Bourses continue to trade in high spirit

Indian equity benchmarks continued to trade in high spirit in afternoon session, on account of broad based buying in blue chip counters amid positive Asian cues. Most of the sectoral indices were trading firm and Metal was the top gainer on BSE, up by around 3% followed by Power and Basic Materials indices, trading up over 2%. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 1.50% each. Sentiments were upbeat as foreign direct investment (FDI) equity inflow into the country grew by 168 per cent to $17.57 billion in the first three months of 2021-22 (Q1FY22) as compared to $6.56 billion in the same period of the last year. In another positive development, 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.

On the global front, Asian markets were trading mostly higher bolstered by Jerome Powell’s signal that pandemic-era Federal Reserve policy support will be withdrawn cautiously and gradually. Back home, Reserve Bank of India (RBI) has launched the next round of households surveys to capture inflation expectations and consumer confidence, which provide useful inputs for its monetary policy.

The BSE Sensex is currently trading at 56649.11, up by 524.39 points or 0.93% after trading in a range of 56309.86 and 56734.29. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.56%, while Small cap index was up by 1.64%.

The top gaining sectoral indices on the BSE were Metal up by 2.45%, Power up by 2.08%, Basic Materials up by 2.06%, Utilities up by 2.01% and  Realty was up by 1.73%, while IT was down by 0.11% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.58%, Bajaj Finance up by 2.75%, Titan Co up by 2.21%, Mahindra & Mahindra up by 1.90% and Maruti Suzuki was up by 1.85%. On the flip side, Tech Mahindra down by 0.87%, Infosys down by 0.54%, Nestle down by 0.20%, HCL Tech down by 0.09% and Hindustan Unilever was down by 0.01% were the top losers.

Meanwhile, 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.

The revenue receipts of state governments are expected to improve, backed by an economic recovery, resulting from a large section of the populace receiving vaccinations. This would lead to states further easing restrictions on business and commercial activity. It said ‘We now expect the aggregate revenue deficit of states to come in marginally lower at 1.3 per cent of GDP in FY22 than the earlier forecast of 1.5 per cent of GDP’.

After analysis of information of 14 states for Q1 FY22, the agency found that the aggregate revenue receipts of these states grew 30.8 per cent to Rs 3.95 lakh crore during the period. Although the considerable improvement is due to a low base, revenue receipts grew 1.5 per cent in Q1 FY22 over the pre-COVID 19 period of Q1 FY20. The agency further said the aggregate own tax and non-tax revenue receipt of 14 states grew 77 per cent Y-o-Y and 46 per cent y-o-y, respectively, in Q1 FY22. This indicates that these states' revenue collection was resilient to the disruptions from the second Covid wave.

All states' gross market borrowings were Rs 7.88 lakh crore in FY'21. During April-July 2021, states' aggregate market borrowing was lower at Rs 1.94 lakh crore than Rs 2.1 lakh crore in April-July 2020, the report said adding that this is primarily attributable to an improvement in states' aggregate revenue receipts during Q1 FY22. The agency estimates the gross market borrowings of states, in aggregate, will increase to Rs 8.2 lakh crore in FY22 compared to its previous estimate of Rs 8.4 lakh crore. The net market borrowings would be Rs 6.2 lakh crore in FY22 compared to Rs 6.45 lakh crore in FY21.

The CNX Nifty is currently trading at 16862.85, up by 157.65 points or 0.94% 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 3.54%, Coal India up by 2.85%, Bajaj Finance up by 2.71%, Hindalco up by 2.50% and Titan Co was up by 2.26%. On the flip side, Tech Mahindra down by 0.75%, Infosys down by 0.57%, Eicher Motors down by 0.25%, Wipro down by 0.20% and Nestle was down by 0.16% were the top losers.

Asian markets were trading mostly higher; KOSPI rose 10.29 points or 0.33% to 3,144.19, Hang Seng increased 4.39 points or 0.02% to 25,412.28, Jakarta Composite soared 73.46 points or 1.22% to 6,114.83, Taiwan Weighted strengthened 186.59 points or 1.08% to 17,396.52, Nikkei 225 surged 148.15 points or 0.54% to 27,789.29 and Straits Times was up by 23.16 points or 0.75% to 3,103.93.

On the flip side, Shanghai Composite was down by 2.14 points or 0.06% to 3,520.02.