Bourses maintain upbeat mood in morning deals; RBI keeps rates unchanged

Indian equity indices maintained their upbeat mood in morning session, after the Reserve Bank of India's Monetary Policy Committee held repo rate at record low of 4 per cent and maintained accommodative policy stance to support growth for as long as necessary. Sentiments also remained up-beat with global rating agency S&P’s statement that the impact of the new coronavirus variant on India's economic outlook would be contained. It expects India's economy to grow 9.5% in FY22 and 7.8% in FY23. Adding to the optimism, Minister of State for Finance Bhagwat Karad said public sector banks (PSBs) recovered over Rs 4.18 lakh crore in the last three financial years from incidents pertaining to frauds and defaults. Also, the amount related to frauds of Rs 1 lakh and above has declined over the period. He added that the government has taken comprehensive steps to tackle defaults and to effect recovery from defaulters. Traders also took a note of Fitch Ratings’ report in which it cut India's economic growth forecast to 8.4 per cent for the current fiscal year ending March 31, 2022, but raised GDP growth projection for the next financial year to 10.3 per cent. 

On the global front, Asian markets were trading mostly in green as investors wagered that the new variant of the COVID-19 virus won't pose a big threat to the economy. However, a revised estimate released showed that Japan's economy contracted at a 3.6% annual rate in July-September. The downgraded growth estimate for the last quarter, down from an earlier report of a 3.0% contraction, reflected weaker consumer spending and trade. Back home, on the sectoral front, infrastructure industry’s stocks remained in focus as Crisil Ratings said strong order execution will swell the revenue of road engineering, procurement and construction (EPC) companies by 15 per cent this fiscal, compared to 5 per cent in the pandemic-marred last fiscal.

The BSE Sensex is currently trading at 58358.80, up by 725.15 points or 1.26% after trading in a range of 58122.27 and 58495.46. There were 27 stocks advancing against 3 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 1.29%.

The top gaining sectoral indices on the BSE were IT up by 1.88%, TECK up by 1.83%, Telecom up by 1.60%, Realty up by 1.42% and Industrials up by 1.26%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.55%, Sun Pharma up by 2.27%, HCL Technologies up by 2.12%, Infosys up by 2.08% and ICICI Bank up by 2.02%. On the flip side, Kotak Mahindra Bank down by 0.37%, Maruti Suzuki down by 0.27% and Nestle down by 0.02% were the top losers.

Meanwhile, Crisil Ratings has said that strong order execution will swell the revenue of road engineering, procurement and construction (EPC) companies by 15 per cent this fiscal (FY22), compared to 5 per cent in the pandemic-marred last fiscal. However, it said operating profitability will moderate by 100-150 basis points on-year due to surging raw material prices and increasing competition.

Even so, credit profiles of these players will remain stable, it said, citing that the trend will be supported by their healthy order books, well-managed balance sheets, prudent working capital management, and steady cash accruals.

Anuj Sethi, Senior Director, Crisil Ratings, said with fewer restrictions on construction activities during the second wave of the pandemic, road project execution was not impacted as severely as during the first wave.  This has manifested in healthy revenue growth of 37 per cent on-year in the first half of this fiscal, albeit on a significantly weak base of last fiscal.

The CNX Nifty is currently trading at 17390.15, up by 213.45 points or 1.24% after trading in a range of 17308.95 and 17424.65. There were 46 stocks advancing against 4 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Bajaj Finance up by 2.52%, Grasim Industries up by 2.35%, Sun Pharma Inds. up by 2.33%, Wipro up by 2.15% and Infosys up by 2.14%. On the flip side, HDFC Life Insurance down by 0.91%, Maruti Suzuki down by 0.21%, Coal India down by 0.13% and Kotak Mahindra Bank down by 0.05% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 385.47 points or 1.35% to 28,841.07, Taiwan Weighted strengthened 97.77 points or 0.55% to 17,894.69, Shanghai Composite gained 31.02 points or 0.86% to 3,626.11, KOSPI rose 16.05 points or 0.54% to 3,007.77 and Jakarta Composite soared 15.19 points or 0.23% to 6,617.76.

On the flip side, Straits Times trembled 7.88 points or 0.25% to 3,126.78 and Hang Seng decreased 28.75 points or 0.12% to 23,954.91.