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Indian equity benchmarks returned to the green zone after four days of losing streak and settled around a percent higher on Monday. Hopes of strong September quarter earnings, which will start with IT giant TCS, and continuation of dovish monetary policy from the Reserve Bank of India later in the week lifted investors' sentiment. Key gauges opened a day with good gap and managed to hold its bullish stream throughout the day, as sentiments got a boost with former Niti Aayog vice-chairman Arvind Panagariya’s statement that the fundamentals of the Indian economy are sound as the real GDP in Q3 and Q4 of FY21 already crossed the pre-pandemic level. Sentiments remained up-beat with report that corporate credit profiles showed strong improvement, with more rating upgrades than downgrades witnessed in the first half of the current fiscal, despite the severe second COVID wave. Traders also got encouragement with Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Government of India, Piyush Goyal’s statement that at a time when the whole world is coming together to recover from the pandemic and bring growth back on track, a resurgent India is ready to take on the responsibility of being the frontrunner in this revival process.

However, during the afternoon session markets pared gains, as some concern came with report that trade deficit spiked to almost $23 billion in September from $13.8 billion in the previous month, as imports surged at a much faster pace than exports, driven by elevated global crude oil prices and massive purchases of gold in the build-up to the festival season. But, markets continued their firm trade to end higher, as optimism remained among traders with Centre for Monitoring Indian Economy’s (CMIE) report stated that employment increased by 8.5 million in September, led by the salaried jobs category, as the unemployment rate declined to 6.9 per cent during the month. Some positivity also came from the Ministry of Commerce and Industry in its preliminary data has showed that India’s merchandise exports jumped 21.35% to $33.44 billion in September 2021 as compared to $27.56 billion in September 2020, mainly due to better performance by key sectors like engineering goods and petroleum products. Traders also found solace with the finance ministry stating that India's GST collection remained above Rs 1 lakh crore for the third month in a row at over Rs 1.17 lakh crore in September, raising expectations that the second half of the year will post higher revenues.

On the global front, Asian markets ended mostly lower on Monday as the fate of the Biden Administration's flagship spending bills remained unclear and the Evergrande debt crisis continued to cast doubt over China's economic growth. Traders also continued to express concerns that the coronavirus situation in the region and other countries, particularly in the U.S., could dent the pace of global economic recovery. European markets were trading higher, as Eurozone finance ministers will meet in Luxembourg later today, with matters including the EU's recovery plans as well as progress on the much-delayed banking union project on the agenda. Back home, on the sectoral front, sugar industry stocks were in focus as industry body ISMA said India's sugar export rose 20 per cent to an all-time high of 7.1 million tonne in the 2020-21 marketing year ended last month on the back of better demand and financial assistance from the government. Besides, stocks related to appliances, consumer electronics industry were in watch as industry body CEAMA President Eric Braganza said the Indian appliances and consumer electronics market is expected to grow more than two-folds in the next five to six years and reach up to Rs 2 lakh crore, helped by the growth of the economy and domestic market.

Finally, the BSE Sensex rose 533.74 points or 0.91% to 59,299.32 and the CNX Nifty was up by 159.20 points or 0.91% to 17,691.25.      

The BSE Sensex touched high and low of 59,548.82 and 58,952.11, respectively and there were 24 stocks advancing against 6 stocks declining on the index.       

The broader indices ended in green; the BSE Mid cap index rose 1.51%, while Small cap index was up by 1.71%.

The top gaining sectoral indices on the BSE were Metal up by 2.66%, Power up by 2.26%, Realty up by 2.25%, Basic Materials up by 2.07% and Industrials up by 1.83%, while Consumer Durables down by 0.10% was the lone losing index on BSE.

The top gainers on the Sensex were NTPC up by 4.08%, Bajaj Finserv up by 3.58%, SBI up by 2.50%, Bajaj Finance up by 2.29% and Tech Mahindra up by 2.00%. On the flip side, Bajaj Auto down by 0.75%, Hindustan Unilever down by 0.59%, Titan Company down by 0.42%, Nestle down by 0.32% and Kotak Mahindra Bank down by 0.24% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the higher-than-budgeted revenue collections, mostly higher tax devolution from the Centre, will help states reduce their market borrowing to Rs 7.6 lakh crore in FY22, which is 4.7 per cent lower than the year-ago level. It pointed out that this is because after the 12.6 percent contraction in the gross state development loan issuance to Rs 3.1 lakh crore in H1 of FY22.

The report said the RBI pegs the market borrowing of 26 states (other than Odisha and Tripura) and two Union territories at Rs 2 lakh crore, which is similar to the level in Q3 FY21. Factoring in its expectation of higher-than-budgeted central tax devolution in FY22, it projects the net state development loans (SDL) issuance at Rs 1.7 lakh crore in Q4 of FY22, which will be 15.3 per cent lower than Rs 2 lakh crore in Q4 of FY21.

Forecasting that gross SDL issuance will decline by 8.1 per cent in the first three quarters of FY22, the report said if the actual issuance of Rs 3 lakh crore in H1 added to the gross issues of Rs 2 lakh crore indicated for Q3, total issuance will contract by 8.1 lakh crore to Rs 5.1 lakh crore the first three quarters of FY22 from Rs 5.6 lakh crore in the same period last fiscal.

The CNX Nifty traded in a range of 17,750.90 and 17,581.35 and there were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 7.84%, Hindalco up by 4.60%, NTPC up by 4.00%, Bajaj Finserv up by 3.36% and Tata Motors up by 2.61%. On the flip side, Cipla down by 2.97%, Grasim Industries down by 2.28%, UPL down by 1.40%, Indian Oil Corporation down by 0.98% and Eicher Motors down by 0.77% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 14.35 points or 0.2% to 7,041.42, France’s CAC rose 10.82 points or 0.17% to 6,528.51 and Germany’s DAX was up by 10.03 points or 0.07% to 15,166.47.

Asian markets ended mostly lower on Monday as China Evergrande group’s debt crisis continued to cast doubt over China's economic growth, while Chinese markets were closed for the National Day holiday and South Korea for National Foundation Day. Also, the fate of the US Biden Administration's flagship spending bills remained unclear. Japanese shares declined despite positive cues from Wall Street overnight, while Japan’s Fumio Kishida takes office as the Country’s new prime minister. Hong Kong shares ended lower as trading in shares of heavily indebted China Evergrande was suspended after it missed a second key bond interest payment. Chinese developer Hopson also suspended trading of its shares, citing an impending announcement of a major transaction.

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