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Indian equity benchmarks extended gains to a second straight day, with Nifty 50 closed at record closing high while Sensex ended a few points shy of an all-time high on Friday after the Reserve Bank kept the key benchmark rates unchanged for the eighth consecutive time and promised to maintain the status-quo on rates as long as necessary to revive growth. Markets opened in green and continued its positive run through the day, as sentiments got boost with Ficci stating that India’s GDP is expected to grow at 9.1 per cent in 2021-22 as economic recovery, post the second wave of the pandemic, seems to be holding ground. Ficci’s Economic Outlook Survey also noted that the ongoing festive season would support this momentum. Sentiments improved further with domestic rating agency Crisil, ahead of the filing of quarterly earnings by companies, said India Inc is set to post an 18-20 per cent revenue growth for July-September as compared to the year-ago period. It said the handsome growth in the topline will be driven by both higher volumes and higher commodity prices.

However, key indices cut some of their initial gains in the afternoon session, as traders got anxious with Fitch Ratings’ report in which it has further lowered India's Gross domestic product (GDP) growth forecast for the fiscal year ending March 2022 (FY22) to 8.7 percent from 10 percent projected in June as a result of the severe second virus wave. But, markets regained some traction to end higher by over half percent, as some optimism remained among traders with Commerce and Industry Minister Piyush Goyal’s statement that the US has huge investment surpluses that can be used in developing infrastructure in India and make it a manufacturing base to help American economy grow and provide goods and services at affordable and competitive prices. Additional support also came with Chief Economic Adviser K V Subramanian’s statement that the focus of the government policies in the last seven years has been on enabling competition in the economy, stressing this is partly responsible for growth of startups. He expressed hope that the country will witness double-digit growth in the current fiscal year aided by a prudent mix of supply and demand side measures undertaken by the government.

On the global front, Asian markets ended mostly higher on Friday following the firmly positive cues from Wall Street, as traders reacted to news from the U.S. that the lawmakers have reached an agreement to temporarily extend the debt limit, thus avoiding a potential default, and a spike in crude oil prices. The upside is limited as traders remain concerned about the coronavirus situation in the region, which is hindering economic activity. European markets were trading mostly in red as German exports data disappointed and caution set in ahead of the release of key U.S. payrolls data due later in the day. Back home, on the sectoral front, aluminum industry stocks were in action with a private report that an acute coal crunch in India has created a precarious situation for aluminium producers as stockpiles of the fuel plummet to critical levels, according to the country’s top industry group. Cement industry’s stocks too were in focus as the South Indian Cement Manufacturers Association expects cement production likely to be badly hit as there has been an unprecedented increase in the cost of imported coal and 'pet coke'.

Finally, the BSE Sensex rose 381.23 points or 0.64% to 60,059.06 and the CNX Nifty was up by 104.85 points or 0.59% to 17,895.20.       

The BSE Sensex touched high and low of 60,212.30 and 59,830.93, respectively and there were 14 stocks advancing against 16 stocks declining on the index.       

The broader indices ended in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Energy up by 2.69%, IT up by 1.82%, TECK up by 1.48%, Industrials up by 0.53% and Oil & Gas up by 0.37%, while Realty down by 2.54%, Power down by 0.83%, FMCG down by 0.55%, Utilities down by 0.41%, Healthcare down by 0.28% and Finance down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.84%, Infosys up by 1.91%, Tech Mahindra up by 1.61%, HCL Technologies up by 1.21% and TCS up by 1.10%. On the flip side, Hindustan Unilever down by 1.16%, NTPC down by 1.16%, Kotak Mahindra Bank down by 0.88%, Maruti Suzuki down by 0.88% and Dr. Reddy's Lab down by 0.86% were the top losers.

Meanwhile, Federation of Indian Chambers of Commerce & Industry (FICCI) in its latest Economic Outlook Survey has stated that India’s GDP is expected to grow at 9.1 per cent in 2021-22 as economic recovery, post the second wave of the pandemic, seems to be holding ground. It also noted that the ongoing festive season would support this momentum. However, the industry body cautioned that a likely surge in people’s movement during Diwali can lead to a rise in the number of COVID cases again.

The chamber said ‘the latest round of Ficci’s Economic Outlook Survey has put forth an annual median GDP growth forecast for 2021-22 at 9.1 per cent. This marks a marginal improvement from the growth projection of 9 per cent recorded in the previous survey round (July 2021)’. It added pick-up in monsoon rains in the latter part of the season and subsequent increase in kharif acreage is likely to keep growth expectations of the agriculture sector upbeat. The survey was conducted in September 2021 and drew responses from leading economists representing the industry, banking and financial services sector.

The industry body said ‘the second quarter GDP data and the upcoming festive season should give a clearer idea of where we are headed on the recovery path and how the demand situation is panning out’. With regard to heading back to the process of normalization, the survey said it was largely felt that the Reserve Bank may indicate a change of stance from accommodative to neutral in the February 2022 policy meeting. It noted ‘however, a hike in the repo rate only looks imminent in the next fiscal year (April 2022). Also, the path towards positive real interest rates is expected to be a staggered one. Much would be contingent on the build-up in domestic price levels and the extent of tapering by the Federal Reserve’.

The CNX Nifty traded in a range of 17,941.85 and 17,840.35 and there were 23 stocks advancing against 27 stocks declining on the index.  

The top gainers on Nifty were Reliance Industries up by 3.76%, Wipro up by 2.96%, Infosys up by 1.94%, Tata Motors up by 1.67% and Tech Mahindra up by 1.61%. On the flip side, Coal India down by 1.57%, SBI Life Insurance down by 1.51%, NTPC down by 1.30%, Maruti Suzuki down by 1.11% and Shree Cement down by 1.08% were the top losers.

European markets were trading mostly in red, France’s CAC decreased 29.28 points or 0.44% to 6,570.91 and Germany’s DAX decreased 38.75 points or 0.25% to 15,212.11, while UK’s FTSE 100 increased 4.55 points or 0.06% to 7,082.59.

Asian markets ended mostly higher on Friday, tracked by a positive session at Wall Street overnight after data showed a bigger-than-expected drop in new jobless claims last week, while the US non-farm payrolls data due out later in the day is expected to show continued improvement in the US labour market. Further, the US lawmakers have reached an agreement to temporarily raise the nation's debt limit, avoiding a historic default that would have devastated the economy. Chinese shares gained as Chinese markets came back from one-week holiday and encouraged by a survey showing services sector activity returned to growth in September. Moreover, Hong Kong shares gained amid easing political tensions between China and the United States.

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