Bourses manage to keep heads in green terrain in morning deals

Indian equity benchmarks managed to keep heads in green terrain in morning session, on the back of buying by funds and retail investors despite negative cues from global markets. Traders were taking support from private report stating that Indians are slowly making their way back to the office and is witnessing a consumption revival in the country with spending intent shifting towards more discretionary items. It also said decreasing number of COVID-19 cases as well as an aggressive vaccination drive have brought in a new wave of confidence amongst Indian consumers. Some support also came with Niti Aayog member V K Saraswat’s statement that the Indian innovation ecosystem is driven by knowledge economy, fundamental research driven by marketplace, and disruptive technologies like machine learning and artificial intelligence. However, gains remain capped as the Organisation for Economic Co-operation and Development (OECD) in its latest report has cut its projection of India's economic growth by 0.2 percentage points to 9.7 per cent for the current financial year (FY22).

On the global front, Asian markets were trading mostly in red as continued worries about potential collapse of China's real estate firm Evergrande dented sentiment, even as traders remain concerned about the domestic coronavirus situation. Back home, on the sectoral front, stocks related to Gems and Jewellery sector remained in watch as Crisil Ratings said after two consecutive years of decline, the revenue of gold jewellery retailers is poised to grow 12 to 14 per cent on-year this fiscal. This will be driven by stable gold prices and recovery in discretionary spending, including on wedding and festive jewellery.

The BSE Sensex is currently trading at 59072.90, up by 67.63 points or 0.11% after trading in a range of 58886.83 and 59178.44. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.99%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Realty up by 1.60%, Consumer Disc up by 1.15%, TECK up by 1.15%, IT up by 0.99% and Auto up by 0.88%, while Utilities down by 0.27%, Bankex down by 0.17%, Metal down by 0.17%, FMCG down by 0.10% and Power down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 4.13%, NTPC up by 1.37%, HCL Technologies up by 1.14%, Indusind Bank up by 0.97% and Mahindra & Mahindra up by 0.91%. On the flip side, HDFC down by 0.87%, Nestle down by 0.78%, HDFC Bank down by 0.75%, Axis Bank down by 0.58% and Hindustan Unilever down by 0.46% were the top losers.

Meanwhile, the cost of borrowing for states continues to decline, with the latest auction held on September 21, 2021 witnessing a 7 basis points fall in weighted average pricing of their debt to a three-week low of 6.80 per cent, as the draw-down from the ways and means advances (WMA) began to jump again. According to Icra Rating and Care Ratings, the weighted average cut-off of state development loans declined by 7 bps to 6.80 per cent, led by a 9 bps decline in the same to 6.78 per cent from 6.87 per cent last week for the 10-year instrument, with easing across tenors.

This has the spread between the 10-year state debt and the G-sec easing to 65 bps on September 21 from 70 bps last week, the lowest since the first week of April. A basis point is 100th of a per cent. At the auctions held on September 21, eight states raised Rs 8,910 crore and all of them accepted the notified amount. The market borrowings by the states so far in FY22 stood at 11 per cent less than that in the comparable period of FY21, as 25 states and Delhi have cumulatively raised Rs 2.92 lakh crore so far against Rs 3.27 lakh crore a year ago by 27 states and two Union territories. At this level, the borrowings so far are 12 per cent lower than the borrowings as per the indicative auction calendar for this period.

The debt raising is slow this year as many states are meeting their revenue shortfalls by tapping the financial accommodation being provided by the RBI by way of short-term borrowing through SDF (special drawing facility) and WMA (ways and means advances) instead of the debt market.

The CNX Nifty is currently trading at 17574.80, up by 12.80 points or 0.07% after trading in a range of 17528.95 and 17609.70. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.86%, Tata Motors up by 2.24%, NTPC up by 1.17%, BPCL up by 1.16% and HCL Technologies up by 1.12%. On the flip side, ONGC down by 1.37%, Nestle down by 0.99%, HDFC Bank down by 0.91%, UPL down by 0.91% and HDFC down by 0.90% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 342.95 points or 1.99% to 16,933.84, Nikkei 225 slipped 177.16 points or 0.59% to 29,662.55, Straits Times trembled 20.15 points or 0.66% to 3,043.05 and Shanghai Composite declined 10.56 points or 0.29% to 3,603.41.

On the flip side, Jakarta Composite soared 45.55 points or 0.75% to 6,106.31.