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Indian equity benchmarks recovered the day's losses to end a choppy session at record closing levels for second straight session on Tuesday, led by Consumer Durables, Consumer Discretionary, FMCG and Metal stocks. For most part of the day, benchmarks traded on a subdued note, as traders remained cautious after the World Bank said that the debt burden of the world's low-income countries rose 12% to a record $860 billion in 2020 as countries responded to the COVID-19 crisis with massive fiscal, monetary, and financial stimulus packages. Some pessimism also came as data complied by the Centre for Monitoring Indian Economy (CMIE) showed led by a sharp 249 percentage point rise in rural joblessness rate, India's unemployment rate shot up to 8.86% for the week ended October 10 compared with 7.56% a week earlier. Traders also took a note of private report stated that the Reserve Bank is likely to change the stance of its monetary policy and hike rates from the first quarter of 2022. It said the central bank will start with liquidity normalization moves this month, narrowing the difference between the rate at which it funds the system and at which it absorbs excess liquidity in December. Investors also awaited the latest batch of earnings as well as industrial output and CPI inflation figures for directional cues.

However, late hour buying lifted the benchmarks to close at record highs. Traders also found some support with industry body PHDCCI stating that the economy is poised to achieve 10.25 per cent GDP growth in FY 2021-22 on the back of effective government policies, Reserve Bank’s accommodative policy stance and improved business sentiments. Some optimism also came with Finance Ministry's Monthly Economic Review stating that strategic reforms and the rapid vaccination drive have placed the country on the path to swift recovery by enabling the economy to ‘navigate the ravaging waves’ of the COVID-19 pandemic. It also said sustained and robust growth in agriculture, a sharp rebound in manufacturing and industry, resumption of services activity, and buoyant revenues suggest that the economy is progressing well. Besides, the Finance Ministry has released Rs 9,871 crore of revenue deficit grant to 17 states. With the release of this installment, a total amount of Rs 69,097.00 crore has been released to eligible states as Post Devolution Revenue Deficit Grant (PDRD) in the current financial year. 

On the global front, Asian markets settled mostly lower on Tuesday, while European markets were trading in red, following the firmly negative cues from Wall Street overnight, as traders are concerned about the outlook for inflation and interest rates amid the increase in commodity prices, particularly the surging crude oil prices. The mood also remained cautious amid the coronavirus situation in the region. Back home, on the sectoral front, stocks related to auto components industry were in focus as rating agency Icra has revised downwards by 300 basis points the growth forecast for the auto components industry for the ongoing fiscal year citing the impact of semiconductor shortage on domestic vehicle manufacturers as well as on exports revenues. Energy sector stocks too were in limelight as the Ministry of New and Renewable Energy (MNRE) said that India is set to achieve 450 GW renewable energy installed capacity by 2030.

Finally, the BSE Sensex rose 148.53 points or 0.25% to 60,284.31 and the CNX Nifty was up by 46.00 points or 0.26% to 17,991.95.       

The BSE Sensex touched high and low of 60,331.74 and 59,885.39, respectively and there were 16 stocks advancing against 13 stocks declining on the index.        

The broader indices ended in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.78%, Consumer Discretionary up by 1.25%, FMCG up by 1.16%, Metal up by 1.05%, Auto up by 0.96% while, IT down by 0.87%, Telecom down by 0.87%, TECK down by 0.85%, Utilities down by 0.10%, Healthcare down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 5.55%, Bajaj Auto up by 3.28%, SBI up by 2.96%, Bajaj Finserv up by 2.90% and Nestle up by 1.78%. On the flip side, HCL Technologies down by 4.04%, Tech Mahindra down by 1.84%, Ultratech Cement down by 1.13%, TCS down by 0.88% and Mahindra & Mahindra down by 0.66% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitisation volumes, originated largely by non-banking financial companies (NBFCs) and housing finance companies (HFCs), have likely grown by 45 percent to around Rs 25,000 crore in the second quarter of the current fiscal (Q2FY22). In the first quarter of fiscal 2022, the volumes stood at Rs 17,200 crore and were at Rs 15,200 crore in the second quarter of the previous fiscal.

As per to the report, after reaching close to pre-Covid levels in the last quarter of the financial year 2020-21, securitisation volumes had again dipped in the first quarter in this fiscal on account of the second wave of the pandemic. It noted that as the country opened, June saw a resurgence in securitisation, and the momentum continued into Q2. The volumes for the quarter were marginally impacted due to new securitisation guidelines introduced by the Reserve Bank of India on September 24, 2021, as some market participants preferred to put transactions on hold until they were well-versed with the new regulations.

The agency further said the new guidelines will have a positive impact in the long term in terms of widening the securitisation market. Despite the second wave of the pandemic, it said the securitisation volumes in the current fiscal have been higher than the corresponding period of last year, i.e. around Rs 42,200 crore in H1 of the financial year 2021-22 versus Rs 22,700 crore in H1 the financial year 2020-21. It also estimates the annual securitisation volumes to reach about Rs 1.2 lakh crore for the financial year 2021-22, which would imply at around 40 per cent increase from the volumes seen in the financial year 2020-21.

The CNX Nifty traded in a range of 18,008.65 and 17,864.95 and there were 31 stocks advancing against 19 stocks declining on the index.  

The top gainers on Nifty were Titan Company up by 6.08%, Bajaj Auto up by 3.29%, Bajaj Finserv up by 2.96%, SBI up by 2.93% and Divi's Laboratories down by 2.74% were the top losers. On the flip side, HCL Technologies down by 3.75%, HDFC Life Insurance down by 1.92%, Coal India down by 1.73%, Tech Mahindra down by 1.60% and Ultratech Cement down by 0.92% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 19.98 points or 0.28% to 7,126.87, France’s CAC decreased 28.66 points or 0.44% to 6,541.88 and Germany’s DAX decreased 45.33 points or 0.3% to 15,153.81.

Asian markets settled mostly lower on Tuesday tracking weakness in the Wall Street overnight, and fresh signs of debt troubles at property developer China Evergrande group also hitting confidence. Also, global inflation worries persisted. Meanwhile, the market was waiting for the official announcement of US tapering the bond purchase in November. Chinese shares declined on growing uncertainty after China’s Evergrande Group missed its third round of bond payments in three weeks. Japanese shares declined by sell-off in big tech stocks amid fears over higher US interest rates.

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