Markets trade in fine-fettle in early deals

Indian equity benchmarks made positive start, continuing their previous session’s rally, on Wednesday tracking gains in Asian peers. Markets extended their gains in early deals and are trading in fine-fettle with gains of around 0.40% each on the back of buying in Realty, Bankex and Capital Goods counters. Sentiments got a boost as India's economy grew by 20.1 per cent in the first quarter of 2021-22, helped by a low base of the year-ago period. According to data released by the National Statistical Office (NSO), the gross domestic product (GDP) had contracted by 24.4 per cent in the corresponding April-June quarter of 2020-21. Adding more optimism, Moody's Investors Service said the economic activity in India is picking up with the gradual easing of COVID restrictions and there could be further upside to growth as economies around the world gradually reopen. Some support also came in as the government data stated that high tax collections due to tighter rules for the goods and services tax (GST), and an economy on the recovery path coupled with expenditure compression resulted in the Centre's fiscal deficit narrowing to 21.3 per cent of the Budget Estimates (BE) in the first four months of the current financial year.

On the global front, most of the Asian markets are trading higher despite negative cues overnight from Wall Street, on sliding crude oil prices and data that showed a substantial deterioration in U.S. consumer sentiment. Back home, auto stocks were in focus today as the automobile companies are set to report their August sales figures. Also, aviation industry stocks were in limelight as credit ratings agency ICRA said pandemic-hit Indian aviation industry is expected to report a net loss of Rs 25,000-26,000 crore while its debt level may increase to Rs 1.2 lakh crore in the ongoing fiscal year. In scrip specific development, Shoppers Stop soared after it agreed to sell a controlling stake in its wholly-owned subsidiary Crossword Bookstores.

The BSE Sensex is currently trading at 57786.53, up by 234.14 points or 0.41% after trading in a range of 57277.88 and 57795.82. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Realty up by 1.66%, Bankex up by 1.41%, Capital Goods up by 1.21%, Power up by 1.19%, Consumer Durables up by 0.95%, while Metal down by 1.17%, Telecom down by 0.46%, TECK down by 0.41%, IT down by 0.37%, Basic Materials down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.73%, Asian Paints up by 2.78%, Indusind Bank up by 2.55%, Bajaj Auto up by 1.85% and Larsen & Toubro up by 1.64%. On the flip side, Tata Steel down by 1.80%, Maruti Suzuki down by 1.03%, HDFC down by 0.96%, Mahindra & Mahindra down by 0.89% and Bharti Airtel down by 0.87% were the top losers.

Meanwhile, Moody's Investors Service in its August update to 'Global Macro Outlook 2021-22' has said the economic activity in India is picking up with the gradual easing of COVID restrictions and there could be further upside to growth as economies around the world gradually reopen. Moody's retained India's growth forecast for the 2021 calendar year at 9.6 per cent and 7 per cent for 2022.

The rating agency said it expects the Reserve Bank to maintain an accommodative policy stance until economic growth prospects ‘durably improve’. It mentioned ‘We expect the RBI .... to maintain the status quo until the end of this year. We expect to see an increasing number of emerging market central banks shift to a neutral policy stance amid their gathering growth momentum later this year and early next year.’

Indian economy contracted 7.3 per cent in 2020-21 fiscal. GDP growth in the current fiscal was estimated to be in double digits initially, but a severe second wave of the pandemic has led to various agencies cut growth projections. Moody's had in June projected a 9.3 per cent growth for the current fiscal ending March 2022.

The CNX Nifty is currently trading at 17191.40, up by 59.20 points or 0.35% after trading in a range of 17148.15 and 17194.35. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.74%, Eicher Motors up by 2.86%, Indusind Bank up by 2.65%, Asian Paints up by 2.55% and ICICI Bank up by 1.83%. On the flip side, Tata Steel down by 1.83%, Hindalco down by 1.35%, JSW Steel down by 1.08%, HDFC down by 1.00% and Bharti Airtel down by 0.96% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 340.73 points or 1.21% to 28,430.27, Straits Times gained 34.04 points or 1.11% to 3,089.09, Hang Seng rose 165.31 points or 0.64% to 26,044.30, KOSPI added 2.54 points or 0.08% to 3,201.81 and Shanghai Composite was up by 30.62 points or 0.86% to 3,574.56. On the other hand, Taiwan Weighted fell 19.21 points or 0.11% to 17,471.08 and Jakarta Composite lost 41.22 points or 0.67% to 6,109.08.