Domestic indices trade firm in early deals; Realty index up over 3%

Indian equity benchmarks began Tuesday’s session on optimistic note following overnight gains on Wall Street. Soon, markets extended their gains and are trading firm in early deals with gains of over a percent each on account of buying in almost all the sector indices, except Healthcare. Gains were led by Realty, Industrials and PSU counters. Traders took encouragement with Minister of State for Finance Pankaj Chaudhary’s statement the net direct tax collection grew nearly 68 per cent during April 1 to November 23 to more than Rs 6.92 lakh crore. Some support came in as India Ratings expects the economy to grow 8.3 per cent in Q2 and close the year with 9.4 per cent in FY'22. Meanwhile, investors are eyeing GDP numbers for the July-September quarter to be released later today. India is expected to report strong growth as the economy bounces back from the pandemic lows.

On the global front, Asian markets traded mostly higher following the broadly positive cues from Wall Street overnight, as traders are picking up stocks at a bargain after the recent virus-infused heavy sell-off. Traders also reacted positively to reports that the new coronavirus variant would be milder than initially dreaded, even as they await more details to assess the likely impact of the variant on the global economy recovery.

Back home, aviation industry stocks were in focus as the government said investments worth Rs 91,000 crore will be made for developing existing and new airports in different parts of the country, as several measures are being taken to boost the civil aviation sector. In scrip specific development, Dish TV rose after the Supreme Court agreed to hear the petition filed by YES Bank to appeal against an Allahabad High Court order which dismissed the bank's petition to de-freeze its voting rights in Dish TV India. Besides, shares of Go Fashion are set to list today after the IPO was subscribed 135.46 times during the offer period.  Star Health is set to launch an initial public offer (IPO) to raise Rs 7,249 crore.

The BSE Sensex is currently trading at 57901.10, up by 640.52 points or 1.12% after trading in a range of 57252.45 and 57934.74. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.79%, while Small cap index was up by 1.88%.

The top gaining sectoral indices on the BSE were Realty up by 3.84%, Industrials up by 1.90%, PSU up by 1.88%, IT up by 1.87%, Consumer Durables up by 1.81%, while Healthcare down by 0.03% was the sole losing index on BSE.

The top gainers on the Sensex were Power Grid up by 3.45%, Tech Mahindra up by 3.07%, Bajaj Finserv up by 2.60%, Axis Bank up by 2.17% and Bajaj Finance up by 2.16%. On the flip side, Dr. Reddy's Lab down by 0.78% and Kotak Mahindra Bank down by 0.14% were the only losers.

Meanwhile, ahead of government’s Q2 GDP number release, India Ratings has said that it expects the economy to grow 8.3 percent in Q2 and close the year with 9.4 percent in FY22, which is 10 bps lower than the consensus forecast. The agency has attributed the higher growth to the nine consecutive quarters of over 3 percent agriculture growth, which has brightened consumer spending and the resultant uptick in private final consumption expenditure, which is likely to clip at around 10 percent in September quarter of the current fiscal. It added that another major reason is the near three-fold jump in vaccination, which soared to 890.21 million as of October-end from 335.72 million at June-end.

Noting that Q1 was impacted by the second wave leading to reduced workplace mobility and in turn economic activities, which at end-Q1 was 26 percent lower than the base line and 16 percent lower than baseline in FY21, it said mobility started improving only in Q2 yet it was only 7 percent annualised lower than the baseline at end-Q2 of FY22. The workplace mobility improved after vaccination pace gathered the momentum. Cumulative vaccinations jumped to 890.21 million at end-Q2 from 335.72 million at end-Q1. Even investment activities have found support from the government's focus on infrastructure and the agency expects the fixed capital formation to grow at around 8.5 percent in Q2.

The government capex grew 51.9 percent in Q2 as against 26.3 percent in the same previous quarter of the current fiscal and the aggregate capex of 24 states grew 62.2 percent in Q2 massively down from 98.4 percent in Q1. Yet private capex revival is still slow and limited to select sectors. Since H1 growth is mainly due to the lower base, economic growth is expected to revert closer to the medium/long trend growth from the second half onwards. However, the report said recent reforms like production-linked incentive scheme and sustained export growth may provide a fillip to the ongoing growth recovery.

The CNX Nifty is currently trading at 17245.90, up by 191.95 points or 1.13% after trading in a range of 17051.05 and 17249.15. There were 46 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.34%, Power Grid up by 3.22%, Tata Motors up by 3.09%, Bajaj Finserv up by 2.78% and Bajaj Finance up by 2.60%. On the flip side, Dr. Reddy's Lab down by 0.80%, Divi's Lab down by 0.64% and HDFC Life Insurance down by 0.01% were the few losers.

Asian markets are trading mostly higher; Nikkei 225 rose 221.06 points or 0.78% to 28,504.98, Taiwan Weighted surged 165.72 points or 0.96% to 17,493.81, Jakarta Composite added 31.51 points or 0.48% to 6,639.80 and Shanghai Composite was up by 8.31 points or 0.23% to 3,571.01. On the other hand, Straits Times declined 17.54 points or 0.56% to 3,103.04, Hang Seng slipped 274.21 points or 1.15% to 23,578.03 and KOSPI plunged 31.43 points or 1.08% to 2,877.89.