Benchmarks make gap-up opening of new series; trade in fine-fettle

Extending their previous session’s bull run, Indian equity benchmarks made gap-up opening to April Series amid positive global cues. Most of the Asian markets are trading higher following the broadly positive cues from global markets overnight, as easing concerns over turmoil in the banking sector helped reduce fears about risks to economic growth. Markets are trading in fine fettle in early deals on last trading session of the week as well as of financial year 2022-23 (FY23) with key gauges surpassing their crucial 17,250 (Nifty) and 58,600 (Sensex) levels on the back of buying interest of the foreign investors in the domestic equities. National Stock Exchange’s provisional data showed foreign institutional investors (FII) bought shares worth Rs 1,245.39 crore on March 29.

Sentiments got a boost as the World Bank said India’s potential growth could benefit from accelerated implementation of an already ambitious reform agenda. Adding more optimism, Commerce and Industry Minister Piyush Goyal said India was in the ‘bright spot’ amid a series of economic challenges faced by many countries. Also, traders are looking ahead to the Infrastructure output and current account data to be out later in the day.

Besides, India will unveil its much-awaited new Foreign Trade Policy 2023-28 on March 31, with a view to boost exports amid slowing global trade. In stock specific development, index heavyweight Reliance Industries jumped amid reports that the company called a shareholder meeting on May 2 to approve the demerger of its financial services business.

The BSE Sensex is currently trading at 58669.18, up by 709.09 points or 1.22% after trading in a range of 58273.86 and 58709.17. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.88%, while Small cap index was up by 1.49%.

The top gaining sectoral indices on the BSE were Utilities up by 1.64%, Telecom up by 1.59%, Energy up by 1.58%, Realty up by 1.40%, Oil & Gas up by 1.37%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Reliance Industries up by 3.28%, ICICI Bank up by 2.56%, HCL Technologies up by 2.10%, Nestle up by 2.09% and Tech Mahindra up by 1.46%. On the flip side, Sun Pharma down by 0.72%, Asian Paints down by 0.40%, ITC down by 0.31%, Ultratech Cement down by 0.23% and Titan Company down by 0.14% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran expressed optimism over India’s economic growth and said that the country’s economy is likely to grow at the rate of 6.5 per cent in the coming decade on the back of the turnaround in financial and investment cycle. He further said going forward, global exports growth volumes may be somewhat tepid in terms of their growth rates due to the kind of uncertainties the world is facing. He said ‘So, I think the restoration of the financial, credit and the investment cycle in the commercial sector and the real estate sector will probably see us growing on an average of six and a half per cent in the coming decade’.

Nageswaran attributed the slowdown in India’s economic growth just before COVID-19 pandemic to the classic financial cycle distress that India went through. He opined ‘If you look at data from 2012 onwards, so basically pre-pandemic period itself, we went through a period of classic financial cycle repair, credit cycle repair, which is what brought down a slowdown in the construction sector, and real estate sector’. According to him, in the second decade of the century, by the time India could start thinking of enjoying the repaired balance sheets, came the pandemic for two years. He said ‘And then came the commodity price shock and later came the interest rate shock in the second half of the 2022’, and added that so naturally, some of these things do induce uncertainty in the minds of private investors and they may be a little bit more cautious than they might have been.

Noting that developing countries including India, definitely need economic growth to finance their energy transition requirements, Nageswaran said without domestic savings, there is no question of adequacy of resources for financing energy transition. On production-linked incentive (PLI) scheme, the CEA said the exit clause is very important for any scheme. The government has announced PLI schemes for 14 sectors, including white goods, textiles and auto components. The objective of the PLI scheme is to make domestic manufacturing globally competitive, create global champions in manufacturing, boost exports and create jobs.

The CNX Nifty is currently trading at 17279.45, up by 198.75 points or 1.16% after trading in a range of 17204.65 and 17289.75. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.46%, ICICI Bank up by 2.66%, Hindalco up by 2.29%, Adani Enterprises up by 2.23% and Nestle up by 2.09%. On the flip side, Apollo Hospital down by 0.81%, Sun Pharma down by 0.80%, Asian Paints down by 0.45%, ITC down by 0.38% and Britannia Industries down by 0.26% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 310.59 points or 1.12% to 28,093.52, Hang Seng advanced 171 points or 0.83% to 20,480.13, Taiwan Weighted added 37.66 points or 0.24% to 15,887.09, KOSPI increased 25.59 points or 1.04% to 2,478.75, Shanghai Composite strengthened 7.06 points or 0.22% to 3,268.31 and Straits Times rose 6.56 points or 0.2% to 3,263.74, while Jakarta Composite was down by 1.41 points or 0.02% to 6,807.54.