IGI Logo

Indian markets ended over 1.5 percent higher on Monday, recovering from a 3 percent decline in the previous session, as bond markets calm triggering a rally in the global peers. Today, the markets are likely to open higher, extending gains for another session, following a rally in global peers. Some support will come with the finance ministry stating 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. Besides, the Reserve Bank of India (RBI) remained net buyer of the US dollar in December after it purchased $3.991 billion from the spot market. Also, the government is aiming to attract investment worth Rs 3.39 lakh crore during Maritime India Summit 2021 in various projects. However, traders may be concerned as India's count of active cases has risen to 169,786. On Monday, the country registered 11,563 fresh Covid-19 cases, taking its the caseload tally to 11,123,619. India continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. There may be some cautiousness with a private report that food inflation in India will probably accelerate in the coming months on stronger prices of fruits, vegetables and chicken following poor supplies. Meanwhile, India's market regulator SEBI proposed tighter eligibility and appointment rules for independent directors of listed companies, a move seen aimed at protecting minority investors. The Securities and Exchange Board of India (SEBI) proposed that if listed companies in India wish to appoint or remove independent directors they should require the 'dual approval' of shareholders and a majority of the company's minority investors. There will be some buzz in banking sector stocks as RBI data showed bank credit grew by 6.58 per cent to Rs 107.04 lakh crore, while deposits rose by 11.75 per cent to Rs 147.81 lakh crore in the fortnight ended February 12. Aviation stocks will be in focus as rating agency ICRA said there could be a delay in the commercialisation of expanded capacity by 9-12 months, and expecting domestic air passenger traffic to return to the pre-COVID-19 level by the financial year 2022-23 and international by 2023-24.

The US markets ended higher on Monday as bond markets calmed after a month-long selloff, while another COVID-19 vaccine getting US approval and fiscal stimulus bolstered expectations of a swift economic recovery. Asian markets are trading mostly in green on Tuesday as a halt in a recent bond markets sell-off calmed investor nerves and lifted riskier assets, although oil prices were on the defensive on fears of slowing Chinese energy consumption.

Back home, Indian equity benchmarks rebounded on Monday amid a broad-based buying after the benchmark indices suffered their biggest one-day drop on Friday. Markets, after a gap-up start, traded with optimism throughout the session, as India’s Gross Domestic Product (GDP) grew by 0.4 per cent for the October-December quarter (Q3) of current fiscal (FY21). The GDP growth has returned the economy to the pre-pandemic times of positive growth rates. It is also a reflection of a further strengthening of V-shaped recovery that began in Q2 of 2020-21, after a large GDP contraction in Q1 followed one of the most stringent lockdown imposed by Government relative to other countries. Sentiments remained up-beat as data released by the Ministry for Commerce and Industry showed that the core sector index, which measures output of eight infrastructure industries, rose marginally by 0.1 per cent in January, indicating a wobbly recovery from the pandemic shock. Output in five of the eight crucial sectors fell on a year-on-year (YoY) basis. However, the strong trade turned mildly volatile in the noon deals as they trimmed most of gains, after Indian manufacturing activity eased marginally in the month of February but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - stood at 57.5 in February as against 57.7 in January.  But, markets regained traction to end higher, taking support from the labour ministry stating that retail inflation for industrial workers eased to 3.15 per cent in January against 7.49 per cent in the same month last year, mainly due to lower prices of certain food items. Adding more optimism on the street, India Ratings and Research (Ind-Ra) upgraded its FY21 credit growth estimates to 6.9 per cent from 1.8 per cent, given the improved economic environment in 2H FY21 and the government's focus on higher -- spending especially on infrastructure. Finally, the BSE Sensex rose 749.85 points or 1.53% to 49,849.84, while the CNX Nifty was up by 232.40 points or 1.60% to 14,761.55.

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer