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Markets likely to continue gaining momentum with positive start

Indian markets ended higher for second straight session on Tuesday with gains in Auto and IT stocks as some semblance of calm returned to global bond markets after last week's turmoil. Today, continuing their rising trend for third straight session, the markets are likely make positive start mirroring gains in Asian peers. Traders will be taking encouragement principal economic advisor to the finance ministry Sanjeev Sanyal’s statement that Indian economy is recovering faster than expected and the government will spend on building infrastructure rather than boosting consumer demand artificially. Some support will come as RBI governor Shaktikanta Das expressed optimism about the overall COVID-19 situation following the rollout of the vaccines and complimented all the SAARC central banks for their efforts in combating the pandemic. However, there may be some cautiousness as India’s tally of coronavirus cases has risen to 11,139,323, with a daily increase of 15,704 in total cases. Death toll has reached 157,385, with 110 fatalities in a day. India's count of active cases has jumped to 171,776. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. Auto stocks will be in focus with a private report that Domestic commercial vehicle (CV) sales in February grew in line with a pick-up in manufacturing and infrastructure activities. While the truck segment reported positive growth, the bus segment continues to be in red. Besides, Union Minister Nitin Gadkari has asked automakers to build flex-engine vehicles for using alternative fuel. There will be some reaction in oil & gas sector stocks with report that India's fuel consumption is likely to rise nearly 10 per cent in the fiscal year beginning April 1, as a reflating economy drives petrol and diesel demand. Telecom stocks will be in limelight as India's first auction of telecom spectrum in five years ended with Rs 77,814.80 crore of airwaves being acquired, mostly by Reliance Jio which picked up 488.35 MHz of spectrum for Rs 57,122.65 crore. Bharti Airtel acquired 355.45 MHz at Rs 18,698.75 crore, and Vodafone Idea with 11.80 MHz for Rs 1,993.40 crore. Meanwhile, MTAR Technologies’ Rs 596 crore initial public offering (IPO) will open for subscription today. The company is selling shares in the price band of Rs 574-575 per share.

The US markets settled lower on Tuesday after a wobbly day, pulled down by losses in Apple and Tesla, giving back some of their big gains from a day earlier. Asian markets are trading mostly in green on Wednesday on optimism that US stimulus will energise the global economic recovery.

Back home, Indian equity benchmarks gained for second straight session on Tuesday buoyed by hectic buying in Auto, IT and TECK counters amid positive domestic and global cues. The benchmarks staged a gap up opening, as the finance ministry stated that GST collections crossed the Rs 1 lakh crore-mark for the fifth month in a row in February, rising 7 per cent annually to over Rs 1.13 lakh crore, indicating economic recovery. Goods and Services Tax (GST) collections had risen for two straight months to touch record Rs 1,19,875 crore in January and Rs 1.15 lakh crore in December. However, some profit taking in noon deals led to benchmarks coming off intraday highs. Some concern came after the Biden administration has told the US Congress that India's recent emphasis on import substitution through the ‘Make in India’ campaign has ‘epitomised’ the challenges facing the bilateral trade relationship. In its 2021 Trade Policy Agenda and 2020 Annual Report, the US Trade Representative (USTR) said that during 2020, the US continued its engagement with India to try to resolve longstanding market access impediments affecting US exporters. Though, late buying led to the Sensex and Nifty close near day's highs. Traders also found solace with the Crisil report stated that on the back of timely government and regulatory measures this fiscal, which helped the economy to recover faster than expected, bank credit is seen growing 400-500 bps to 9-10 percent in the next financial year. In the current fiscal, bank credit is expected to rise 4-5 percent despite the sharpest contraction in the economy since Independence. Some support also came with the finance ministry stating that the Centre has released Rs 1.04 lakh crore to states in four months since October 2020, to meet GST compensation shortfall. Traders also took a note of the Reserve Bank of India’s (RBI) statement that Economic activity is gaining steam in India as Covid-19 incidences recede but private investments are missing in action. It also said the ongoing vaccine rollout is releasing pent-up optimism. Finally, the BSE Sensex rose 447.05 points or 0.90% to 50,296.89, while the CNX Nifty was up by 157.55 points or 1.07% to 14,919.10.