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Snapping a three-day losing streak, Indian equity benchmarks ended higher on Friday, led by a strong buying support in the index heavyweights ITC, Mahindra & Mahindra and Dr. Reddy's Lab.  After making positive start, key indices swung between losses and gains, as traders got anxious with the finance ministry said the current elevated level of international crude price, should it persist for a long time, may come in the way of India achieving a real economic growth rate of 8%-plus in FY23 and pose upside risks to inflation as well. But, markets rallied sharply in afternoon deals, as the monetary policy committee (MPC) decided to hold repo rate at 4% and the reverse repo rate at 3.35%. While the RBI's rate-setting panel maintained its accommodative stance, it also voted unanimously to focus on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

Sentiments were also upbeat as RBI Governor Bimal Jalan has said that the country’s economy is in good shape as India’s GDP growth rate and foreign exchange reserve are high. Notwithstanding economic uncertainties triggered by the Russia-Ukraine war that is also impacting the global supply chain, Jalan said it is not going to affect India’s economic performance. Some solace also came with a private report that with the e-way bills generated for inter-state trade in goods under the goods and services tax (GST) regime touching a record in March, the monthly GST collections will likely hit an all-time high of around Rs 1.5 trillion in April (March transactions). Adding to the optimism, Revenue Secretary Tarun Bajaj has said India's tax collections soared to a record high of Rs 27.07 lakh crore in the fiscal year ended March 31 (FY22) compares with budget estimate of Rs 22.17 lakh crore. The rise in tax collections was mainly on account of jump in mop-up from income and other direct taxes as well as indirect taxes.

On the global front, Asian markets settled mostly higher on Friday as investors fret about the war in Ukraine, Covid-19 lockdowns in China and the Fed's plan for aggressive policy tightening. Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank is 'behind the curve' on interest rates and he favors raising policy rates to 3-3.25 percent in the second half of 2022. Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic also backed bigger interest rate hikes to contain inflation. European markets were trading higher as investors took in stride a new round of sanctions against Russia, the prospect of tighter monetary policy and China's worsening Covid-19 outbreak.

Back home, insurance industry’s stocks were in focus as the insurance regulator, IRDA, wants removal of the minimum entry capital requirement of Rs 100 crore for setting up an insurance business in a bid to facilitate the entry of multiple players such as standalone micro insurers and niche players. Stocks related to logistics sector also were in watch as Credit ratings agency ICRA in its latest report stated that the logistics sector is projected to record a growth of 7-9 per cent in the current fiscal (FY23) but the industry players' margins are likely to remain ‘sensitive to risks’ stemming from a continued rise in oil and commodity prices amid the Russia-Ukraine conflict.

Finally, the BSE Sensex rose 412.23 points or 0.70% to 59,447.18 and the CNX Nifty was up by 144.80 points or 0.82% to 17,784.35.       

The BSE Sensex touched high and low of 59,654.44 and 58,876.36, respectively. There were 22 stocks advancing against 8 stocks declining on the index.   

The broader indices ended in green; the BSE Mid cap index rose 0.93%, while Small cap index was up by 0.99%.

The gaining sectoral indices on the BSE were Power up by 1.99%, Metal up by 1.96%, FMCG up by 1.93%, Basic Materials up by 1.91% and Utilities up by 1.81%, while IT down by 0.01% was the lone losing index on BSE.

The top gainers on the Sensex were ITC up by 4.36%, Mahindra & Mahindra up by 2.70%, Dr. Reddy's Lab up by 2.67%, Titan Company up by 2.26% and Reliance Industries up by 1.75%. On the flip side, Tech Mahindra down by 1.31%, Maruti Suzuki down by 1.04%, NTPC down by 0.98%, HCL Technologies down by 0.65% and Sun Pharma down by 0.36% were the top losers.

Meanwhile, expressing optimism over state of Indian economy, former RBI Governor Bimal Jalan has said that the country’s economy is in good shape as India’s GDP growth rate and foreign exchange reserve are high. Notwithstanding economic uncertainties triggered by the Russia-Ukraine war that is also impacting the global supply chain, Jalan said it is not going to affect India’s economic performance. He added that India’s current macroeconomic situation is quite positive in the sense that the rate of growth is high. India’s foreign exchange reserve is also very high.

However, the former RBI governor has stressed that unemployment is high, which is a matter of concern. As the Russia-Ukraine crisis is concerned, he said obviously, it will have an impact all over the world. He said but so far India is concerned, its relationship with Russia was quite good but exports-imports was not very much, and added that it was less than 2 per cent. While observing that development in Ukraine is a matter of concern, he said it is not going to affect India’s economic performance.

Jalan noted that high inflation is a problem. Retail inflation hit an eight-month high of 6.07 per cent in February, remaining above the RBI’s comfort level for the second month in a row, while wholesale price-based inflation soared to 13.11 per cent on account of the hardening of crude oil and non-food item prices. Regarding high petrol and diesel prices, he said the government has already cut some taxes on petrol and diesel. He said ‘And some more taxes if they can reduce, (then) that is desirable’.

The CNX Nifty traded in a range of 17,842.75 and 17,600.55. There were 42 stocks advancing against 8 stocks declining on the index.     

The top gainers on Nifty were Grasim Industries up by 6.09%, ITC up by 4.71%, SBI Life Insurance up by 4.34%, JSW Steel up by 3.88% and Adani Ports and SEZ up by 2.76%. On the flip side, Cipla down by 2.31%, Tech Mahindra down by 1.20%, Maruti Suzuki down by 0.91%, NTPC down by 0.65% and HCL Technologies down by 0.59% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 66.36 points or 0.88% to 7,618.17, France’s CAC increased 67.93 points or 1.05% to 6,529.61 and Germany’s DAX increased 168.61 points or 1.2% to 14,246.76.

Asian markets settled mostly higher on Friday tracking positive lead from Wall Street overnight. Chinese shares ended higher in line with expectations of further policy easing measures to support a slowing economy hit by the country's worst Covid-19 outbreak in two years. Hong Kong shares gained, despite Chinese tech shares fell for a third day in view of the world's largest video games company, Tencent Holdings's decision to shut its game streaming service. Although, lingering worries about the war in Ukraine and the prospect of aggressive rate hikes by central bank around the world limited further gains.

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