Domestic indices trade in fine-fettle in early deals

Indian equity benchmarks made gap-up opening on Monday amid mixed Asian cues. Markets are trading in fine-fettle in early deals with gains of over one and half a percent each. Investors are eyeing Manufacturing PMI data to be out later in the day. Sentiments got boost as Niti Aayog Vice Chairman Rajiv Kumar said India is on the cusp of a major economic recovery and talks of possible stagflation are overhyped as a strong economic foundation is being laid with the reforms carried out by the government over the last seven years. Adding more optimism, the Finance Ministry said Gross GST collection in March touched an all-time high of over Rs 1.42 trillion. Some support also came in as the Commerce and Industry Ministry said India's merchandise exports spurt to a record high of $418 billion in the 2021-22 fiscal on higher shipments of petroleum products, engineering goods, gem and jewellery and chemicals.

Most of the Asian markets are trading higher in thin trade following the broadly positive cues from Wall Street on Friday. Meanwhile, traders continue to monitor the lingering geopolitical situation amid the continued escalation of the Russia-Ukraine crisis and the related increasing sanctions on Russia. China is closed for the Qingming Festival and Taiwan is closed for Children's Day. Back home, Fertiliser stocks were in focus as Fertiliser companies have started passing on a portion of rising input costs to the farmers. In scrip specific developments, HDFC and HDFC Bank rallied as they announced a transformational merger. HDFC will own 41 percent in HDFC Bank.

The BSE Sensex is currently trading at 60394.64, up by 1117.95 points or 1.89% after trading in a range of 59760.22 and 60444.03. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.72%, while Small cap index was up by 1.20%.

The top gaining sectoral indices on the BSE were Bankex up by 2.37%, Telecom up by 1.18%, Capital Goods up by 0.88%, Industrials up by 0.84%, Utilities up by 0.77%, while TECK down by 0.09% was the sole losing index on BSE.

The top gainers on the Sensex were HDFC up by 12.48%, HDFC Bank up by 9.49%, Bajaj Finance up by 1.49%, Bajaj Finserv up by 1.12% and Larsen & Toubro up by 0.85%. On the flip side, Infosys down by 0.96%, Maruti Suzuki down by 0.47%, Mahindra & Mahindra down by 0.34%, ITC down by 0.16% and TCS down by 0.11% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, Niti Aayog Vice Chairman Rajiv Kumar has said that the country is on the cusp of a major economic recovery and talks of possible stagflation are ‘overhyped’ as a strong economic foundation is being laid with the reforms carried out by the government over the last seven years. Notwithstanding economic uncertainties triggered by the Russia-Ukraine war that is also impacting global supply chains, Kumar asserted that it was quite clear from all accounts that India will remain the fastest growing economy in the world.

He said ‘given all the reforms that we have done in the last seven years, and given that we are seeing the end of the COVID-19 pandemic hopefully, and the 7.8 per cent rate of growth that we will get this year (2022-23), a very strong foundation is now being laid for further rapid increase in economic growth in the coming years’. He acknowledged that because of the Russia-Ukraine war, India’s GDP growth projection could be revised. He added that ‘But even then, India will remain the fastest growing economy and all the other economic parameters are actually quite within the range’.

On rising inflation, the Niti Aayog Vice Chairman said that RBI is keeping a close watch as per its mandate. He said ‘I am sure that the RBI is well in control of it (inflation) and will take the necessary steps if and when required’. Regarding concerns over possible risk of stagflation, he said the Indian economy is projected to grow 7.8 per cent in the current fiscal and this is nowhere near the definition of stagflation. he emphasized ‘I think this has been overhyped, because when you talk about stagflation, we talk about growth rates which are much below your rate of growth or potential output, which is not true at all for this time’.

Regarding high petrol and diesel prices, Kumar said that given the global situation, fuel prices are rising across the world. He said ‘In the past, the government had taken steps to reduce the tax burden. And I think, it’s time now for the states to come forward if they feel that this is required to be done’. He asserted in any case, the government keeps a close watch on prices of all commodities including fuel and will take steps as necessary. Rates of petrol and diesel are rising, and vary from state to state depending upon the incidence of local taxation.

The CNX Nifty is currently trading at 17972.40, up by 301.95 points or 1.71% after trading in a range of 17791.40 and 17983.10. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were HDFC up by 12.06%, HDFC Bank up by 9.16%, HDFC Life Insurance up by 6.80%, Hero MotoCorp up by 2.05% and Bajaj Finance up by 1.89%. On the flip side, ONGC down by 1.28%, Infosys down by 1.00%, Maruti Suzuki down by 0.69%, Mahindra & Mahindra down by 0.22% and Grasim Industries down by 0.17% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 advanced 45.38 points or 0.16% to 27,711.36, Straits Times rose 5.05 points or 0.15% to 3,424.16, Hang Seng jumped 274.31 points or 1.24% to 22,313.86 and KOSPI added 10.09 points or 0.37% to 2,749.94, while Jakarta Composite was down by 2.70 points or -0.04% to 7,076.06.