Benchmarks extend gains for third straight session

Indian equity benchmarks extended their gains for the third straight session on Wednesday amid buying in index major Power Grid Corporation, Indusind Bank and Nestle India. Indian markets opened lower, as rising recession fears in the United States offset cautious optimism in domestic markets in a busy earnings week. Some cautiousness came in as the finance ministry in its Monthly Economic Review for March said that India’s economy continues to be robust, but downside risks such as rising crude oil prices, adverse weather conditions, and the global banking crisis outweigh the upside potential in gross domestic product (GDP) growth in the current financial year (FY24). Some anxiety also came with provisional data from National Stock Exchange showing that foreign institutional investors (FII) sold shares worth Rs 407.35 crore on April 25.

However, markets soon erased losses and managed to trade in green in late morning deals as traders took some support with Deepak Sood, Secretary General at ASSOCHAM stating that private investment is picking up in sectors like infrastructure, green energy and electronics. He also said quicker execution of the projects in the railways, ports, airports and highways, as was witnessed in 2022-23, would make a difference in creating a positive spiral for the private investment to crowd in. Benchmarks extended their gains in late afternoon deals as positive Q4 results led to broad-based gains across sectors. Sentiments remained positive as the Finance Ministry in its monthly economic review said that India’s banking system is ‘strong enough to survive’ stress caused by interest rates increasing and it will continue aiding economic growth.

On the global front, European markets were trading lower as weak U.S. data stoked recession fears. Upbeat German consumer confidence data as well as encouraging earnings updates from both Microsoft and Alphabet helped limit regional losses to some extent. Asian markets closed mostly lower on Wednesday following the negative cues from Wall Street overnight and reflecting renewed concerns about turmoil in the banking sector after First Republic reported a loss of more than $100 billion in deposits in the first quarter. Disappointing results from several other US companies also hurt sentiment.

Finally, the BSE Sensex rose 169.87 points or 0.28% to 60,300.58 and the CNX Nifty was up by 44.35 points or 0.25% to 17,813.60.

The BSE Sensex touched high and low of 60,362.79 and 59,954.91, respectively. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Realty up by 1.30%, Capital Goods up by 1.00%, Telecom up by 0.88%, Power up by 0.87% and Industrials up by 0.71%, while Metal down by 0.53%, Oil & Gas down by 0.16%, Energy down by 0.06% and Healthcare down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.49%, Indusind Bank up by 1.49%, Nestle up by 1.38%, Larsen & Toubro up by 1.21% and HCL Technologies up by 1.11%. On the flip side, Bajaj Finserv down by 0.84%, NTPC down by 0.70%, Reliance Industries down by 0.55%, Kotak Mahindra Bank down by 0.53% and Bajaj Finance down by 0.39% were the top losers.

Meanwhile, the finance ministry has said personal income tax as a percentage of Gross domestic product (GDP) has gone up from 2.11 per cent in 2014-15 to 2.94 per cent in 2021-22 fiscal, indicating that taxpayer base is widening as a result of the steps taken by the present government led by Prime Minister Narendra Modi.  The personal income tax collection (including Securities Transaction Tax) increased to over Rs 6.96 lakh crore, from over Rs 2.65 lakh crore in 2014-15.

The ministry said Introduction of new data sources in Statement of Financial Transactions (SFT) like dividend and interest; securities; mutual funds and information from GSTN in recent years has led to 1,118 per cent increase in reported information. This has resulted in addition of information of about 3 crore persons.

Moreover, it said introduction of new tax deducted at source (TDS) codes, which have almost doubled from 36 to 65 in last eight years, led to increase in total reported transaction in FY 2021-22 to 144 crore as compared to the number of reported transactions in FY 2015-16 of 70 crore. This has resulted in doubling of the number of unique deductees from 4.8 crore (in 2015-16) to 9.2 crore (in 2021-22).

The CNX Nifty traded in a range of 17,827.75 and 17,711.20. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 2.62%, Tata Consumer Products up by 1.51%, Nestle up by 1.47%, Indusind Bank up by 1.45% and SBI Life Insurance up by 1.37%. On the flip side, Hindalco down by 1.13%, Adani Ports & SEZ down by 1.08%, Bajaj Auto down by 0.98%, Bajaj Finserv down by 0.80% and NTPC down by 0.67% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 31.75 points or 0.4% to 7,859.38, France’s CAC fell 80.49 points or 1.08% to 7,451.12 and Germany’s DAX lost 116.62 points or 0.74% to 15,755.51.

Asian markets closed mostly lower on Wednesday tracking Wall Street’s overnight fall after US Consumer confidence worsened more than expected in April, while weak results from First Republic Bank also fuelled concerns about the health of the US banking sector. Japanese shares declined marginally ahead of Friday's interest rate decision from the Bank of Japan, while looming recession fears also dampened sentiments. Investors were awaiting upcoming US GDP data and PCE inflation for additional clues on the Federal Reserve's interest rate outlook. Meanwhile, Chinese shares finished almost flat ahead of Golden Week holiday.