Post Session: Quick Review

Indian equity benchmarks witnessed a bull run on Wednesday, with both Sensex and Nifty ending near their intraday high points. The start of the day was on a strong note, as traders took encouragement with the Ministry of Finance’s statement that the Indian economy is well prepared to handle any capital outflows caused by external shocks. In its Monthly Economic Review report released the finance ministry's Department of Economic Affairs said India has adequate foreign exchange reserves to absorb the risks posed by the uncertain geopolitical environment.

Traders took some support with Minister of State for Finance Bhagwat Karad stating that banks have effected an aggregate recovery of Rs 7.34 lakh crore, in non-performing assets and written-off loan accounts, including those reported as fraud during the past six financial years and the first six months of the current financial year (FY22). Meanwhile, Finance Minister Nirmala Sitharaman said that Rs 96,756 crore had been disbursed to states as goods and service tax (GST) compensation, but Rs 53,611 crore was still pending.

Firm trade continued over the Dalal Street, as Food and Consumer Affairs Minister Piyush Goyal said the government intends to decriminalise the Legal Metrology Act and asked his department as well as states to take a decision on this issue at the earliest in order to stop harassment of small shopkeepers. Traders took note of report that the government said it is keeping a close watch on evolving geopolitical developments and would make calibrated interventions to keep fuel prices under control to safeguard the interest of the common man.

On the global front, European markets were trading higher amid investors awaited the U.S. Federal Reserve's interest rate decision. Asian markets ended higher on Wednesday, after South Korea's unemployment rate declined in February. The data from Statistics Korea showed that the jobless rate fell to a seasonally adjusted 2.7 percent in February from 3.6 percent in January. In the same month last year, the unemployment rate was 3.9 percent.

The BSE Sensex ended at 56816.65, up by 1039.80 points or 1.86% after trading in a range of 56389.26 and 56860.89. There were 28 stocks advancing against 2 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.80%, while Small cap index up by 1.47%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.66%, Metal up by 2.56%, Basic Materials up by 2.55%, Oil & Gas up by 2.18% and Consumer Durables up by 2.13%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Ultratech Cement up by 4.69%, Axis Bank up by 3.65%, Indusind Bank up by 3.35%, HDFC up by 2.92% and Infosys up by 2.69%. On the flip side, Sun Pharma down by 0.35% and Power Grid down by 0.07% were the only losers. (Provisional)

Meanwhile, a day after the RBI announced ‘Master Direction - Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022’, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the key changes in the final regulations for microfinance institutions (MFIs) will bring in the entire industry under the regulatory coverage unlike one-third of the industry coverage earlier.

As per the report, the ability of small and mid-sized MFIs players to implement risk-based pricing would enable building both scale and operating buffers, resulting in improved credit worthiness in the eyes of lenders. This is in line with the agency’s FY23 Outlook: Microfinance where it had said that the viability of the small-medium MFIs could improve post the implementation of the proposed harmonisation guidelines. The rating agency also said that the notification is also expected to improve the ability of non-bank finance company (NBFC)-MFIs to penetrate into newer geographies, as pricing can now be differentiated, and cover the higher operating costs for the same.

Meanwhile, the key changes in the final regulations include the widening of the definition of regulated entities to include commercial banks, co-operative banks, district/state central co-operative banks, NBFC-MFIs, NBFC housing finance companies (HFCs), as well  as the removal of pricing caps.

The CNX Nifty ended at 16975.35, up by 312.35 points or 1.87% after trading in a range of 16837.85 and 16987.90. There were 46 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 4.73%, Axis Bank up by 3.68%, Indusind Bank up by 3.57%, Shree Cement up by 3.49% and Bajaj Auto up by 3.35%. On the flip side, Cipla down by 1.15%, Sun Pharma down by 0.27%, Power Grid down by 0.14% and Tata Consumer Products down by 0.10% were the only losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 103.02 points or 1.44% to 7,278.72, France’s CAC increased 154.90 points or 2.44% to 6,509.90 and Germany’s DAX was up by 376.32 points or 2.7% to 14,293.59.

Asian markets ended higher on Wednesday following a senior Chinese official said Beijing would provide more support for the slowing economy. Further, Sentiments were also supported by a retreat in commodity prices and hopes for a possible diplomatic solution to end the war in Ukraine. Ukrainian President said that the positions of Ukraine and Russia at peace talks were sounding more realistic but more time was needed.  Meanwhile, Investors also awaited a widely anticipated rate decision by the U.S. Federal Reserve later in the day amid the Russia-Ukraine crisis. The U.S. central bank likely to raise its key short-term rate by 0.25 percentage points, marking the first increase since 2018. South Korea's Kospi average gained snapping a three-day losing streak as traders tracked the latest geopolitical developments. Electronics, chemical and automobile companies topped the gainers list.