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Extending their winning streak to second straight session, Indian equity Benchmarks showcased an enthusiastic performance on Monday, by rallying over two percent in the session and settling above the psychological 18,050 (Nifty) and 60,600 (Sensex) levels. The key benchmark indices opened on an upbeat note boosted by intense buying in banking and financial stocks after the announcement of merger between HDFC and HDFC Bank.  Investors’ morale was also boosted with Niti Aayog Vice Chairman Rajiv Kumar’s statement that India is on the cusp of a major economic recovery and talks of possible stagflation are 'overhyped' as a strong economic foundation is being laid with the reforms carried out by the government over the last seven years. Traders also got some encouragement with the Commerce and Industry Ministry in its latest data has indicated that India's merchandise exports spurt to a record high of $418 billion in the 2021-22 fiscal on higher shipments of petroleum products, engineering goods, gem and jewellery and chemicals.

Buying got intensified in second half of the session, taking support from the finance ministry’s statement that Goods and Services Tax (GST) collection soared to an all-time high of Rs 1.42 lakh crore in March 2022 as the fiscal year-end frenzy to meet targets saw strong sales and crackdown on evasions brought in more taxes. The GST collection rose 15 percent annually in March. Some solace also came after Finance Minister Nirmala Sitharaman’s statement that India continues to remain the highest receiver of the FDI, and the Indian retail investors have created the capacity to absorb the shock due to outflow of foreign funds from the country’s stock markets. Traders overlooked report indicated that Indian manufacturing activity eased in the month of March, on the account of slower expansions in factory orders and production as well as a renewed decline in new export orders. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 54.0 in March from 54.9 in February. 

On the global front, Asian markets settled mostly higher on Monday as a solid U.S. jobs report helped ease concerns about slowing global growth. The upside momentum was capped by escalations in the Ukraine crisis after Ukraine accused Russia of carrying out a ‘massacre’ in the town of Bucha, and Western nations reacted to images of dead bodies with calls for new sanctions on Russia. European markets were trading higher, despite renewed concerns about inflation and tighter monetary policies. Geopolitical tensions continue to remain on investors' radar, with the EU discussing a new round of sanctions on Russia in response to multiple reports that Russian troops executed unarmed civilians in Ukrainian towns.

Back home, stocks related to gem and jewellery industry were in watch as the Gem and Jewellery Export Promotion Council (GJEPC) said the India-Australia Comprehensive Economic Cooperation Agreement (CECA) will boost the bilateral gems and jewellery trade between the nations to $1.5 billion and exports to the continent country are likely to double in the next three years. There were some reaction in public sector banks (PSBs) as ICRA said that the government-owned banks that received capital through recapitalisation (recap) bonds may have to take a hit of around Rs 13,000 crore following the Reserve Bank of India’s (RBI’s) directive to recognise these bonds at market value.

Finally, the BSE Sensex rose 1335.05 points or 2.25% to 60,611.74 and the CNX Nifty was up by 382.95 points or 2.17% to 18,053.40.      

The BSE Sensex touched high and low of 60,845.10 and 59,760.22, respectively. There were 28 stocks advancing against 2 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 1.27%, while Small cap index was up by 1.68%.

The top gaining sectoral indices on the BSE were Finance up by 4.25%, Bankex up by 3.45%, Power up by 3.00%, Utilities up by 2.93% and Metal up by 2.04%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were HDFC Bank up by 9.97%, HDFC up by 9.30%, Kotak Mahindra Bank up by 3.32%, Hindustan Unilever up by 2.24% and Larsen & Toubro up by 1.95%. On the flip side, Infosys down by 1.05% and Titan Company down by 0.20% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, Niti Aayog Vice Chairman Rajiv Kumar has said that the country is on the cusp of a major economic recovery and talks of possible stagflation are ‘overhyped’ as a strong economic foundation is being laid with the reforms carried out by the government over the last seven years. Notwithstanding economic uncertainties triggered by the Russia-Ukraine war that is also impacting global supply chains, Kumar asserted that it was quite clear from all accounts that India will remain the fastest growing economy in the world.

He said ‘given all the reforms that we have done in the last seven years, and given that we are seeing the end of the COVID-19 pandemic hopefully, and the 7.8 per cent rate of growth that we will get this year (2022-23), a very strong foundation is now being laid for further rapid increase in economic growth in the coming years’. He acknowledged that because of the Russia-Ukraine war, India’s GDP growth projection could be revised. He added that ‘But even then, India will remain the fastest growing economy and all the other economic parameters are actually quite within the range’.

On rising inflation, the Niti Aayog Vice Chairman said that RBI is keeping a close watch as per its mandate. He said ‘I am sure that the RBI is well in control of it (inflation) and will take the necessary steps if and when required’. Regarding concerns over possible risk of stagflation, he said the Indian economy is projected to grow 7.8 per cent in the current fiscal and this is nowhere near the definition of stagflation. he emphasized ‘I think this has been overhyped, because when you talk about stagflation, we talk about growth rates which are much below your rate of growth or potential output, which is not true at all for this time’.

Regarding high petrol and diesel prices, Kumar said that given the global situation, fuel prices are rising across the world. He said ‘In the past, the government had taken steps to reduce the tax burden. And I think, it’s time now for the states to come forward if they feel that this is required to be done’. He asserted in any case, the government keeps a close watch on prices of all commodities including fuel and will take steps as necessary. Rates of petrol and diesel are rising, and vary from state to state depending upon the incidence of local taxation.

The CNX Nifty traded in a range of 18,114.65 and 17,791.40. There were 46 stocks advancing against 4 stocks declining on the index.    

The top gainers on Nifty were HDFC Bank up by 9.83%, HDFC up by 9.12%, Adani Ports up by 4.10%, HDFC Life Insurance up by 3.72% and Kotak Mahindra Bank up by 3.25%. On the flip side, Infosys down by 1.13%, Tata Consumer Product down by 0.35% and Titan Company down by 0.23% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 13.65 points or 0.18% to 7,551.55, France’s CAC increased 18.55 points or 0.28% to 6,702.86 and Germany’s DAX increased 6.21 points or 0.04% to 14,452.69.

Asian markets settled mostly higher on Monday as a solid March jobs report from the United States eased concerns about slowing global growth. Meanwhile, investors shrugged off lingering concerns around the Ukraine crisis and potential interest rate hikes. Ukraine accused Russia of carrying out a massacre in the town of Bucha, and Western nations reacted to images of dead bodies with calls for new sanctions on Russia. Chinese markets were closed for Ching Ming Festival and Taiwan markets were closed for Children's Day.

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