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Indian equity benchmarks bounced back and ended the Thursday’s trade with gains of around a percent, following strong global sentiments. After opening in the green, benchmark indices maintained the lead. Traders took encouragement as Moody's Investors Service has said it will upgrade the country’s rating if there is an increase in growth potential and sustained decline in government debt. The rating agency had raised India's sovereign rating outlook to 'stable', from 'negative', while affirming the 'Baa3' rating - which is the lowest investment grade, just a notch above junk status. Support also came with World Bank stating that the increasing pace of vaccinations will determine India’s economic prospects this year and beyond while leaving the growth projection for the country unchanged at 8.3% from its June forecast. Traders also took a note of Finance Minister Nirmala Sitharaman’s statement that India is very close to arriving at the specifics of the two-pillar taxation proposition at the G20 and is in the last stage of finalising the details. A total of 130 countries had in July agreed to a overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate.

Sentiments remained positive, as Chief Economic Adviser K V Subramanian said the impact of 'taper tantrum' or withdrawal of monetary stimulus by the US Federal Reserve on India may not be much given the strong fundamentals of the country's economy. Traders remain energized after bank credit rose by 6.67 per cent to Rs 109.57 lakh crore and deposits by 9.34 per cent to Rs 155.95 lakh crore in the fortnight ended September 24, 2021. In the previous fortnight ended September 10, 2021, bank credit had risen by 6.7 per cent and deposits by 9.32 per cent. Meanwhile, emphasizing the importance of multi-lateral organisations, Commerce and Industry Minister Piyush Goyal has called for strengthening of global institutions like the World Trade Organisation (WTO) and said everybody has to work towards a better future of these bodies.

On the global front, Asian markets settled mostly higher on Thursday, while European markets were trading higher, after news emerged that U.S. Congressional Democrats and Republicans could reach a deal to raise the debt limit by a certain level that could tide the Treasury over until December. Investor sentiment was also underpinned amid reports that the United States and China have agreed in principle for their presidents to hold a virtual meeting before the end of the year. U.S. Secretary of State Antony Blinken said that the U.S. is looking to China to act responsibly and to deal effectively with any challenges. Back home, on the sectoral front, textile industry stocks were buzzing as the Union Cabinet approved the setting up of 7 Mega Integrated Textile Region and Apparel parks with a total outlay of Rs 4,445 crore for five years to position India strongly on the global textiles map. Stocks related to telecom sector too were in limelight as the government allowed 100 per cent foreign direct investment in the telecom sector through automatic route to promote ease of doing business in the industry.

Finally, the BSE Sensex rose 488.10 points or 0.82% to 59,677.83 and the CNX Nifty was up by 144.35 points or 0.82% to 17,790.35.       

The BSE Sensex touched high and low of 59,914.91 and 59,597.06, respectively and there were 20 stocks advancing against 10 stocks declining on the index.       

The broader indices ended in green; the BSE Mid cap index rose 1.68%, while Small cap index was up by 1.38%.

The top gaining sectoral indices on the BSE were Realty up by 6.03%, Consumer Durables up by 5.82%, Auto up by 4.46%, Consumer Disc up by 3.48%, Industrials up by 1.82% while, Oil & Gas down by 0.54% and Telecom down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 10.69%, Mahindra & Mahindra up by 5.32%, Maruti Suzuki up by 4.04%, Indusind Bank up by 3.02% and Sun Pharma up by 2.78%. On the flip side, Dr. Reddy's Lab down by 1.31%, HDFC down by 0.71%, Nestle down by 0.64%, Bajaj Finserv down by 0.59% and Hindustan Unilever down by 0.51% were the top losers.

Meanwhile, expressing optimism over India’s rating, Moody's Investors Service has said it will upgrade the country’s rating if there is an increase in growth potential and sustained decline in government debt. The rating agency had raised India's sovereign rating outlook to 'stable', from 'negative', while affirming the 'Baa3' rating - which is the lowest investment grade, just a notch above junk status. Moody's Investors Service Senior Vice President, Sovereign Risk Group, Christian de Guzman said that the 'stable' outlook reflects the view that it would take about 12-18 months for Moody's to upgrade India's sovereign rating.

Guzman said ‘We have stated that an increase in India's growth potential - which has eroded in recent years - and a sustained decline in the government debt burden along with a concurrent improvement in debt affordability could lead to an upgrade. Our stable outlook reflects the view that these triggers will not be met over the next 12 to 18 months’. While affirming sovereign rating, Moody's had said that a recovery is underway in the Asia's third-largest economy with downside risks to growth from subsequent coronavirus infection waves getting mitigated by rising vaccination rates.

Moody's expects India's real GDP to surpass 2019 levels this fiscal year (April 2021 to March 2022), rebounding to a growth rate of 9.3 per cent followed by 7.9 per cent in the next financial year. The Indian economy contracted 7.3 per cent in last fiscal ended March 31, 2021. The US-based rating firm had in 2020 lowered India's rating from 'Baa2', with a 'negative' outlook saying there would be challenges in policy implementation amid low growth and deteriorating fiscal position.

The CNX Nifty traded in a range of 17,857.55 and 17,763.80 and there were 33 stocks advancing against 17 stocks declining on the index. 

The top gainers on Nifty were Tata Motors up by 12.63%, Titan Company up by 10.54%, Mahindra & Mahindra up by 4.93%, Maruti Suzuki up by 4.11% and Eicher Motors up by 3.17%. On the flip side, ONGC down by 4.46%, Dr. Reddy's Lab down by 1.30%, Coal India down by 0.96%, Divi's Laboratories down by 0.81% and Britannia Industries down by 0.78% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 72.85 points or 1.04% to 7,068.72, France’s CAC increased 90.14 points or 1.39% to 6,583.26 and Germany’s DAX increased 191.75 points or 1.28% to 15,165.08.

Asian markets settled mostly higher on Thursday amid easing concerns over the debt ceiling in Washington after reports that US Congressional Democrats and Republicans could reach a deal to raise the debt limit by a specific amount that would be sufficient to tide the Treasury over until December. Hong Kong shares gained with major property developer stocks leading gains following a promise from the city’s leader in her annual policy address to build hundreds of thousands of new homes. Meanwhile, Chinese market was closed for Golden Week holidays.

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