Markets trade in fine fettle in early deals; all eyes on state election results

With a gap-up opening Indian equity markets have magnified their previous session’s rally and recaptured their crucial 55,700 (Sensex) and 16,600 (Nifty) levels. Markets are trading in fine fettle in early deals tracking strength across global markets as oil prices pulled back sharply after fanning inflationary fears. Meanwhile, broader indices too are trading in line with larger counterparts posting gains in the range of 1.70-1.95 percent. Vote counting for the recently concluded elections in five states began. As per the latest data, BJP was leading in UP with 191 seats. It was followed by SP (99 seats) and BSP (6 seats). A party or coalition needs to win 202 out of 403 seats to form government in the state. BJP was also leading in Uttarakhand, Manipur and Goa, though AAP was leading in Punjab.

On the global front, Asian markets are trading mostly higher, following the broadly positive cues overnight from US markets, amid slightly easing worries about inflation following a drop in commodity prices. The US markets ended higher on Wednesday after Ukrainian President Volodymyr Zelenskiy said the country is ready to hold a dialogue with Russia on security guarantees and the future of Donetsk, Lugansk and Crimea.

Back home, there were some reaction in defence industry stocks as Niti Aayog member V K Saraswat said India's defence sector will not face any problems because of the western sanctions on Russia as Moscow has an inherent military strength and is self-sufficient in its production capabilities. Most of the sectoral indices on the BSE are trading in the green with auto, bank and realty indices up by 2-3 percent.

The BSE Sensex is currently trading at 55725.38, up by 1078.05 points or 1.97% after trading in a range of 55564.83 and 56242.47. All 30 stocks advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.71%, while Small cap index up by 1.92%.

The gaining sectoral indices on the BSE were Auto up by 3.24%, Bankex up by 3.18%, Realty up by 2.71%, Consumer Disc up by 2.38% and Industrials up by 2.29%, while Metal down by 0.25% was the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.71%, SBI up by 3.91%, Maruti Suzuki up by 3.80%, Indusind Bank up by 3.64% and ICICI Bank up by 3.54%, while there were no losers.

Meanwhile, former Reserve Bank of India (RBI) governor Raghuram Rajan has said that India needs to recalibrate its response to the price situation following disruptions in global supply chains on account of Russia-Ukraine war, as losing the battle against inflation neither serves the government nor the central bank. Further, he said it is very important for any central bank to respect its mandate given to it by the government.

He stated India’s central bank has a mandate, which has served it well, in the sense of allowing it to react to some of the concerns during the pandemic, without raising rates, having moderate inflation. The RBI has a mandate to keep inflation target of 4 per cent with a +/-2 per cent tolerance band. ‘And like every other central bank, as we come out of it and face new challenges, we have to recalibrate and ask whether the old playbook sort of still holds,’ he said, adding that he thinks that’s extremely important.

The retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale-price index stayed in double-digits for the 10th month in a row. He said this (inflation) is coming on top of an already high level of inflation in many parts of the world. He added 'So when you add the additional effects of war, it gives greater weight to inflation'.

The CNX Nifty is currently trading at 16632.35, up by 287.00 points or 1.76% after trading in a range of 16593.05 and 16757.30. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.25%, Axis Bank up by 4.97%, Grasim Industries up by 4.70%, Maruti Suzuki up by 3.95% and Asian Paints up by 3.79%. On the flip side, Coal India down by 2.95%, ONGC down by 2.68%, Hindalco down by 1.71% and ITC down by 0.17% were only losers.

Asian markets are trading mostly in green; Taiwan Weighted strengthened 425.37 points or 2.5% to 17,440.73, Nikkei 225 surged 946.18 points or 3.83% to 25,663.71, Straits Times advanced 45.14 points or 1.41% to 3,240.52, Shanghai Composite gained 62.16 points or 1.91% to 3,318.55, KOSPI rose 55.71 points or 2.12% to 2,678.11 and Hang Seng was up 137.45 points or 0.67% to 20,765.16.

On the flip side, Jakarta Composite was down 6.54 points or 0.1% to 6,857.90.