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Indian equity benchmarks snapped their three-day losing streak and ended higher by around half percent on Thursday led by strong buying interest in Metal, Basic Materials and Realty stocks. Strong global cues also helped the sentiments. The benchmarks staged a gap up opening and held on to gains as futures and option contracts for the month of July expired. Sentiments got a boost as Chief Economic Adviser (CEA) K V Subramanian said that India is expected to hit a growth rate of 6.5-7 percent in 2022-23 and accelerate further to 8 percent in the subsequent years on the back of reforms undertaken by the government. Sentiments remained positive as Securities and Exchange Board of India’s (SEBI) Chairman, Ajay Tyagi asserted that a large part of the non-banking financial intermediation is happening through the capital markets. Going forward, the capital markets are going to play a bigger role in funding the economic growth.

Benchmarks continued to trade in green in second half of the session, as the Reserve Bank of India (RBI) allowed payment system providers, prepaid card issuers, card networks and white label ATM operators access to its Centralised Payment Systems (CPS), such as real time gross settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems in the first phase of its plan bring non-banks in the same platform.  Some support came after Centre has launched the 'Secured Logistics Document Exchange' along with a Calculator for Green House Gas Emissions, in order to further improve ease of doing business. The Digital initiative is now set to improve logistics efficiency, reduce logistics cost, and promote multi-modality and sustainability in a big way.  However, upside remained capped as some cautiousness prevailed  in the markets with a private report that the Indian economy is expected to face some pressure in the current financial year due to the second wave of the pandemic, coupled with weaker consumer sentiment, but a large capex by the government can be a saving grace for the economy.

On the global front, Asian markets settled mostly higher on Thursday, while European markets were trading higher, following the mixed cues overnight from Wall Street, as investors reacted to the Federal Reserve's comments that economic activity and employment in the US have continued to strengthen, boosting the prospects of a faster global economic rebound. Meanwhile, the upside is capped amid the ongoing Covid-19 concerns. Back home, MSME stocks were in focus with a private report stating that non-performing assets in the micro, small and medium enterprises grew in the March quarter to 12.6 per cent against 12 per cent at the end of the preceding December quarter.

Finally, the BSE Sensex rose 209.36 points or 0.40% to 52,653.07, while the CNX Nifty was up by 69.05 points or 0.44% to 15,778.45.   

The BSE Sensex touched high and low of 52,777.18 and 52,561.39, respectively and there were 14 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.39%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Metal up by 5.54%, Basic Materials up by 2.66%, Realty up by 1.58%, PSU up by 1.36%, IT up by 0.81% while, FMCG down by 0.92%, Telecom down by 0.59%, Power down by 0.42%, Oil & Gas down by 0.16%, Auto down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 6.87%, Bajaj Finserv up by 4.48%, SBI up by 3.83%, HCL Technologies up by 2.54% and Sun Pharma up by 2.28%. On the flip side, Maruti Suzuki down by 2.21%, Power Grid Corp down by 2.13%, Bajaj Auto down by 1.51%, ITC down by 1.51% and Dr. Reddy's Lab down by 1.25% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) K V Subramanian has said that India is expected to hit a growth rate of 6.5-7 percent in 2022-23 and accelerate further to 8 percent in the subsequent years on the back of reforms undertaken by the government. He also said the government is expected to meet the fiscal deficit target of 6.8 per cent in the current fiscal despite pressure on revenue collections.

CEA said ‘Our projection is that from FY'23, we should be hitting a growth of 6.5-7 per cent... accelerating from there onwards hitting between 7.5 and 8 per cent as the impact of all these reforms is felt both on the investment rate, which will start touching 40 per cent, and the incremental capital output ratio, basically productivity, which will also improve.’

Subramanian further said the supply-side reforms undertaken by the government in sectors such as agriculture, labour, export PLI scheme, change in MSME definition, creation of the bad bank and privatisation of public sector banks, among others, are going to push growth in the future. Besides, he said, linking of reforms to additional funding by the Centre to States would encourage them to undertake reforms that will push growth.

The CNX Nifty traded in a range of 15,817.35 and 15,737.80 and there were 23 stocks advancing against 27 stocks declining on the index.   

The top gainers on Nifty were Hindalco up by 10.17%, Tata Steel up by 6.81%, SBI up by 4.14%, Bajaj Finserv up by 3.90% and JSW Steel up by 3.35%. On the flip side, Maruti Suzuki down by 2.32%, Power Grid Corp down by 2.07%, Bajaj Auto down by 1.63%, ITC down by 1.48%, and Coal India down by 1.39% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 62.94 points or 0.9% to 7,079.57, France’s CAC rose 45.88 points or 0.69% to 6,655.19 and Germany’s DAX was up by 66.09 points or 0.42% to 15,636.45.

Asian markets settled mostly higher on Thursday. South Korean shares ended higher with optimism for strong corporate earnings. Japanese shares rose as the US Federal Reserve hinted at progress on tapering talks but gave no timeline, however some gains were capped on cautious over recent record Covid-19 infections in the capital. Moreover, China and Hong Kong shares gained as authorities stepped up efforts to calm frayed investor nerves after a market rout.

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