Key gauges extend gains after RBI keeps repo rate unchanged

Indian equity benchmarks extended gains in morning deals, amid strength across global markets. Sentiments improved further after the Reserve Bank of India’s monetary policy committee kept key interest rates unchanged, while retaining an accommodative stance to help revive the economy, which is facing a slowdown due to the coronavirus pandemic. Some optimism came with Commerce and Industry Minister Piyush Goyal’s statement that the US has huge investment surpluses that can be used in developing infrastructure in India and make it a manufacturing base to help American economy grow and provide goods and services at affordable and competitive prices. Additional support also came with Chief Economic Adviser K V Subramanian’s statement that the focus of the government policies in the last seven years has been on enabling competition in the economy, stressing this is partly responsible for growth of startups. He expressed hope that the country will witness double-digit growth in the current fiscal year aided by a prudent mix of supply and demand side measures undertaken by the government.

On the global front, Asian markets were trading mostly in green tracked a Wall Street climb as concerns eased about the US debt ceiling and an energy crunch. Investors are awaiting a key American jobs report and the start of trading in China after a holiday. Back home, on the sectoral front, Cement industry’s stocks remained in focus as the South Indian Cement Manufacturers Association expects cement production likely to be badly hit as there has been an unprecedented increase in the cost of imported coal and 'pet coke'.

The BSE Sensex is currently trading at 60149.69, up by 471.86 points or 0.79% after trading in a range of 59830.93 and 60152.40. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.50%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were IT up by 1.73%, TECK up by 1.54%, Energy up by 1.12%, Metal up by 0.87% and Auto up by 0.79%, while Realty down by 1.36%, Power down by 0.36%, Utilities down by 0.20% and FMCG down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.80%, TCS up by 1.69%, Infosys up by 1.68%, Reliance Industries up by 1.56% and Bajaj Finserv up by 1.30%. On the flip side, Hindustan Unilever down by 0.76%, NTPC down by 0.53%, Nestle down by 0.23% and Maruti Suzuki down by 0.02% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce & Industry (FICCI) in its latest Economic Outlook Survey has stated that India’s GDP is expected to grow at 9.1 per cent in 2021-22 as economic recovery, post the second wave of the pandemic, seems to be holding ground. It also noted that the ongoing festive season would support this momentum. However, the industry body cautioned that a likely surge in people’s movement during Diwali can lead to a rise in the number of COVID cases again.

The chamber said ‘the latest round of Ficci’s Economic Outlook Survey has put forth an annual median GDP growth forecast for 2021-22 at 9.1 per cent. This marks a marginal improvement from the growth projection of 9 per cent recorded in the previous survey round (July 2021)’. It added pick-up in monsoon rains in the latter part of the season and subsequent increase in kharif acreage is likely to keep growth expectations of the agriculture sector upbeat. The survey was conducted in September 2021 and drew responses from leading economists representing the industry, banking and financial services sector.

The industry body said ‘the second quarter GDP data and the upcoming festive season should give a clearer idea of where we are headed on the recovery path and how the demand situation is panning out’. With regard to heading back to the process of normalization, the survey said it was largely felt that the Reserve Bank may indicate a change of stance from accommodative to neutral in the February 2022 policy meeting. It noted ‘however, a hike in the repo rate only looks imminent in the next fiscal year (April 2022). Also, the path towards positive real interest rates is expected to be a staggered one. Much would be contingent on the build-up in domestic price levels and the extent of tapering by the Federal Reserve’.

The CNX Nifty is currently trading at 17936.65, up by 146.30 points or 0.82% after trading in a range of 17848.15 and 17937.95. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.07%, Wipro up by 2.06%, Tata Motors up by 2.05%, TCS up by 1.81% and Infosys up by 1.75%. On the flip side, Coal India down by 2.83%, Hindustan Unilever down by 0.67%, NTPC down by 0.56%, BPCL down by 0.38% and Nestle down by 0.15% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 477.29 points or 1.72% to 28,155.50, Jakarta Composite soared 53.23 points or 0.83% to 6,469.63, Shanghai Composite gained 11.79 points or 0.33% to 3,579.96 and Straits Times advanced 3.43 points or 0.11% to 3,104.58.

On the flip side, KOSPI fell 10.39 points or 0.35% to 2,949.07, Hang Seng decreased 65.27 points or 0.26% to 24,636.46 and Taiwan Weighted dropped 77.68 points or 0.46% to 16,636.18