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Indian benchmark indices ended higher for the second consecutive session on Tuesday with Sensex rising as much as 400 points and Nifty 50 index moving above its important psychological level of 17,800 on the back of a broad-based buying interest. In the first half of the session, benchmarks fluctuated between gains and losses owing to weak global cues. Traders remain concerned with ICRA Ratings’ report stated that total infrastructure credit by banks and NBFC-Infrastructure Finance Companies (NBFC-IFCs) remained sluggish in the first quarter of the current fiscal (Q1FY22) due to the disruptions caused by the second wave of the COVID-19 pandemic. Some pessimism also came with a survey by a private firm showed India’s services sector activity eased sequentially in September as rising inflationary pressure worried producers regarding sustainability of high growth in coming months, even though loosening of pandemic restrictions supported an improvement in market conditions and overall demand. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index stood at 55.2 in September from 56.7 in August.

However, markets staged a sharp recovery in second half of the session, as 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 lifted investors' sentiment. Traders also found support with Economic Affairs Secretary Ajay Seth’s statement that India is on the path of economic recovery supported by various government reforms in the last seven years under Prime Minister Narendra Modi's leadership. Notwithstanding the COVID-19 pandemic, he said, the government continued with the reform process and many strategic reforms were announced even during pandemic. Meanwhile, the government has extended the Credit Guarantee Scheme for Subordinate Debt (CGSSD) for stressed MSMEs till March 31, 2022. The scheme was approved by the government on June 1, 2020. It was launched on June 24 the same year to provide credit facility through lending institutions to the promoters of stressed MSMEs.

On the global front, Asian markets ended mostly lower on Tuesday as investors fretted about rising Treasury yields, the debt ceiling tussle in the United States and debt crises involving Chinese property developers, with Fantasia joining Evergrande in missing a coupon payment. European markets were trading higher after a survey showed business growth across Europe remained strong last month despite shortages of inputs. Back home, on the sectoral front, power stocks were in focus as rating agency Ind-Ra said short-term power prices are likely to remain elevated in the near term on account of a continued increase in imported coal prices. Stocks related to aviation industry were in action as industry’s main lobby IATA said airline losses from the coronavirus pandemic are set to surpass $200 billion as travel curbs weigh on corporate and long-haul demand well into 2022. Gold and jewelry related stocks too were in focus as India’s gold imports in September soared 658% from last year’s lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season.

Finally, the BSE Sensex rose 445.56 points or 0.75% to 59,744.88 and the CNX Nifty was up by 131.05 points or 0.74% to 17,822.30.      

The BSE Sensex touched high and low of 59,778.87 and 59,127.04, respectively and there were 21 stocks advancing against 9 stocks declining on the index.       

The broader indices ended in green; the BSE Mid cap index rose 0.33%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.23%, Energy up by 2.52%, Telecom up by 2.28%, Power up by 1.86%, PSU up by 1.46% while, Realty down by 1.63%, Healthcare down by 0.37%, Metal down by 0.15%, FMCG down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.60%, Bharti Airtel up by 2.66%, Reliance Industries up by 2.08%, HCL Technologies up by 2.06% and Titan Company up by 2.04%. On the flip side, Sun Pharma down by 1.36%, Power Grid Corporation down by 0.91%, ITC down by 0.76%, Ultratech Cement down by 0.69% and Tata Steel down by 0.58% were the top losers.

Meanwhile, Economic Affairs Secretary Ajay Seth has said India is on the path of economic recovery supported by various government reforms in the last seven years under Prime Minister Narendra Modi's leadership. Notwithstanding the COVID-19 pandemic, he said, the government continued with the reform process and many strategic reforms were announced even during pandemic. He also noted that during the pandemic period of the past 18 months, it was not just the management of the impact of the pandemic, starting from a health crisis spilling over to the real economy and thereafter some impact onto the financial sector. He said managing each of those, but with very strong emphasis on stepping up the reforms, so that the economy can bounce back with a fast growth rate, and also the potential growth rate can be built.

Talking about one of the challenges, Seth said, the credit offtake has moderated in the last 18 months due to pandemic. He said there are challenges that in the past 18 months because of the lack of private investment demand, the credit offtake has been rather moderate and that's an area where further work is needed. He noted that the focus of the government is on inclusive development, and added that the government has launched various schemes targeted to support persons, entities with weak economic capacities, not just in the pandemic period, but in the past seven years.

With regard to financial sector reforms, the secretary said the introduction of Insolvency and Bankruptcy Code (IBC) has led to resolution of Rs 2.4 lakh crore of stressed assets, while FDI and FPI liberalisation has bolstered the confidence of foreign investors in the Indian economy. On the infrastructure development, he said the two major plans --National Infrastructure Pipeline envisaging Rs 111 lakh crore of investment, supplemented by National Monetisation Plan to the extent of about Rs 6 lakh crore -- have been announced. 

The CNX Nifty traded in a range of 17,833.45 and 17,640.90 and there were 29 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were ONGC up by 10.77%, Indusind Bank up by 5.02%, Coal India up by 4.21%, Indian Oil Corporation up by 3.09% and SBI Life Insurance up by 2.69%. On the flip side, Cipla down by 2.40%, Hindalco down by 2.08%, Shree Cement down by 1.84%, Sun Pharma down by 1.42% and Tata Consumer Product down by 1.36% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 44.76 points or 0.64% to 7,055.77, France’s CAC rose 53.03 points or 0.82% to 6,530.69 and Germany’s DAX was up by 68.11 points or 0.45% to 15,104.66.

Asian markets ended mostly lower on Tuesday, tracking weakness in Wall Street overnight. Market sentiments weakened further amid mounting concerns about the developer’s financial health after Chinese property developer Fantasia Holdings failed to repay a maturing bond, adding to the risks stemming from China Evergrande Group’s debt crisis. Meanwhile, Chinese markets will remain shut until Friday for the Golden Week holidays. Growing anxiety within the Biden administration about the debt ceiling tussle in the United States and rising Treasury yields also weighed on markets. Japanese shares declined to one-month lows as surging oil prices stoked further worries about inflation and monetary tightening globally, while new Japanese Prime Minister Fumio Kishida's proposal to raise tax on capital gains also dampened sentiment.

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