Indian equity benchmarks snapped their two-day losing streak and ended Friday's session with over one percent gains each amid healthy buying in metal, consumer durables, telecom and basic materials stocks. The benchmarks staged a gap up opening and stayed in green for whole day, on the back of strong global cues. Traders took some encouragement with CARE Ratings’ report that Indian economy will grow in the range of 11-11.2 per cent in the coming financial year. It said the high Gross Domestic Product (GDP) growth in FY22 will be on the back of low base effect in FY21 and broad-based recovery across the economy. Some support also came with Reserve Bank of India (RBI) Governor Shaktikanta Das expressed confidence that the second wave of Covid infections will not derail India’s economic journey. Market participants also took a note of former RBI Governor D Subbarao stating that inflation targeting has worked well and the government must stay with it, and the framework is going to work well in the period ahead also. He also said low inflation contributes to sustainable growth.
The markets extended early gains in late afternoon session, as sentiments remained up-beat with the International Monetary Fund (IMF) stating that India's economy is on the path of gradual recovery, real GDP growth, return to positive territory in fourth quarter of 2020. And that's for the first time actually since the start of the pandemic and it's supported by a pickup in gross, fixed capital formation. Some optimism also came with Chief Economic Advisor K V Subramanian’s statement that the investment climate is going well in India and the private sector should skill their workforce in the interest of its business. Traders also remain energized amid reports that as part of furthering the ease of doing business in the country, the government is set to introduce a single-window clearance mechanism for investors by mid-April in order to attract greater foreign investment.
On the global front, European markets were trading higher as strong U.S. economic data and progress on vaccination rollouts helped support hopes of economic recovery. Underlying sentiment remained cautious amid rising Covid-19 cases across the continent, with the European Commission warning that the European Union is at the start of a third wave of the pandemic. Asian markets ended in green on Friday amid economic optimism as U.S. President Joe Biden pledged to double his administration's vaccination rollout plan and the Federal Reserve reiterated that its expansive monetary policy would not come until a full recovery from the pandemic. Back home, on the sectoral front, coal stocks were in focus amid report that the Centre has launched the second tranche of commercial coal auction after 19 mines were awarded in the first round in November 2020. Telecom stocks were in limelight as Telecom Regulatory Authority of India (TRAI) secretary S.K Gupta said India is poised to play a decisive role in the new era of 5G, given inherent strengths in digital and software capabilities, while liberal FDI regime, progressive manufacturing programmes, and resolve for self-reliance would usher large investments and growth in the telecom market.
Finally, the BSE Sensex rose 568.38 points or 1.17% to 49,008.50, while the CNX Nifty was up by 182.40 points or 1.27% to 14,507.30.
The BSE Sensex touched high and low of 49,234.66 and 48,699.91, respectively. There were 26 stocks advancing against 4 stocks declining on the index.
The broader indices ended in green; the BSE Mid cap index rose 1.66%, while Small cap index was up by 1.08%.
The top gaining sectoral indices on the BSE were Metal up by 3.49%, Consumer Durables up by 2.76%, Telecom up by 2.24%, Basic Materials up by 1.85% and FMCG up by 1.76%, while there were no losing sectoral indices on the BSE.
The top gainers on the Sensex were Bajaj Finserv up by 4.49%, Asian Paints up by 4.28%, Titan Company up by 4.06%, Hindustan Unilever up by 3.45% and Bajaj Auto up by 2.82%. On the flip side, Power Grid down by 0.97%, Indusind Bank down by 0.58%, ITC down by 0.17% and Maruti Suzuki down by 0.01% were the top losers.
Meanwhile, CARE Ratings has said that Indian economy will grow in the range of 11-11.2 per cent in the next financial year (FY22). It stated the high Gross Domestic Product (GDP) growth in FY22 will be on the back of low base effect in FY21 and broad-based recovery across the economy. Further it added Progress in tax collections will be critical factor in realising this growth as any downside risk to Gross Value Added (GVA) would impact taxes and, in turn, GDP growth.
It mentioned recovery is broad based across sectors but at varying speed as the services sector in particular still operates with significant restrictions which look unlikely to be fully eased through the first half of FY22. The recovery in the economy will also be aided by the vaccination drive which has been witnessed in the country and the sustained pace of vaccination and coverage of more age-groups is required to speed up the process. Although the second COVID-19 wave has raised the possibility of lockdown, the restrictions are expected to be less potent than those seen during FY21.
Besides, it estimated GVA to grow at 10.2 per cent in FY22 over (-) 6.5 per cent in FY21. This estimate is based on the normal monsoon assumption which will result in stable agricultural output. Any deviation here will change the overall estimate. As per its estimates, agriculture will grow at 3.5 per cent during FY22 on steady kharif and rabi harvests. Both industrial and services sectors will record 11.6 per cent growth. The industrial sector will witness buoyancy with mining, manufacturing and construction registering double-digit growth rates over negative growth in FY21. All three segments under services sector - trade, hotels, transport, storage, communication; financial, real estate and prof services; and public administration, defence and other - are expected to register double-digit growth.
The CNX Nifty traded in a range of 14,572.90 and 14,414.25. There were 43 stocks advancing against 6 stock declining, while 1 stock remain unchanged on the index.
The top gainers on Nifty were Tata Steel up by 5.89%, Bajaj Finserv up by 4.45%, Titan Company up by 3.99%, Tata Motors up by 3.97% and Asian Paints up by 3.96%. On the flip side, Power Grid down by 1.39%, UPL down by 1.28%, Eicher Motors down by 0.84%, ITC down by 0.33% and Indusind Bank down by 0.19%.
European markets were trading higher; UK’s FTSE 100 increased 40.10 points or 0.6% to 6,714.93, France’s CAC rose 16.26 points or 0.27% to 5,968.67 and Germany’s DAX was up by 93.63 points or 0.64% to 14,714.99.
Asian markets ended in green on Friday in tandem with rise in US stocks with the upbeat labor report, pause in crude oil rally, faster vaccine rollout, and end to some restrictions in bank, reinforced economic rebound optimism boosting the market sentiments. China, Hong Kong and Japan were major gainers of the day. As per reports, China's Shanghai rebounded from its previous session's three month lower rate, boosted by beaten down consumer firms and strong foreign inflows. Though the Sino-Western confrontation has dulled the market.
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