Barometer gauges maintain gains

Stock markets were trading in fine fettle in the noon session as investors are not too worried about the COVID-19 situation as reports suggest the fast-spreading Omicron variant is not virulent and hospitalisation cases are very low. Also, Mumbai Mayor Kishori Pednekar stated that the numbers of COVID-19 cases and its fast spreading variant Omicron were slowing coming down in the city. Additional support came as World Bank in its latest Global Economic Prospects report retained India’s gross domestic product (GDP) growth forecast at 8.3 percent for current fiscal year 2021-22 (FY22) as what was stated in its last projection released in October 2021.

On the global front, Asian markets were trading mostly higher braced with the bullish stance among market players after less-hawkish comments from US Federal Reserve Chairman, Jerome Powell. Back home, in scrip specific developments JTL Infra surged on reporting around 3-fold jump in Q3 net profit and Steel Exchange India jumped on FPI buying.

The BSE Sensex is currently trading at 61074.53, up by 457.64 points or 0.75% after trading in a range of 60850.93 and 61210.08. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.67%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Energy up by 1.90%, Realty up by 1.72%, Metal up by 1.41%, Telecom up by 1.24% and Power was up by 1.03%, while Consumer Durables down by 0.28% and Healthcare was down by 0.24% were the only losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.54%, Mahindra & Mahindra up by 2.54%, Indusind Bank up by 1.98%, Bajaj Finance up by 1.54% and Kotak Mahindra Bank was up by 1.35%. On the flip side, Titan Company down by 1.33%, TCS down by 0.86%, Wipro down by 0.80%, Tech Mahindra down by 0.43% and HDFC Bank was down by 0.27% were the top losers.

Meanwhile, working paper released by the Reserve Bank of India (RBI) has said that when sentiments about future inflation are on the higher side, households change their savings portfolio with respect to bank deposits. It said inflation expectations play a vital role in regulating households' consumption behaviour and consequent savings. It found that an increase in the households' inflation expectations impacts their savings in debt-based instruments, like bank term deposits, negatively; thus, indicating their reduced preference for bank term deposits when they expect rising inflation.

The paper said especially in the case of a developing economy, it is desirable for households to save in financial instruments like debt or equity, which can be utilized further into production enhancing activities. However, it said considering the still nascent stage of development of corporate bond markets and low awareness of equity markets; the financial instrument accessible for most Indian households is bank deposits. It noted that if households expect inflation to pick up in the medium term and they suspect low returns due to low real interest rates, it may be preferable for them to invest in commodities like precious metals, jewellery, etc., than saving in term deposits.

It further said changes in inflation expectations do not necessarily reflect the volatility of any particular food item; rather various food items, irrespective of their weight in the Consumer Price Index basket, influence the households' sentiments at various time points due to their weightage in the households' consumption baskets. It said that different factors influence inflation expectations of households during different time periods, depending on the price movement in specific items. It added that a sudden price shock in any item may result in it having a disproportionate influence on households' inflation perception and future expectations.

The CNX Nifty is currently trading at 18192.05, up by 136.30 points or 0.75% after trading in a range of 18128.80 and 18221.30. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.63%, Reliance Industries up by 2.45%, Hindalco up by 2.32%, ONGC up by 2.21% and Indusind Bank was up by 1.98%. On the flip side, Titan Co down by 1.41%, Cipla down by 1.17%, Shree Cement down by 1.13%, TCS down by 0.90% and Wipro was down by 0.89% were the top losers.

Asian markets were trading mostly higher; KOSPI rose 44.31 points or 1.51% to 2,971.69, Taiwan Weighted strengthened 87.19 points or 0.48% to 18,375.40, Hang Seng increased 629.78 points or 2.65% to 24,368.84, Shanghai Composite gained 28.60 points or 0.8% to 3,596.04, Jakarta Composite soared 11.65 points or 0.18% to 6,659.62 and Nikkei 225 was up by 543.18 points or 1.92% to 28,765.66.

On the other hand, Straits Times was down by 0.25 points or 0.01% to 3,246.12.