Published on 13/10/2021 4:52:34 PM | Source: Accord Fintech

Benchmarks settle at record close for third straight session

Posted in Market Outlook| #Market Outlook

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Indian equity benchmarks continued bulls run to end at a record close for the third straight session on Wednesday with Sensex ending near 60,750 level which Nifty above 18,150 mark for the first time ever led by buying across the sectors. Falling retail inflation and prospects of better corporate earnings are other key reasons driving markets. After opening in the green, benchmark indices continued to gain momentum, as investors react to positive macroeconomic data. India's consumer price inflation slowed more than expected in September, while industrial production grew in line with expectations in August. The consumer price index rose 4.35 percent year-on-year following a 5.30 percent in August. Street had forecast a 4.50 percent increase. Industrial production rose 11.9 percent year-on-year in August while market participants had forecast 12.0 percent increase.

Benchmarks maintained their upward momentum in late afternoon deals, taking support from Finance Minister Nirmala Sitharaman’s statement that India is looking at near close to double-digit growth this year and the country will be one of the fastest-growing economies. The minister also emphasized that she expects the economic growth next year to be in the range of 7.5-8.5 percent, which will be sustained for the next decade. Sentiments also remained up-beat as International Monetary Fund (IMF) said that India's economy, which contracted by 7.3 percent due to the COVID-19 pandemic, is expected to grow by 9.5 percent in 2021 and 8.5 percent in 2022. It also said India is doing well in terms of vaccinating its own people and this is certainly helpful in its economy. Meanwhile, Union Minister Narayan Rane exhorted MSME Ministry officials to brace up for enhancing the output of micro, small and medium enterprises sector, highlighting its potential to boost India's exports and GDP growth.

On the global front, Asian markets ended mostly higher on Wednesday, while European markets were trading mostly in green, after data showed Chinese export growth unexpectedly accelerated in September, providing some relief to those worried about a slowdown in the world's second-largest economy. However, a cautious undertone prevailed as traders’ awaited U.S. consumer price data due later in the day for clues on the Federal Reserve's interest-rate tapering outlook. Back home, on the sectoral front, fertilizer industry stocks were buzzing as the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved nutrient-based subsidy rates for phosphatic & potassic fertilisers for FY22. Net subsidy for the rabi season to be at Rs 28,665 crore. Stocks related to Aviation sector too were in focus as the Ministry of Civil Aviation, keeping in mind the passenger demand for air travel, announced that airlines can operate domestic flights without any capacity restriction from October 18 onwards. Telecom sector’s stocks also were in action as Industry body COAI said spectrum reforms notified by the government including removal of financial bank guarantee requirements, and scrapping of SUC for future auctions are ''welcome steps'' that would ease financial burden on operators.

Finally, the BSE Sensex rose 452.74 points or 0.75% to 60,737.05 and the CNX Nifty was up by 169.80 points or 0.94% to 18,161.75.       

The BSE Sensex touched high and low of 60,836.63 and 60,452.29, respectively and there were 21 stocks advancing against 9 stocks declining on the index.         

The broader indices ended in green; the BSE Mid cap index rose 1.56%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Auto up by 3.46%, Utilities up by 2.62%, Industrials up by 2.39%, Power up by 2.23% and Metal up by 1.49%, while Realty down by 0.15% was the lone losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.17%, Power Grid Corporation up by 3.41%, ITC up by 3.34%, Larsen & Toubro up by 2.34% and Tech Mahindra up by 2.09%. On the flip side, Maruti Suzuki down by 2.71%, Hindustan Unilever down by 1.05%, Nestle down by 0.64%, Axis Bank down by 0.35% and SBI down by 0.31% were the top losers.

Meanwhile, International Monetary Fund (IMF) has said that India's economy, which contracted by 7.3 percent due to the COVID-19 pandemic, is expected to grow by 9.5 percent in 2021 and 8.5 percent in 2022. India's growth projection released by the latest World Economic Outlook (WEO) remains unchanged from its previous WEO update of July this summer but is a three-percentage point in 2021 and 1.6 percentage point drop from its April projections. According to the latest WEO update, released ahead of the annual meeting of the IMF and the World Bank, the world is expected to grow at 5.9 per cent in 2021 and 4.9 per cent in 2022.

Gita Gopinath, Chief Economist of the IMF, said that compared to their July forecast, the global growth projection for 2021 has been revised down marginally to 5.9 percent and is unchanged for 2022 at 4.9 percent. However, this modest headline revision masks large downgrades for some countries. She said the outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. She also said the downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions.

Gopinath further said that partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices. Pandemic-related disruptions to contact-intensive sectors have caused the labour market recovery to significantly lag the output recovery in most countries. Observing that the dangerous divergence in economic prospects across countries remains a major concern, she said aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9 per cent in 2024.

The CNX Nifty traded in a range of 18,197.80 and 18,050.75 and there were 34 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.  

The top gainers on Nifty were Tata Motors up by 21.11%, Mahindra & Mahindra up by 5.18%, Tata Consumer Product up by 4.36%, ITC up by 3.98% and Power Grid Corporation up by 3.47%. On the flip side, Maruti Suzuki down by 2.58%, ONGC down by 2.17%, SBI Life Insurance down by 1.76%, Coal India down by 1.55% and Hindustan Unilever down by 1.06% were the top losers.

European markets were trading mostly in green; France’s CAC increased 19.31 points or 0.29% to 6,567.42 and Germany’s DAX increased 107.96 points or 0.71% to 15,254.83, while UK’s FTSE 100 decreased 11.03 points or 0.15% to 7,119.20.

Asian markets ended mostly higher on Wednesday after data showed Chinese exports hitting a record high in September despite power crunch that has disrupted supply. Meanwhile, investors are cautiously waiting for US consumer price data due later in the day for clues on the US central bank’s interest-rate tapering outlook. Chinese shares gained on positive exports data, but property developer Evergrande group’s debt woes and domestic power crunch continued to pressure market sentiment. Trading in Hong Kong’s stock market was suspended as a typhoon passed south of the city. However, Japanese shares declined on data showing Japan’s core machinery orders dropped unexpectedly in August. 


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