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Indian equities manage to eke out modest gains

Indian equity benchmarks managed to eke out modest gains, ending higher for the fifth straight session. Markets made an optimistic start, as traders took some support with Finance Minister Nirmala Sitharaman exuding confidence that the disinvestment calendar announced in the Union Budget will work well. She added the government is confident that revenue generation will improve through this year and it will be bringing in non-tax revenue other than just disinvestments through various routes, including monetisation of assets. Sentiments remained positive with Economic Affairs Secretary Tarun Bajaj’s statement that the government is sticking to the target of becoming a $5 trillion economy by 2024-25 and emphasis on infrastructure sector and other initiatives taken in Budget 2021-22 are aimed at achieving the goal. The spending on infrastructure has gone up from Rs 4.12 lakh crore to Rs 5.54 lakh crore while on the health sector it has risen to Rs 2.23 lakh crore from Rs 94,000 crore in the Budget Estimate for 2020-21.

However, indices erased most of their initial gains and traded with volatility, after Reserve Bank of India (RBI) decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the COVID-19 pandemic. The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC). But, key gauges managed to end the session in green, as International Monetary Fund (IMF) welcomed India's Union Budget for focussing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery. IMF’s Director of Communications, Gerry Rice has said that the Union Budget rightly focuses on health, education, public infrastructure and, if fully implemented, can help increase India's growth potential.

Asian markets ended mostly in green, amid upbeat corporate earnings results and a continued decline in first-time claims for U.S. unemployment benefits. Progress in the vaccine rollout and optimism about U.S. fiscal stimulus also lifted the markets. European markets were trading higher, despite data from Destatis revealed that German factory orders were down 1.9 percent month-on-month in December, reversing a 2.7 percent rise in November. Back home, oil & gas and oil marketing companies stocks were in limelight as petrol and diesel prices climbed to fresh highs in the country as rates were hiked by the most in recent times, even as fuel retailers said the government can cut taxes to ease consumer burden.

Finally, the BSE Sensex rose 117.34 points or 0.23% to 50,731.63, while the CNX Nifty was up by 28.60 points or 0.19% to 14,924.25. 

The BSE Sensex touched high and low of 51,073.27 and 50,565.29, respectively and there were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.93%, while Small cap index was down by 0.28%.

The top gaining sectoral indices on the BSE were Realty up by 0.94%, Bankex up by 0.90%, Healthcare up by 0.81%, Metal up by 0.74% and FMCG up by 0.44%, while Telecom down by 2.45%, TECK down by 1.30%, Auto down by 1.24%, Oil & Gas down by 0.97% and Industrials down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 10.69%, Kotak Mahindra Bank up by 3.73%, Dr. Reddys Lab up by 2.90%, Ultratech Cement up by 2.74% and ITC up by 1.85%. On the flip side, Axis Bank down by 3.30%, Bharti Airtel down by 3.18%, ICICI Bank down by 2.06%, Maruti Suzuki down by 1.90% and HCL Technologies down by 1.21% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has exuded confidence that the disinvestment calendar announced in the Union Budget will work well. She said the three large areas where the big-ticket expenditure will happen are infrastructure, health and agriculture. The budget had pegged disinvestment receipts for the 2021-22 fiscal beginning April 1 at Rs 1.75 lakh crore.

The government is targeting to conclude strategic sale of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam, in the next fiscal. Besides, the initial public offering of LIC would be launched and strategic sale process of two PSU banks and one general insurance company would be initiated.

Sitharaman said ‘I underline that we have not burdened any section of Indian society with any additional demand for even an additional rupee.’ She added the government is confident that revenue generation will improve through this year and it will be bringing in non-tax revenue other than just disinvestments through various routes, including monetisation of assets. She further said the budget is trying to raise non-tax resources at a time when a lot of money has to be spent.

The CNX Nifty traded in a range of 15,014.65 and 14,864.75 and there were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were SBI up by 11.32%, Tata Steel up by 4.89%, Divis Lab up by 4.54%, Kotak Mahindra Bank up by 4.13% and Dr. Reddys Lab up by 2.83%. On the flip side, Axis Bank down by 3.06%, Bharti Airtel down by 3.70%, Tata Motors down by 2.36%, UPL down by 1.93% and Maruti Suzuki down by 1.83% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 6.13 points or 0.09% to 6,509.85, France’s CAC increased 52.89 points or 0.94% to 5,661.43 and Germany’s DAX increased 30.78 points or 0.22% to 14,091.07.

Asian markets ended mostly higher on Friday, tracking gains on Wall Street overnight amid signs of progress on a pandemic-relief package. Further, progress in the vaccine rollout and continued decline in first-time claims for US unemployment benefits too underpinned market sentiments. Japanese shares ended sharply higher with sentiment supported by upbeat earnings from domestic firms. However, Chinese shares ended slightly lower as ongoing liquidity concerns and ahead of the upcoming Lunar New Year holiday kept sentiment subdued in the region.

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