Post Session: Quick Review

Indian equity benchmarks ended with notable gains on Friday. The start of day was in green terrain, as Ficci said 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. Ficci’s Economic Outlook Survey also noted that the ongoing festive season would support this momentum. Adding more optimism, domestic rating agency Crisil ahead of the filing of quarterly earnings by companies said India Inc is set to post an 18-20 per cent revenue growth for July-September as compared to the year-ago period. It said the handsome growth in the topline will be driven by both higher volumes and higher commodity prices.

Domestic sentiments remained positive, 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.

Markets maintained gains in the second half of the trading session, as some support 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.

During the trading session, traders remained positive, as the Reserve Bank of India (RBI) informed that India's growth rate has seen improvement, and the projection for Gross Domestic Product (GDP) for the financial year (FY) of 2021-22 has been retained at 9.5 per cent. Some support also came after the Centre released a total of Rs 1,15,000 crore to states and union territories in the current financial year as back-to-back loan to meet the shortfall in Goods and Services Tax (GST) compensation.

On the global front, European markets were trading mostly in red s declines in the technology sector more than offset gains in oil and auto shares, while investors remained cautious ahead of U.S. payrolls data. Asian markets ended mostly higher on Friday, after Malaysia's unemployment rate declined in August. The data from the Department of Statistics showed that the jobless rate fell to 4.6 percent in August from 4.8 percent in July. In the same month last year, unemployment rate was 4.7 percent.

The BSE Sensex ended at 60059.06, up by 381.23 points or 0.64% after trading in a range of 59830.93 and 60212.30. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.83%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 2.69%, IT up by 1.82%, TECK up by 1.48%, Industrials up by 0.53% and Oil & Gas up by 0.37%, while Realty down by 2.54%, Power down by 0.83%, FMCG down by 0.55%, Utilities down by 0.41% and Healthcare down by 0.28% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 3.84%, Infosys up by 1.91%, Tech Mahindra up by 1.53%, HCL Tech. up by 1.21% and TCS up by 1.10%. On the flip side, NTPC down by 1.19%, Hindustan Unilever down by 1.16%, Maruti Suzuki down by 0.88%, Dr. Reddy's Lab down by 0.86% and Titan Co down by 0.82% were the top losers. (Provisional)

Meanwhile, in order to meet the shortfall in GST Compensation, the Ministry of Finance has released an amount of Rs 40,000 crore to the States and UTs with Legislature under the back-to-back loan facility.  With the current release, the total amount released in the current financial year as back to back loan in-lieu of GST compensation has reached to Rs 1,15,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection.

All eligible States and UTs (with Legislature) have agreed to the arrangements of funding of the compensation shortfall under the back-to-back loan facility. For effective response and management of COVID-19 pandemic and a step-up in capital expenditure all States and UTs have a very important role to play.

For assisting the States/UTs in their endeavour, Ministry of Finance has frontloaded the release of assistance under the back-to-back loan facility during FY 2021-22 of Rs 1,15,000 crore (more than 72 percent of the total estimated shortfall for the entire year). The balance amount will be released in due course. This release will help the States/UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.

The CNX Nifty ended at 17895.20, up by 104.85 points or 0.59% after trading in a range of 17840.35 and 17941.85. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 3.84%, Wipro up by 2.83%, Infosys up by 1.94%, Tata Motors up by 1.71% and Tech Mahindra up by 1.61%. On the flip side, SBI Life Insurance down by 1.53%, NTPC down by 1.19%, Coal India down by 1.18%, Hindustan Unilever down by 1.10% and Shree Cement down by 1.08% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 16.82 points or 0.25% to 6,583.37 and Germany’s DAX was down by 34.36 points or 0.23% to 15,216.50. On the flip side, UK’s FTSE 100 increased 2.90 points or 0.04% to 7,080.94.

Asian markets ended mostly higher on Friday, tracked by a positive session at Wall Street overnight after data showed a bigger-than-expected drop in new jobless claims last week, while the US non-farm payrolls data due out later in the day is expected to show continued improvement in the US labour market. Further, the US lawmakers have reached an agreement to temporarily raise the nation's debt limit, avoiding a historic default that would have devastated the economy. Chinese shares gained as Chinese markets came back from one-week holiday and encouraged by a survey showing services sector activity returned to growth in September. Moreover, Hong Kong shares gained amid easing political tensions between China and the United States.