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Key benchmark indices extended their winning run into the fourth straight trading session and ended with gains of around a percent on Wednesday backed by solid gains in index heavyweights Mahindra & Mahindra, Bharti Airtel and Reliance Industries. The benchmark indices made a gap-up opening and remained higher throughout the session, as investor sentiments magnified with the World Bank retained its FY22 growth forecast for India at 8.3 per cent but upgraded it to 8.7 per cent for FY23, from 7.5 per cent estimated earlier, citing improving growth prospects, especially a reviving private capex cycle. Some optimism came with former chief economic adviser Arvind Virmani’s statement that the Indian economy is likely to register a growth of 9.5 per cent in this financial year. Some support also came in as preliminary data from the commerce ministry showed that the country's exports grew 33.16 per cent to $7.63 billion during January 1-7 period on account of healthy performance by various sectors, including engineering, petroleum and gems and jewellery.

The benchmark indices steadily held their strong gains in afternoon trade, as reports suggest the fast-spreading Omicron variant is not virulent and hospitalisation cases are very low. Also, Mumbai Mayor Kishori Pednekar stated that the numbers of COVID-19 cases and its fast spreading variant Omicron were slowing coming down in the city. Domestic sentiments were positive, as the government extended till March 15 the deadline for corporates to file Income Tax returns for the fiscal ended March 2021. The deadline to file tax audit report and transfer pricing audit report for 2020-21 fiscal too has been extended till February 15. Traders overlooked a domestic rating agency ICRA’s report stated that lockdowns to contain the spread of the third COVID wave hurt loan collections and new lending by non-banks, and will in turn impact securitization volumes.

On the global front, Asian markets settled mostly higher, while European markets were trading higher after Fed Chair Jerome Powell did not provide any new details on interest rates at his Senate confirmation hearing. Powell has made it clear interest rates will increase if inflation persists but also said he expects some of the supply chain problems that are pushing up prices will ease in the middle of this year. Investors also digested Chinese inflation data and looked ahead to the release of U.S. December inflation data later in the day for further clues on the rate outlook. Back home, on the sectoral front, the road sector stocks were in focus as rating agency Icra said that high Wholesale Price Index (WPI) inflation is a blessing in disguise for toll road projects as toll collections are set to witness 14-15 per cent growth in 2022-23. Telecom stocks too were in limelight with the three leading telcos seeking 90-95 per cent reduction in base price of 5G spectrum auction.

Finally, the BSE Sensex rose 533.15 points or 0.88% to 61,150.04 and the CNX Nifty was up by 156.60 points or 0.87% to 18,212.35.          

The BSE Sensex touched high and low of 61,218.19 and 60,850.93, respectively and there were 24 stocks advancing against 6 stocks declining on the index.      

The broader indices ended in green; the BSE Mid cap index rose 1.08%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Telecom up by 3.15%, Power up by 2.21%, Utilities up by 2.16%, Energy up by 2.10% and Realty up by 1.84%, while Consumer Durables down by 0.07% and Healthcare down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.68%, Bharti Airtel up by 3.76%, Reliance Industries up by 2.68%, Indusind Bank up by 2.58% and ICICI Bank up by 1.68%. On the flip side, TCS down by 1.50%, Titan Company down by 1.46%, HDFC Bank down by 0.58%, Tech Mahindra down by 0.55% and Wipro down by 0.40% were the top losers.

Meanwhile, the World Bank in its latest Global Economic Prospects report has retained India’s gross domestic product (GDP) growth forecast at 8.3 percent for current fiscal year 2021-22 (FY22) as what was stated in its last projection released in October 2021. Besides, it upgraded the country’s growth forecast for FY23 to 8.7 percent from 7.5 percent estimated earlier. It cited improving growth prospects, especially a reviving private capex cycle for up-gradation.

According to the report, the growth rate of the Indian economy in the current and next fiscal will be stronger as compared to its immediate neighbours. Bangladesh is expected to grow at 6.4 and 6.9 percent in FY22 and FY23, respectively; Nepal at 3.9 percent this fiscal and at 4.7 percent in the next financial year; and Pakistan's economy is predicted to accelerate by 3.4 percent in FY22 and 4 percent in FY23.

The global economic growth will ‘decelerate markedly’ this year as COVID-19 outbreaks and supply chain snarls persist. At the same time, the support programmes unveiled by several governments are about to end. The World Bank forecast global growth to slow down to 4.1 percent this year from an estimated 5.5 percent in 2021, but warned ‘Omicron-related economic disruptions could substantially reduce growth’ to as low as 3.4 percent.

The CNX Nifty traded in a range of 18,227.95 and 18,128.80 and there was 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.53%, Bharti Airtel up by 3.65%, Indusind Bank up by 2.78%, Reliance Industries up by 2.54% and Hindalco Industries up by 2.26%. On the flip side, Titan Company down by 1.60%, TCS down by 1.50%, Shree Cement down by 1.07%, Britannia Industries down by 1.05% and Cipla down by 0.96% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 51.64 points or 0.69% to 7,543.01, France’s CAC increased 33.97 points or 0.47% to 7,217.35 and Germany’s DAX increased 56.15 points or 0.35% to 15,997.96.

Asian markets settled mostly higher on Wednesday tracking bounced back in US stocks overnight following a less-hawkish comments than expected from the US Federal Reserve Chair Jerome Powell and it also reassured investors that the central bank will tackle inflation to extend the economic expansion. US Fed Chair Jerome Powell has made it clear interest rates will increase if inflation persists but also said he expects some of the supply chain problems that are pushing up prices would ease in the middle of this year. Investors are awaiting the release of US December inflation data later in the day for further clues on the interest rate outlook. Chinese shares gained as data showed inflationary pressure in the county eased further in December. Data from National Bureau of Statistics showing that Consumer prices in China were up 1.5 percent year-on-year in December. That was shy of expectations for an increase of 1.8 percent and was down sharply from 2.3 percent in November. The bureau also said that producer prices climbed an annual 10.3 percent, missing forecasts for an increase of 11.1 percent and slowing from 12.1 percent a month earlier.

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