Domestic indices extend opening gains to trade firm in early deals

Indian equity benchmarks made gap-up opening on Friday tracking firm trade in global markets after US and its allies announced harsher sanctions against Russia. Domestic indices soon extended their gains and are trading higher with gains of over 2% each in early deals on board based buying. Some support came in as Chief Economic Advisor (CEA) V Anantha Nageswaran said that the Indian economy is now poised for recovery but high crude oil price is a cause for concern. He said the banking sector in the country is stable, capital is available and credit offtake is poised to take off. Besides, the income tax department said it has issued refunds of close to Rs 1.83 lakh crore to more than 2.07 crore taxpayers so far this fiscal. This includes 1.67 crore refunds of the 2020-21 fiscal ended March 31, 2021, amounting to Rs 33,818.97 crore.

Most of the Asian markets are trading higher following the broadly positive cues overnight from Wall Street, as traders picked up stocks at a bargain after the recent sell-off amid the continued escalation of the Russia-Ukraine crisis. Meanwhile, Japan is also looking to further ease border controls as the sixth wave of coronavirus wanes. Back home, pharma stocks were in focus as the government removed export curbs on Remdesivir injection and its active pharmaceutical ingredients (APIs) amid declining COVID-19 cases in the country.

The BSE Sensex is currently trading at 55881.78, up by 1351.87 points or 2.48% after trading in a range of 55299.28 and 55915.12. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 3.89%, while Small cap index was up by 4.26%.

The top gaining sectoral indices on the BSE were Realty up by 5.05%, Metal up by 4.87%, Industrials up by 4.26%, Basic Materials up by 4.23%, Power up by 3.86%, while there was no losers on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 5.54%, Indusind Bank up by 5.34%, Bajaj Finance up by 4.14%, Bajaj Finserv up by 3.88% and ICICI Bank up by 3.65%. On the flip side, Nestle down by 0.22% was the sole loser.

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran has expressed optimism over economic growth and said that the Indian economy is now poised for recovery but high crude oil price is a cause for concern. He said the banking sector in the country is stable, capital is available and credit offtake is poised to take off. He also said ‘we are not unique to the phenomenon of uncertain growth and high inflation due to the pandemic. Developed countries are also facing the same problem.’ The budget for 2022-23 has been made keeping in mind that the price of crude oil will be around $75 per barrel. But due to the conflict between Russia and Ukraine, the price of Texas crude is now $96 per barrel.

Nageswaran said ‘Its impact on the Indian economy will depend how long this high price will remain’. According to him, inflation and purchasing power is a worldwide problem. This has been due to rise in shipping costs, high container costs and high oil prices. He said in India inflation rates are hovering around 5.2 per cent at the moment. ‘But, I feel it should remain within four to six per cent in the next fiscal which the RBI is targeting’. He said the market has begun to correct in India. Activity levels in some industries have crossed the pre-pandemic levels. But the services sector is yet to recover.

Regarding private sector investment scenario, the CEA said it is yet to pick up due to the pandemic cloud which is still there. It will pick up when consumption levels increase. He said ‘But the capital expenditure plan in the budget is higher in 2022-23. This has been done to fill in the void. In fact, capital expenditure by the states have also increased’. He noted that for India to achieve $5 trillion economy, the share of agriculture, manufacturing and services should be in the ratio 20:30:50 in the country’s GDP.

The CNX Nifty is currently trading at 16670.55, up by 422.60 points or 2.60% after trading in a range of 16478.30 and 16691.45. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 7.57%, Adani Ports & SEZ up by 5.48%, Indusind Bank up by 5.46%, Tata Steel up by 5.44% and JSW Steel up by 4.59%. On the flip side, Britannia Industries down by 1.22% and Nestle down by 0.20% were the only losers.

Asian market are trading mostly in green; Nikkei 225 surged 434.96 points or 1.67% to 26,405.78, Straits Times added 28.44 points or 0.87% to 3,304.50, Taiwan Weighted rose 39.03 points or 0.22% to 17,633.58, KOSPI gained 30.18 points or 1.14% to 2,678.98, Jakarta Composite advanced 47.57 points or 0.70% to 6,865.39 and Shanghai Composite was up by 18.39 points or 0.54% to 3,448.35, while Hang Seng was down by 29.44 points or 0.13% to 22,872.12.