Domestic indices trade in fine-fettle in early deals

Indian equity benchmarks extended their previous session’s gains with optimistic start on Friday mirroring firm cues from global markets. Domestic indices are trading in fine-fettle in early deals with gains of over 0.80% each on account of board based buying in IT, TECK and Telecom stocks, which are trading higher with gains of over 1% each. Some support came in as economic research think-tank Centre for Monitoring Indian Economy (CMIE) has estimated that labour participation rate (LPR) was higher in rural India during the period January to April 2022. LPR, defined as the number of persons of the labour force employed as a percentage of working age population, is 40.9 in rural India as compared to 37.4 in urban India during the period January to April 2022. Traders took note of a private report that the Reserve Bank will opt for a larger, 0.50 per cent, hike in key rates at its next monetary policy review in June to protect medium term economic stability in face of the uncomfortable inflation situation. Besides, the government has waived late fees for two months till June for delayed filing of GST returns for financial year 2021-22 by small taxpayers registered under the composition scheme.

Global cues remained supportive with all the Asian markets are trading higher following the broadly positive cues from Wall Street overnight, with technology and energy stocks boosting the markets. Traders also continued to pick up stocks at relatively reduced levels following recent weakness. Besides, overall consumer prices in the Tokyo region of Japan were up 2.4 percent on year in May, the Ministry of Internal Affairs and Communications said.

Back home, paper industry stocks were in focus as in a bid to protect the domestic paper industry, the commerce and industry ministry said it has decided to make registration compulsory for importing major paper products such as newsprint, handmade paper, envelopes, among others. In stock specific movements, Hindalco gained after its Q4 consolidated net profit doubled year-on-year. Bharti Airtel rose as Moody's upgraded ratings on the company's senior unsecured debt.

The BSE Sensex is currently trading at 54705.52, up by 452.99 points or 0.83% after trading in a range of 54593.38 and 54791.78. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.25%, while Small cap index was up by 1.60%.

The top gaining sectoral indices on the BSE were IT up by 1.87%, TECK up by 1.62%, Telecom up by 1.51%, Industrials up by 1.33%, Basic Materials up by 1.32%, while Oil & Gas down by 0.22%, Energy down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.98%, Indusind Bank up by 2.57%, HCL Technologies up by 2.48%, Tech Mahindra up by 2.45% and Bajaj Finserv up by 2.26%. On the flip side, Nestle down by 0.93%, Asian Paints down by 0.82%, NTPC down by 0.81%, Power Grid down by 0.66% and Reliance Industries down by 0.26% were the top losers.

Meanwhile, in a bid to push public expenditure, the government has relaxed norms for ministries and department to utilise unspent amounts in the subsequent quarter in the same financial year. Ministries or departments are now permitted to utilise the unspent balances from Quarterly Expenditure Plan (QEP) for the first and second quarter within a financial year under intimation to the Budget Division for cash management purposes. Unspent balances from QEP-2 and QEP-3 may be utilised in QEP-3 and QEP-4 respectively only after formal and prior approval of the Expenditure Secretary has been obtained.

According to an office memorandum issued by the Budget Division of the Finance Ministry, ‘Ministry/Department should not under any circumstance presume prior approval of Expenditure Secretary. This has to be formally obtained prior to utilising the unspent balances. Seeking post facto approval is not an option’. No more than 33 per cent and 15 per cent of expenditure of the Budget Estimates during a financial year would be permissible in the last quarter and last month of the financial year, respectively. It also advised all Financial Advisers to ensure that Monthly Expenditure Plan or Quarterly Expenditure Plan (MEP/QEP) tracking of sanctions and concurrent expenditure against Budget provisions are available.

The government has laid emphasis on capital expenditure to push growth hit by the pandemic. It is expected that the increase in public spending would crowd in private investment. Finance Minister Nirmala Sitharaman raised capital expenditure (capex) by 35.4 per cent for the financial year 2022-23 to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-battered economy. The capex last year was Rs 5.5 lakh crore. The spending on building multimodal logistics parks, metro systems, highways, and trains is expected to create demand for the private sector as all the projects are to be implemented through contractors.

The CNX Nifty is currently trading at 16309.05, up by 138.90 points or 0.86% after trading in a range of 16275.30 and 16329.35. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.47%, Bajaj Finserv up by 2.53%, Indusind Bank up by 2.41%, HCL Technologies up by 2.37% and Tech Mahindra up by 2.35%. On the flip side, ONGC down by 3.88%, NTPC down by 1.10%, Apollo Hospital down by 1.05%, Britannia Industries down by 0.84% and Power Grid down by 0.79% were the top losers.

All the Asian markets are trading in green; Nikkei 225 surged 163.72 points or 0.62% to 26,768.56, Straits Times added 15.64 points or 0.49% to 3,224.82, Hang Seng jumped 565.67 points or 2.81% to 20,681.87, Taiwan Weighted soared 282.20 points or 1.77% to 16,251.03, KOSPI rose 24.82 points or 0.95% to 2,637.27, Jakarta Composite advanced 109.96 points or 1.60% to 6,993.46 and Shanghai Composite was up by 16.33 points or 0.52% to 3,139.44.