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Benchmarks likely to make optimistic start

Indian equity benchmarks ended higher with gains of around one percent on Wednesday. Today, the start of session is likely to be positive. Some support will come with Chief Economist of the International Monetary Fund (IMF) Gita Gopinath’s statement that the Reserve Bank of India (RBI)’s quantitative easing measures are a welcome move. Gopinath also said that this fiscal stance is also appropriate for India overall and that it is good that support isn’t being pulled back. She added there is evidence of normalisation of economic activities in India. Traders will also be getting some support on report stating that growth is of paramount importance now, the Reserve Bank of India said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy.  Meanwhile, the Reserve Bank of India’s decision to continue with the accommodative policy stance is reassuring to the industry and trade, according to chambers. Industry body Assocham said that this decision would also get immense support from a slew of other critical measures announced by the central bank. It added that the steps enumerated by RBI Governor Shaktikanta Das to ensure domestic financial stability in the wake of volatility in the global financial markets, as was seen in the rising bond yields. Ficci said that the status quo with regard to the repo rate was anticipated given the inflation concern. However, it said the bias indicated by the Central Bank towards maintaining an accommodative stance is reassuring. It added that the fresh surge in COVID infections is worrying and the imposition of local lockdowns can undermine the recovery prospects over the near term.  Trades may take note of report that the Reserve Bank of India announced an extension of interim ways and means advances (WMAs) limit of Rs 51,560 crore to state governments till September, to help them tide over the financial stress posed by the second wave of COVID-19. However, there may be some cautiousness as India has recorded a massive surge of 126,315 Covid-19 cases in the last 24 hours. With this, India has seen the biggest-ever daily surge, taking the tally to 12,926,061, Worldometer showed. Active cases have crossed the 900,000-mark and now stand at 910,264. India is now the 4th-worst hit country in terms of active cases. India also witnessed a grim record of second-most fatalities due to covid-19 in a single day in 2021, which stood at 684. The death toll from the deadly infection stands at 166,892. Maharashtra reported 59,907 new Covid-19 cases in highest ever single-day spike. The state also reported the highest single-day death count due to coronavirus since the beginning of the pandemic with 322 fatalities.

Asian markets are trading mixed in early deals on Thursday. The US markets ended mostly higher on Wednesday as minutes from the Federal Reserve’s last meeting showed the central bank’s commitment to accommodative policy in order to support a full economic recovery. 

Back  home, Indian equity benchmarks ended higher with gains of around a percent on Wednesday led by gains in Auto, Telecom and Banking stocks. Markets made a positive start, as sentiments got boost on report that the International Monetary Fund (IMF) has raised its projection for India’s economic growth in the current financial year by one percentage point to 12.5 per cent. The forecast, published in the IMF’s World Economic Outlook, suggests India would again become the fastest-growing large economy in the world. In fact, India is the only country among major world economies that is projected to grow at a double-digit rate during FY22. China comes closest, with a forecast of 8.4 per cent economic expansion. Equity benchmarks added gains in morning deals, after the Reserve Bank of India (RBI) expectedly left interest rates unchanged at 4 percent and maintained an accommodative policy stance to nurture a fragile economic recovery after the three-day meeting of its monetary policy committee (MPC). This came amid a sharp new wave of Covid-19 cases in several states and local lockdowns, reigniting uncertainty regarding economic outlook in the immediate term. The FY22 growth projection was also maintained at 10.5 per cent.  Firm trade continued in late afternoon deals, even after India's services sector activities eased in March as growth was hit by the detrimental impact of the coronavirus pandemic and input costs remained elevated. The seasonally-adjusted India Services Business Activity Index fell from 55.3 in February to 54.6 in March. Though the rates of expansion softened, it indicated growth for the sixth consecutive month. In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction. Meanwhile, the Finance Ministry said banks and financial institutions have sanctioned Rs 14.96 lakh crore to over 28.68 crore beneficiaries in the last six years. Pradhan Mantri MUDRA Yojana (PMMY) was launched by Prime Minister Narendra Modi on April 8, 2015 to promote entrepreneurship. Finally, the BSE Sensex rose 460.37 points or 0.94% to 49,661.76, while the CNX Nifty was up by 135.55 points or 0.92% to 14,819.05. 

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