Key indices remain in green in morning deals

Indian equity benchmarks continued to trade in green in morning deals, tracking gains in index majors Bajaj Finance, Tata Steel and SBI amid a positive trend in global markets. Sentiments remained positive with Minister of State for Finance Bhagwat K Karad’s statement that non-performing assets (NPAs) or bad loans of banks have declined by Rs 61,180 crore to Rs 8.34 lakh crore at the end of March 31, 2021, as result of various steps taken by the government. Some support also came as Care Ratings in its latest report has said that India’s gross domestic product (GDP) growth is likely to be 8.8 to 9 percent in the current financial year (FY22), driven by agriculture and industry sectors. However, gains remain capped as some concern came with private report stated that business resumption activities, which had been gathering pace after the end of the second wave, moderated for the week ended July 25. It said resumption Index declined to 95.3 from the previous week's high of 96.4, stressing that it continues to be above the pre-second wave levels.

On the global front, Asian markets were trading mostly in green with traders keeping at least half an eye on the United States where major companies report earnings and the Federal Reserve meets on policy this week. Back home, on the sectoral front, Auto component industry’s stocks remained in action as rating agency Icra said Indian auto component industry is expected to post 20-23 per cent revenue growth in the current fiscal aided by strong exports and recovery in the domestic market. The growth would however be on the low base of the last two fiscals and will look optically strong because of the exceptionally weak first half of the financial year 2020-21.

The BSE Sensex is currently trading at 52982.82, up by 130.55 points or 0.25% after trading in a range of 52880.58 and 53024.70. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 1.05%. 

The top gaining sectoral indices on the BSE were Metal up by 2.15%, Realty up by 1.47%, Basic Materials up by 1.14%, Consumer Durables up by 0.87% and Consumer Discretionary up by 0.77%, while TECK down by 0.15%, Healthcare down by 0.07%, IT down by 0.06% and Power down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.48%, Tata Steel up by 2.34%, SBI up by 1.85%, Bajaj Finserv up by 1.41% and Indusind Bank up by 1.10%. On the flip side, Dr. Reddy's Lab down by 1.04%, Sun Pharma down by 0.85%, Axis Bank down by 0.81%, HCL Tech. down by 0.76% and Hindustan Unilever down by 0.59% were the top losers.

Meanwhile, Care Ratings in its latest report has said that India’s gross domestic product (GDP) growth is likely to be 8.8 to 9 percent in the current financial year (FY22), driven by agriculture and industry sectors. The country's economy had contracted by 7.3 per cent in fiscal 2020-21. It said the outlook for the Indian economy on almost all counts in FY22 would look seemingly better than FY21 on account of the negative base effect.

According to the report, services sector will not be able to reach its potential even at 8.2 per cent growth as the second lockdown has affected sectors like hotels and restaurants, tourism, retail malls and entertainment in particular. While a lot has been done on the supply side by both the RBI and the government, the malaise is on the demand side which has been a problem even before the pandemic. It said a critical factor this time will be the spending pattern of the rural households and added that the monsoon forecast is good and ideally a stable Kharif harvest should bode well for rural incomes.

The report also said the fiscal deficit for FY22 is projected between Rs 17.38 lakh crore to Rs 17.68 lakh crore. For a nominal GDP of Rs 222.9 lakh crore, it said the increase in quantum of fiscal deficit would potentially push up the fiscal deficit ratio to 7.8-7.9 per cent of GDP. It also said the cost of services has increased across all components, which combined with the fuel-led impact would keep CPI (consumer price index-based inflation) elevated at around 6 per cent by March-end.

The CNX Nifty is currently trading at 15873.10, up by 48.65 points or 0.31% after trading in a range of 15845.00 and 15881.55. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.49%, Bajaj Finance up by 2.44%, Tata Steel up by 2.37%, SBI up by 1.93% and JSW Steel up by 1.77%. On the flip side, Sun Pharma down by 0.88%, Dr. Reddy's Lab down by 0.85%, Axis Bank down by 0.83%, HCL Tech. down by 0.77% and Cipla down by 0.69% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 145.03 points or 0.52% to 27,978.32, KOSPI rose 20.21 points or 0.63% to 3,245.16, Straits Times advanced 15.77 points or 0.5% to 3,154.74 and Shanghai Composite gained 4.96 points or 0.14% to 3,472.40.

On the flip side, Jakarta Composite lost 0.40 points or 0.01% to 6,105.99, Taiwan Weighted dropped 82.18 points or 0.47% to 17,321.38 and Hang Seng decreased 269.49 points or 1.03% to 25,922.83.