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Indian equity benchmarks ended the Monday’s trade with significant gains with frontline gages settled above their crucial 48,300 (Sensex) and 14,450 (Nifty) levels. Markets started the session with a gap up opening as investors reacted optimistically to positive earnings updates and the US announcement that it would remove bottlenecks in the export of raw materials essential for the production of vaccines in India. Traders also took some support with Union Minister Nitin Gadkari’s statement that the pandemic has caused a slowdown in India but the country's inherent resilience and capability will help it transform into a new India with a faster growth path fuelled by infrastructure. Traders took note of report that the centre has allowed state governments to borrow 75% of their annual market borrowing limit of 4% of their respective Gross State Domestic Product (GSDP) in the first nine months of the current fiscal year.

Markets pare some of their initial gains but traded comfortably throughout the session as traders remained optimistic, as the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22, to boost the economy grappling with the fresh COVID-19 wave. According to an office memorandum (OM) issued by the Finance Ministry, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget. Traders also got some support with RBI’s data stating that the foreign exchange reserves rose by $1.193 billion to reach $582.406 billion in the week ended April 16. In the previous week ended April 9, the forex kitty had surged by $4.344 billion to $581.213 billion. 

Positive opening in European counters too aided sentiments with most of the European counterparts were trading in green following a strong end to last week on Wall Street as traders turned their attention to the Federal Reserve’s latest policy meeting and earnings from corporate giants. Asian markets ended mostly higher on Monday, even after Japan's services producer prices increased for the first time in six months in March. The Bank of Japan said that the services producer price index gained 0.7 percent annually after staying flat in February. This was the first growth since September 2020. On a monthly basis, the services PPI advanced 0.7 percent in March, faster than the 0.2 percent increase posted in February.

Back home, engineering exporters body -- the Engineering Export Promotion Council (EEPC) has said that imposition of restrictions by states to contain rising coronavirus cases could affect the exports and the worst impacted would be micro, small and medium enterprises (MSMEs). On the sectoral front, auto stocks were in focus as India Ratings and Research (Ind-Ra) in its latest report stated that the second wave of COVID-19could pose downside risks to the domestic auto industry demand in the near term. It said the demand for commercial vehicles (CVs) may revive in the second quarter of 2021-22 as economic activities improve, and also due to the lower capacity in the system after consecutive double-digit decline in 2019-20 and 2020-21.

Finally, the BSE Sensex surged 508.06 points or 1.06% to 48,386.51, while the CNX Nifty was up by 143.65 points or 1.00% to 14,485.00.

The BSE Sensex touched high and low of 48,667.98 and 48,152.24 respectively and there 23 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index jumped 0.60%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 3.68%, Metal up by 2.17%, Basic Materials up by 2.05%, Bankex up by 1.97% and Energy was up by 1.32%, while Healthcare down by 0.64% was the lone losing index on the BSE.

The top gainers on the Sensex were Axis Bank up by 4.40%, ICICI Bank up by 3.63%, Ultratech Cement up by 3.61%, SBI up by 2.35% and Hindustan Unilever up by 2.27%. On the flip side, HCL Tech down by 2.87%, HDFC Bank down by 0.66%, Maruti Suzuki down by 0.52%, Sun Pharma down by 0.49% and TCS down by 0.28% were the top losers.

Meanwhile, the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22, to boost the economy grappling with the fresh COVID-19 wave. According to an office memorandum (OM) issued by the Finance Ministry, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget.

To enable ministries/departments expedite capital expenditure, it said the cash management guidelines issued by the Ministry of Finance under the OM of 2017 have been relaxed. It added ‘Monthly Expenditure Plan (MEP) or Quarterly Expenditure Plan (QEP) ceilings and restrictions on bulk expenditure items referred in the OM dated August 21, 2017, shall not be applicable for expenditure under the capital heads under the Budget. These relaxations shall take immediate effect and shall apply until further orders’.

According to the guidelines, the bulk expenditure items of more than Rs 2,000 crore were timed in the last month of each quarter to utilise the direct tax receipt inflows in June, September, December and March. Similarly, big releases of Rs 200 crore to Rs 2,000 crore were timed between the 21st and 25th of a month to take advantage of the GST inflows. These restrictions have been removed with the latest OM. Finance

Minister Nirmala Sitharaman in the Budget 2021-22 had announced a sharp increase in capital expenditure and provided Rs 5.54 lakh crore, which is 34.5 per cent more than the Budget Estimate (BE) of 2020-21. In the BE 2020-21, the government provided Rs 4.12 lakh crore for Capital Expenditure. It was revised upwards to 4.39 lakh crore.

The CNX Nifty traded in a range of 14,421.30 and 14,557.50 and there were 37 stocks advancing against 12 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Axis Bank up by 4.33%, ICICI Bank up by 3.71%, Ultratech Cement up by 3.43%, JSW Steel up by 3.21% and Grasim Industries up by 2.68%. On the flip side, Cipla down by 3.23%, Britannia Industries down by 3.04%, HCL Tech down by 2.81%, BPCL down by 0.98% and HDFC Bank down by 0.66% were the top losers.

European markets were trading mostly in green, France’s CAC increased 5.12 points or 0.08% to 6,263.06 and Germany’s DAX was up by 11.14 points or 0.07% to 15,290.76. On the flip side, UK’s FTSE 100 decreased 7.00 points or 0.1% to 6,931.56.

Asian markets ended mostly higher on Monday following overnight Wall Street gains on strong US economic data, which outweighed concerns of resurgence of Covid-19 infections in Japan and India. Japanese shares settled with modest gains ahead of Bank of Japan's monetary policy decision due on Tuesday, even as a deteriorating Covid-19 situation in the country capped upward movement. However, Chinese shares ended lower amid fears that any further tightening of credit conditions would drag on growth as it recovers from the corona-virus pandemic. Global investors are awaiting cues from key central bank meetings.

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