Bulls hold tight grip over Dalal Street

Bulls were holding a tight grip over the Dalal Street in late morning session, with both Sensex and Nifty holding strong gains. Positive cues from other Asian markets helped key indices to remain higher. Traders remained positive, as Niti Aayog Vice-Chairman Rajiv Kumar has said a strong economic growth rebound is expected on the back of rapid vaccinations, a recovering monsoon boosting agricultural output, thrust on infrastructure investments by the government, and growth in export, which have performed remarkably during April June registering a growth of 18 per cent over the same period in the pre-pandemic year of 2019-20.

Some relief also came after India Ratings and Research in its latest report stated that it expects the aggregate fiscal deficit of states in the country to moderate to 4.1 per cent of GDP in the current financial year from its earlier expectation of 4.3 per cent. In line with the slight moderation in its forecast for fiscal deficit in FY22, the agency expects the aggregate debt/GDP ratio to come in lower at 32.4 per cent in FY22 as against the previous estimate of 34 per cent.

On the global front, Asian markets were trading in green, after Japan's retail sales grew for the fifth straight month in July. The data published by the Ministry of Economy, Trade and Industry showed that retail sales grew 2.4 percent year-on-year in July, faster than the 0.1 percent increase seen in June. On a monthly basis, retail sales were up 1.1 percent in July, data showed.

The BSE Sensex is currently trading at 56626.76, up by 502.04 points or 0.89% after trading in a range of 56309.86 and 56734.29. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.39%, while Small cap index was up by 1.48%.

The top gaining sectoral indices on the BSE were Metal up by 2.33%, Basic Materials up by 1.91%, Power up by 1.88%, Utilities up by 1.82% and Consumer Durables up by 1.58%, while IT down by 0.04% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.40%, Bajaj Finance up by 2.68%, Maruti Suzuki up by 2.00%, Titan Co up by 1.95% and Mahindra & Mahindra up by 1.90%. On the flip side, Tech Mahindra down by 0.82%, Infosys down by 0.49% and HCL Tech down by 0.17% were the top losers.

Meanwhile, expressing optimism, Niti Aayog Vice-Chairman Rajiv Kumar has said a strong economic growth rebound is expected on the back of rapid vaccinations, a recovering monsoon boosting agricultural output, thrust on infrastructure investments by the government, and growth in export, which have performed remarkably during April June registering a growth of 18 per cent over the same period in the pre-pandemic year of 2019-20. Kumar further said that as per consensus estimates, despite downward revision in the GDP growth projections, India is expected to be amongst the fastest-growing major economies in the world. He added ‘We also expect consumption to recover in the third and fourth quarters of the fiscal year’.

According to Kumar, after phased unlocking post the second Covid wave, the economic activity has gained strength. The government has also stepped into provide another dose of stimulus of Rs 6.3 lakh crore, focused on healthcare, tourism, agriculture, infrastructure, MSMEs and exports. He noted ‘As growth momentum gathers pace, supported by the measures undertaken by the government, the Indian economy will emerge stronger on a sustainable development path’. The Niti Aayog Vice Chairman pointed out that compared to steady expansion in the first five months of 2021, the global Purchasing Managers’ Index (PMI) recorded slower growth in June and July.

He said ‘In Asia, the manufacturing PMI witnessed deceleration in China. In India, manufacturing PMI rose to a three-month high of 55.3 in July, reflecting likely expansion of manufacturing activity in the coming months’ and added that India’s services PMI improved to 45.4 but remained in the contraction zone. Kumar observed that subsequent to a fairly robust recovery in the March quarter, the Indian economy was impacted by a much stronger Covid second wave, leading to imposition of strict curbs across states and decline in economic activity.

Referring to the global economy, Kumar said according to the World Bank, the global economy is on a path of robust recovery, with a projected growth of 5.6 per cent in 2021 the strongest post-recession pace in 80 years. The real GDP of advanced economies is projected to expand by 5.4 per cent whereas emerging markets and developing economies are expected to grow by 6.0 per cent. However, the pace of recovery is diverging across countries, reflecting variations in pandemic-induced disruptions and the extent of policy support.

The CNX Nifty is currently trading at 16859.85, up by 154.65 points or 0.93% after trading in a range of 16764.85 and 16881.35. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.45%, Bajaj Finance up by 2.69%, Coal India up by 2.67%, Hindalco up by 2.52% and Titan Co up by 2.05%. On the flip side, Tech Mahindra down by 0.72%, Infosys down by 0.39%, Eicher Motors down by 0.28%, Wipro down by 0.16% and Nestle down by 0.06% were the top losers.

Asian markets were trading in green; Hang Seng rose 83.22 points or 0.33% to 25,491.11, Taiwan Weighted gained 93.24 points or 0.54% to 17,303.17, KOSPI added 11.16 points or 0.36% to 3,145.06, Shanghai Composite was up by 12.06 points or 0.34% to 3,534.22, Nikkei 225 gained 111.53 points or 0.40 % to 27,752.67, Straits Times surged 24.36 points or 0.54% to 17,303.17 and Jakarta Composite was up by 70.87 points or 1.17% to 6,112.24.