Markets trade in high spirit after gap-up opening

Indian equity benchmarks made gap-up opening on Monday tracking strength in global markets. Domestic indices are trading in high spirit with gains of over half a percent each in early deals on account of buying in all the sector indices led by Power, Utilities and Consumer Durables. Sentiments got a boost with the government data showing that India's industrial production rose 3.2 per cent in October 2021. As per the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector's output grew 2 per cent in October. Now, market participants are eying consumer price index (CPI) for further cues. Some support also came in as the finance ministry said India's economic recovery is expected to strengthen in the remaining quarters of the current fiscal year with the investment cycle kicking off, and projected 7% annual growth until the end of the decade.

Global cues remained strong with all the Asian markets trading higher following the broadly positive cues from Wall Street on Friday, on a spike in commodity prices and easing worries about the coronavirus Omicron variant's impact on global economic growth. Back home, power stocks were in focus as power ministry data showed that India's power consumption grew by 1.3 per cent in the first ten days of this month from December 1 to 10 to 34.23 billion units (BU) over the same period a year ago. In scrip specific development, State Bank of India has raised about Rs 3,974-crore capital through additional tier 1 bonds (AT1 bonds). The coupon for the AT1 bonds was fixed at 7.55 per cent, cheaper by 17-basis points over the last issuance in September 2021. Besides, shares of Tega Industries will list on the stock exchanges today. MedPlus Health Services’ IPO will open for subscription today.

The BSE Sensex is currently trading at 59158.72, up by 372.05 points or 0.63% after trading in a range of 59069.90 and 59201.23. 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 0.63%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Power up by 1.96%, Utilities up by 1.48%, Consumer Durables up by 1.34%, Metal up by 1.33%, PSU up by 1.19%, while there was no loser.

The top gainers on the Sensex were Power Grid up by 3.18%, Axis Bank up by 2.44%, NTPC up by 1.66%, Titan Company up by 1.39% and Sun Pharma up by 1.39%. On the flip side, Bajaj Finance down by 1.81%, Nestle down by 0.27% and Bajaj Finserv down by 0.12% were the top losers.

Meanwhile, assuaging that the Omicron variant’s impact on the economy will be less severe due to rapid vaccination, Finance Ministry in its monthly Economic Review report has said that India will be among only a few economies in the world to rebound strongly from COVID-19 induced economic contraction of 2020-21. As per the report, real GDP in Q2 of FY2021-22 has grown by 8.4 per cent YoY, recovering more than 100 per cent of the pre-pandemic output in the corresponding quarter of FY2019-20. It added ‘India is among the few countries that have recorded four consecutive quarters of growth amid Covid-19 (Q3, Q4 of FY21 and Q1, Q2 of FY22) reflecting the resilience of the Indian economy. The recovery was driven by a revival in services, full-recovery in manufacturing and sustained growth in agriculture sectors’.

The report said the recovery suggests kick-starting of the investment cycle, supported by surging vaccination coverage and efficient economic management activating the macro and micro drivers of growth. It also said India’s economic recovery is expected to gain further strength in the remaining quarters of the financial year, as evident from 19 among 22 High Frequency Indicators (HFIs) in September, October and November of 2021 crossing their pre-pandemic levels in the corresponding months of 2019. The Finance Ministry said ‘Yet, Omicron, a new variant of COVID-19 may pose a fresh risk to the ongoing global recovery. However, preliminary evidence suggests that the Omicron variant is expected to be less severe and more so with increasing pace of vaccination in India’.

Observing that the COVID-19 pandemic has led to considerable human and economic costs setting countries back on their developmental goals, the latest review said the year 2021 is thus a ‘catch-up’ year for the global economy including India, trying to recover the pre-pandemic output level of 2019. The report said India has not only caught up with its pre-pandemic output of Q2, but is also expected to do so for the full year. Noting that the agriculture sector has been the foundation on which economic contraction in India was minimised in FY2020-21 and recovery sped up in FY2021-22, the report said rising production of food grains, increase in MSPs for both kharif and rabi crops in 2021-22 have also raised rural incomes.

The CNX Nifty is currently trading at 17626.10, up by 114.80 points or 0.66% after trading in a range of 17600.75 and 17639.50. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.13%, Axis Bank up by 2.61%, Tata Motors up by 2.17%, Tech Mahindra up by 1.77% and Hindalco up by 1.69%. On the flip side, Bajaj Finance down by 1.76%, Bajaj Finserv down by 0.43%, Nestle down by 0.26%, Divi's Lab down by 0.14% and Reliance Industries down by 0.06% were the top losers.

Asian markets were trading higher; Nikkei 225 jumped 239.82 points or 0.84% to 28,677.59, Straits Times rose 7.51 points or 0.24% to 3,143.12, Hang Seng surged 244.86 points or 1.02% to 24,240.58, Taiwan Weighted added 42.18 points or 0.24% to 17,868.44, KOSPI gained 8.04 points or 0.27% to 3,018.27, Jakarta Composite advanced 20.06 points or 0.30% to 6,672.98 and Shanghai Composite was up by 36.53 points or 1.00% to 3,702.88