0.78%. On the flip side, Power Grid Corp down by 0.89%, NTPC down by 0.72%, ICICI Bank down by 0.66%, Dr. Reddy's Lab down by 0.27% and Bajaj Finserv down by 0.25% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) K V Subramanian has said that a number of reforms undertaken by the government in the last one year especially focused on removing supply side frictions are expected to spur investment, including foreign investment. He also said the fact that India recorded the highest growth amidst pandemic when FDI has shrunk by about 50 percent for the emerging economies, indicates that foreign firms put their money where their mouth is.

Observing that FDI in merger & acquisition (M&A) versus greenfield that distinction is pertinent, Subramanian said, ‘the fact that the same M&A did not happen as much in other countries but happened in India actually thereby recording significant growth...is indicative of the India story.’ Stressing that India is the only country among large economies that has done a slew of reforms in the last one-and-a-half years, he said these are especially focused on removing a lot of supply side frictions paving way for investment to flow in.

CEA also stated that ‘the labour reform, the agricultural reform, the change in definition of MSME to avoid the phenomenon of dwarfism and most importantly, the enterprise policy focused on the private sector...this is where path of future FDI must be understood in the context of the enterprise policy focused on the private sector.’ 

The CNX Nifty is currently trading at 15805.50, up by 57.05 points or 0.36% after trading in a range of 15774.25 and 15815.05. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 1.75%, Tata Steel up by 1.47%, Infosys up by 1.29%, Hindalco up by 1.22% and Coal India up by 1.18%. On the flip side, Power Grid Corp down by 0.95%, Shree Cement down by 0.94%, NTPC down by 0.77%, ICICI Bank down by 0.57% and Hero MotoCorp down by 0.48% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 193.50 points or 1.1% to 17,791.69, Jakarta Composite soared 47.92 points or 0.81% to 5,996.97, Straits Times advanced 45.25 points or 1.46% to 3,134.74, Nikkei 225 surged 20.09 points or 0.07% to 28,832.70, KOSPI rose 16.85 points or 0.51% to 3,303.53 and Shanghai Composite gained 15.24 points or 0.43% to 3,588.42.

On the flip side, Hang Seng decreased 23.69 points or 0.08% to 28,970.41.