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Key gauges end marginally higher on Monday

Indian equity benchmarks erased intraday gains to end Monday’s volatile session a marginally higher. Markets made optimistic start and stayed in green for most part of the day, as traders took encouragement as FICCI's overall Business Confidence Index has witnessed a decadal high of 74.2 in the current round on account of improvement in present conditions as well as expectations. The Index had stood at70.9 in the previous survey and 59 a year ago. It revealed recovery of demand conditions, improved capacity utilisation and a promising outlook on various operational parameters. The markets were also taking support with the finance ministry’s statement that the Indian economy is likely to do better than the projection of an 8 per cent shrinkage in the current fiscal as economic activity gathers pace with mild stiffening of pandemic curve and the rollout of vaccines.

However, key indices trimmed most of their initial gains in late afternoon session, as some concern came with Chief Economic Advisor (CEA) Krishnamurthy Subramanian’s statement that the country’s financial sector has not really grown as fast as it should have and is still very, very small. For instance, he said, while India is the fifth largest economy in the world, the largest Indian financial institution - SBI - is ranked 55th in the world. Traders also got cautious, after the RBI data showed that India Inc's overseas direct investment fell by 31 per cent to $1.85 billion in February this year. Domestic companies made investments of $2.66 billion in their overseas subsidiaries and joint-ventures in the year-ago month, February 2020. Meanwhile. Prime Minister Narendra Modi said the production-linked incentive (PLI) scheme would lead to output worth $520 billion in India in the next five years, while industry asked for clarity on implementation across sectors.

On the global front, European markets were trading mostly in green amid expectations that positive economic data from the United States and China coupled with the U.S. Senate's passage of a $1.9 trillion stimulus bill may bode well for a stronger economic recovery. Investors shrugged off data from Destatis showing that German industrial production decreased unexpectedly in January. Asian markets ended mostly lower on Monday as rising bond yields globally on the back of encouraging economic data and U.S. stimulus cheer sparked fears that central banks would tighten policy.  Back home, on the sectoral front, chemical sector stocks were in watch as the government is considering launching a production linked incentive (PLI) scheme in the chemical sector to boost domestic manufacturing and exports. There was some buzz in IT stocks with the RBI data on performance of private sector corporate showing that Information technology (IT) sector remained in the positive terrain throughout the COVID-19 pandemic period and its sales increased by 5.2 per cent year-on-year in the third quarter of 2020-21.

Finally, the BSE Sensex rose 35.75 points or 0.07% to 50,441.07, while the CNX Nifty was up by 18.10 points or 0.12% to 14,956.20.

The BSE Sensex touched high and low of 50,985.77 and 50,318.26, respectively. There were 13 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index on the index.  

The broader indices ended in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.76%, PSU up by 1.76%, Oil & Gas up by 1.62%, Industrials up by 1.19%, Metal up by 1.10% while, Realty down by 0.94%, FMCG down by 0.38%, Telecom down by 0.35%, Finance down by 0.30% and Consumer Discretionary down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.43%, ONGC up by 2.96%, HCL Technologies up by 2.22%, NTPC up by 1.66% and Axis Bank up by 1.60%. On the flip side, Bajaj Finance down by 2.22%, Indusind Bank down by 2.05%, Ultratech Cement down by 1.81%, Bajaj Auto down by 1.40% and HDFC down by 1.31% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said the country’s financial sector has not really grown as fast as it should have and is still very, very small. For instance, he said, while India is the fifth largest economy in the world, the largest Indian financial institution - SBI - is ranked 55th in the world.

On the other hand, countries which are a mere fraction of India’s size have several of their financial institutions featuring among the top 100 in the world. He said the Budget has made a significant push towards reforming the financial sector and adding vitality to it.

Further, he stressed that financial technology can play a significant role in improving both the quantity and the quality of the financial intermediation in the country. He said ‘while banks are investing in data architecture, we still have a long way to go in enabling the kind of data architecture that banks globally employ.’

The CNX Nifty traded in a range of 15,111.15 and 14,919.90. There were 27 stocks advancing against 23 stock declining on the index.

The top gainers on Nifty were UPL up by 7.08%, GAIL India up by 4.25%, Larsen & Toubro up by 3.42%, ONGC up by 3.31% and SBI Life Insurance up by 2.82%. On the flip side, Indusind Bank down by 2.22%, Shree Cement down by 2.19%, Bajaj Finance down by 2.11%, Ultratech Cement down by 1.74% and Bajaj Auto down by 1.50% were the top losers.

European markets were trading mostly in green; France’s CAC increased 37.48 points or 0.65% to 5,820.13 and Germany’s DAX was up by 151.14 points or 1.09% to 14,071.83, while UK’s FTSE 100 fell 8.04 points or 0.12% to 6,622.48.

Asian markets ended mostly lower on Monday as rising bond yields globally sparked fears that central banks would tighten policy sooner than expected. Japanese shares ended down as some investors are trying to adjust their positions ahead of the end of the fiscal year, and by concerns that the passage of a $1.9 trillion US Covid-19 relief package could cause inflation to soar. Chinese shares declined despite strong trade data from China that raised hopes for a quicker economic recovery, while ominous comments from China’s foreign minister about the self-ruled island of Taiwan put pressure on market sentiment.

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