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Key gauge end higher with massive gains

Indian equity benchmarks traded in green throughout the session and ended over one and half percent higher on Thursday, tracking gains in index majors Bajaj Finserv, Larsen & Toubro and HDFC amid a positive trend in global markets. Benchmarks made gap-up start, as sentiments got a boost with the commerce and industry ministry’s statement that foreign direct investment equity inflow into the country more than doubled to $20.42 billion during the April-July period of the current fiscal. Total Foreign Direct Investment (FDI) inflow rose to $27.37 billion during the first four months of 2021-22. Domestic sentiments remain buoyed with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the world is witnessing initial signs of recovery from the impact of coronavirus (Covid-19) pandemic. He said the Covid pandemic has provided a new impetus to technology-driven companies such as fintech, edtech and healthtech which are likely to see increased funding activity in the coming years.

Benchmarks continued their upward rally in late afternoon session, taking support from Commerce and Industry Minister Piyush Goyal’s statement that India and the UAE have formally launched negotiations for a free trade agreement and the first round of talks will begin from September 23 with an aim to conclude it by end-December, a move aimed at boosting trade and investments between the countries. Traders also took a note of Union Minister Nitin Gadkari’s statement that India is committed to an eminently achievable clean energy-based economy, and added that the country will soon have a policy for flex-fuel engines. Meanwhile, Commerce and Industry Minister Piyush Goyal launched the National Single Window System for businesses and said the portal will usher in freedom from the legacy of running to government offices for approvals and registrations.

On the global front, Asian markets ended mostly higher on Thursday, while European markets were trading higher as investors digest the Fed's plans to taper the stimulus program and fears of a corporate collapse in China receded after China Evergrande reached settlement with mainland bondholders. Back home, on the sectoral front, Oil & Gas industry stocks were in focus as the government in its latest data showed that India's crude oil production fell 2.3 per cent in August but natural gas output rose by more than a fifth on the back of output from KG-D6 fields of Reliance-BP. There was some reaction in mineral related industry stocks as the mines ministry said India's mineral production rose by 23.1 per cent in June over the same month a year ago. The index of mineral production of mining and quarrying sector for the month of June 2021 at 105.5, was 23.1 per cent higher as compared to the level in the month of June 2020.

Finally, the BSE Sensex rose 958.03 points or 1.63% to 59,885.36 and the CNX Nifty was up by 276.30 points or 1.57% to 17,822.95.    

The BSE Sensex touched high and low of 59,957.25 and 59,243.15, 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 1.28%, while Small cap index was up by 0.91%.

The top gaining sectoral indices on the BSE were Realty up by 8.71%, Bankex up by 2.26%, Energy up by 2.19%, Capital Goods up by 2.13% and Industrials up by 1.73%, while FMCG down by 0.12% was the lone losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 5.15%, Larsen & Toubro up by 3.46%, HDFC up by 3.11%, Axis Bank up by 3.04% and SBI up by 2.46%. On the flip side, Dr. Reddy's Lab down by 1.07%, ITC down by 0.41%, Nestle down by 0.38%, Hindustan Unilever down by 0.11% and Bharti Airtel down by 0.08% were the top losers.

Meanwhile, commerce and industry ministry has said foreign direct investment (FDI) equity inflows into the country grew by 112 per cent in the first four months (April-July) of 2021-22 ($20.42 billion) compared to the year ago period ($9.61 billion). Total FDI inflow rose to $27.37 billion during the first four months of 2021-22. In the year-ago period, the same was at $16.92 billion. Total FDI comprises equity inflows, reinvested earnings and other capital.

The ministry said Automobile industry has emerged as the top sector during the period under review, accounting for 23 per cent share of the total FDI equity inflows followed by computer software & hardware (18 per cent) and services sector (10 per cent), respectively.

Karnataka is the top recipient state with 45 per cent share of the total FDI equity inflows followed by Maharashtra (23 per cent) and Delhi (12 per cent). The ministry said measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.

The CNX Nifty traded in a range of 17,843.90 and 17,646.55 and there were 40 stocks advancing against 10 stocks declining on the index.      

The top gainers on Nifty were Bajaj Finserv up by 4.63%, Hindalco up by 4.49%, Larsen & Toubro up by 3.72%, Tata Motors up by 3.51% and Coal India up by 3.33%. On the flip side, HDFC Life Insurance down by 1.08%, Dr. Reddy's Lab down by 0.96%, JSW Steel down by 0.63%, Tata Consumer Product down by 0.49% and ITC down by 0.41% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 21.97 points or 0.31% to 7,105.34, France’s CAC increased 61.04 points or 0.92% to 6,698.04 and Germany’s DAX increased 146.34 points or 0.94% to 15,653.08.

Asian markets ended mostly higher on Thursday tracking Wall Street gains overnight after the much-anticipated policy announcements by the US Federal Reserve. US Fed Chair Jerome Powell hinted that tapering could occur as soon as in November or end in mid-2022 amid continued progress towards it goals of maximum employment and price stability. Chinese shares ended higher after China’s central bank PBoC pumped in 110 billion yuan ($17 billion) of cash with seven- and 14-day reverse repurchase agreements in a show of support for the country’s financial markets and the economy. Hong Kong shares gained after China Evergrande group surged 17.62% as it reached settlement with mainland bond investors. Meanwhile, Japanese markets were closed for local holiday.

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