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Bulls continued to roar on Dalal Street on Monday with frontline gauges hitting fresh all-time closing highs breaching many crucial psychological levels one after another. Sentiments remained upbeat since beginning as traders took encouragement with report that foreign direct investment (FDI) into the country rose by more than twofold to $17.57 billion during April-June this fiscal on account of measures such as policy reforms and ease of doing business. Further, support came as foreign portfolio investors (FPIs) pumped in a net of just Rs 986 crore in Indian equities during August. Markets extended gains as traders remained positive, as Niti Aayog Vice-Chairman Rajiv Kumar has said a strong economic growth rebound is expected on the back of rapid vaccinations, a recovering monsoon boosting agricultural output, thrust on infrastructure investments by the government, and growth in export, which have performed remarkably during April June registering a growth of 18 per cent over the same period in the pre-pandemic year of 2019-20. Kumar further said that as per consensus estimates, despite downward revision in the GDP growth projections, India is expected to be amongst the fastest-growing major economies in the world. He added ‘We also expect consumption to recover in the third and fourth quarters of the fiscal year’.

Markets continued to trade northward till end of day’s trade as sentiments remained buoyed after India Ratings and Research in its latest report stated that it expects the aggregate fiscal deficit of states in the country to moderate to 4.1 per cent of GDP in the current financial year from its earlier expectation of 4.3 per cent. In line with the slight moderation in its forecast for fiscal deficit in FY22, the agency expects the aggregate debt/GDP ratio to come in lower at 32.4 per cent in FY22 as against the previous estimate of 34 per cent. Some optimism also came after RBI data showed that Bank credit grew by 6.55 per cent to Rs 108.89 lakh crore and deposits by 10.58 per cent to Rs 155.70 lakh crore in the fortnight ended August 13, 2021. Announcing the launch of the September 2021 round of Inflation Expectations Survey of Households (IESH), the RBI said the survey aims at capturing subjective assessments on price movements and inflation, of about 6,000 households, based on their individual consumption baskets, across 18 cities.

Firm opening in European counters too aided sentiments with all the major indices were trading in green as hopes that continued central bank support would sustain an economic recovery offset woes over rising Delta COVID-19 variant cases. All Asian markets were trading higher amid U.S. Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole Symposium calmed fears over the tapering timetable. 

Back home, the overall economic activity has shown signs of improvement, and for the first time in months, hiring activity in India is at a pre-pandemic level. Job postings for IT tech software roles saw a 19 per cent increase between July 2020 and July 2021 as an expected outcome of the pandemic-induced digitisation. Meanwhile, agriculture industry stocks remained in focus as agriculture ministry data released showed area sown to paddy has dipped 1.23 per cent at 388.56 lakh hectares so far in the 2021-22 kharif season due to deficit rains in some states.

Finally, the BSE Sensex rose 765.04 points or 1.36% to 56,889.76, while the CNX Nifty was up by 225.85 points or 1.35% to 16,931.05.  

The BSE Sensex touched high and low of 56,958.27 and 56,309.86, respectively and there were 26 stocks advancing against 4 stocks declining on the index.   

The broader indices ended in green; the BSE Mid cap index rose 1.72%, while Small cap index was up by 1.55%.

The top gaining sectoral indices on the BSE were Telecom up by 3.53%, Metal up by 2.62%, Power up by 2.31%, Basic Materials up by 2.16% and Utilities up by 2.14%, while IT down by 0.51% and TECK was down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.44%, Axis Bank up by 4.15%, Tata Steel up by 4.00%, Titan Company up by 3.46% and Bajaj Finance up by 2.91%. On the flip side, Tech Mahindra down by 1.88%, Nestle down by 0.95%, Infosys down by 0.62% and TCS down by 0.50% were the few losers.

Meanwhile, expressing optimism, Niti Aayog Vice-Chairman Rajiv Kumar has said a strong economic growth rebound is expected on the back of rapid vaccinations, a recovering monsoon boosting agricultural output, thrust on infrastructure investments by the government, and growth in export, which have performed remarkably during April June registering a growth of 18 per cent over the same period in the pre-pandemic year of 2019-20. Kumar further said that as per consensus estimates, despite downward revision in the GDP growth projections, India is expected to be amongst the fastest-growing major economies in the world. He added ‘We also expect consumption to recover in the third and fourth quarters of the fiscal year’.

According to Kumar, after phased unlocking post the second Covid wave, the economic activity has gained strength. The government has also stepped into provide another dose of stimulus of Rs 6.3 lakh crore, focused on healthcare, tourism, agriculture, infrastructure, MSMEs and exports. He noted ‘As growth momentum gathers pace, supported by the measures undertaken by the government, the Indian economy will emerge stronger on a sustainable development path’. The Niti Aayog Vice Chairman pointed out that compared to steady expansion in the first five months of 2021, the global Purchasing Managers’ Index (PMI) recorded slower growth in June and July.

He said ‘In Asia, the manufacturing PMI witnessed deceleration in China. In India, manufacturing PMI rose to a three-month high of 55.3 in July, reflecting likely expansion of manufacturing activity in the coming months’ and added that India’s services PMI improved to 45.4 but remained in the contraction zone. Kumar observed that subsequent to a fairly robust recovery in the March quarter, the Indian economy was impacted by a much stronger Covid second wave, leading to imposition of strict curbs across states and decline in economic activity.

Referring to the global economy, Kumar said according to the World Bank, the global economy is on a path of robust recovery, with a projected growth of 5.6 per cent in 2021 the strongest post-recession pace in 80 years. The real GDP of advanced economies is projected to expand by 5.4 per cent whereas emerging markets and developing economies are expected to grow by 6.0 per cent. However, the pace of recovery is diverging across countries, reflecting variations in pandemic-induced disruptions and the extent of policy support.

The CNX Nifty traded in a range of 16764.85 and 16951.50 and there were 43 stocks advancing against 7 stocks declining on the index.    

The top gainers on Nifty were Bharti Airtel up by 4.25%, Axis Bank up by 4.21%, Tata Steel up by 4.08%, Divi's Lab up by 3.94% and Coal India up by 3.64%. On the flip side, Tech Mahindra down by 1.81%, Nestle down by 1.08%, Eicher Motors down by 0.86%, Infosys down by 0.63% and TCS down by 0.51% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 23.03 points or 0.32% to 7,148.01, France’s CAC increased 13.49 points or 0.20% to 6,695.41 and Germany’s DAX was up by 27.07 points or 0.17% to 15,878.82.

Asian markets settled higher on Monday, tracking Friday's bounce on Wall Street after US Federal Reserve Chairman Jerome Powell at the Jackson Hole signalled that the central bank is likely to begin tapering some of its easy-money policies before the end of the year though Fed will continue to hold interest rates at current level. Chinese shares ended marginally higher after the country's securities regulator pledged to crack down on mismanaged private funds and weed out fake ones, because the government becomes more assertive in dealing with an industry worth 60 trillion yuan.

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