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Markets rally for third successive session on Wednesday

Indian equity benchmarks sustained the joy of closing in the positive territory for the third successive session on Wednesday, where frontline gauges garner gains of over two percent each, recapturing their crucial 51,400 (Sensex) and 15,200 (Nifty). The markets rally was driven by firm global cues as well as gains in index heavyweights such as Bajaj Finserv, Reliance Industries, Bajaj Finance and ICICI Bank. Key gauges made positive start and stayed in green throughout the session, amid assurances from the government that it had enough COVID-19 vaccine doses to cover its population. The government said there were plenty of COVID-19 vaccines for the country even though it has sent quantities abroad. Sentiments also got boost with Principal economic advisor to the finance ministry Sanjeev Sanyal’s statement that Indian economy is recovering much faster than expected and the government will spend on building infrastructure rather than boosting consumer demand artificially. He also said the country needs to keep the growth momentum and it is the only means to create employment and reduce poverty.

Key indices extended their upward momentum in the late afternoon session, as the growth of India’s service sector expanded at the fastest rate in the month of February, owing to a quicker increase in new orders. Moreover, the roll-out of coronavirus disease 2019 (COVID-19) vaccines led to an improvement in business confidence towards growth prospects. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 55.3 in February from 52.8 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also jumped to 57.3 in February from 55.8 in January. Sentiments were lifted by Former Niti Aayog Vice Chairman Arvind Panagariya’s statement that India's economy is on an 'upswing' and the government's plans for increased spending comes in the backdrop of pro-growth reforms. However, he said that it might take longer to become a $5 trillion economy due to the coronavirus pandemic-induced disruptions. Additional support also came 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. Traders paid no heed to India’s exports marginally declined 0.25 per cent to $27.67 billion in February while imports grew by 6.98 per cent to $40.55 billion during the month. The exports during April-February 2020-21 period stood at $255.92 billion. In the same period a year ago, it was at $291.87 billion, showing a negative growth of 12.32 per cent.

On the global front, Asian markets ended higher on Wednesday, as U.S. Treasury yields retreated and progress in U.S. stimulus talks underpinned optimism about the global economy. Besides, the latest survey from Caixin showed the services sector in China continued to expand in February, albeit at a slower pace, with a services PMI score of 51.5. That's down from 52.0 in January. European markets were trading higher with the latest PMI data and U.K. finance minister Rishi Sunak's budget speech in focus. IHS Markit's final February Composite Purchasing Managers' Index for the euro zone economy rose to 48.8 from January's 47.8, while the services PMI has been finalized at 45.7, up slightly from January's 45.4.

Back home, on the sectoral front, telecom stocks were 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. Auto stocks too were buzzing 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.

Finally, the BSE Sensex rose 1147.76 points or 2.28% to 51,444.65, while the CNX Nifty was up by 326.50 points or 2.19% to 15,245.60.

The BSE Sensex touched high and low of 51,539.89 and 50,512.84, respectively. There were 26 stocks advancing against 3 stocks declining on the index, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.45%, while Small cap index was up by 1.34%.

The top gaining sectoral indices on the BSE were Energy up by 3.74%, Metal up by 3.23%, Finance up by 2.80%, Bankex up by 2.75% and Basic Materials up by 2.09%, while Auto down by 0.62% was the lone losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 5.18%, Reliance Industries up by 4.52%, Bajaj Finance up by 4.47%, ICICI Bank up by 3.50% and HDFC up by 3.43%. On the flip side, Maruti Suzuki down by 1.26%, Bajaj Auto down by 1.24% and Mahindra & Mahindra down by 0.90% were the top losers.

Meanwhile, Principal economic advisor to the finance ministry Sanjeev Sanyal has said that Indian economy is recovering much faster than expected and the government will spend on building infrastructure rather than boosting consumer demand artificially. He also said the country needs to keep the growth momentum and it is the only means to create employment and reduce poverty.

Sanyal has stated that the nominal GDP growth rate in the Union Budget for 2021-22 was projected at around 14 percent, which is a ‘conservative estimate’. He noted that the government is unapologetic about the privatisation of some public sector entities. He said PSUs will exist where it is needed but not where the private sector can do a better job. He also said that there is a need to unleash the spirit of the private sector. He added ‘we will get rid of regulations but will support sectors which needed by extending the PLI (production linked incentive) schemes.’

The data released by the National Statistical Office (NSO) showed after contracting for two quarters in a row, the country's economy grew by 0.4 per cent in the October-December quarter of the current fiscal amid the coronavirus pandemic. The gross domestic product (GDP) had expanded by 3.3 percent in the corresponding period of 2019-20. The economy had shrunk by an unprecedented 24.4 per cent in the first quarter this fiscal following the coronavirus pandemic and resultant lockdowns.

The CNX Nifty traded in a range of 15,273.15 and 14,995.80. There were 43 stocks advancing against 7 stock declining on the index.

The top gainers on Nifty were Tata Steel up by 5.34%, Bajaj Finserv up by 4.98%, Reliance Industries up by 4.80%, Bajaj Finance up by 4.28% and UPL up by 4.16%. On the flip side, Hero MotoCorp down by 1.54%, Maruti Suzuki down by 1.18%, Bajaj Auto down by 1.17%, Mahindra & Mahindra down by 1.00% and BPCL down by 0.57% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 63.06 points or 0.95% to 6,676.81, France’s CAC rose 45.09 points or 0.78% to 5,854.82 and Germany’s DAX was up by 124.16 points or 0.88% to 14,163.96.

Asian markets ended higher on Wednesday as progress in US stimulus talks kept the market sentiment positive. Further, retreat in US Treasury yields from last week's highs and positive vaccine news also boosted sentiment among investors. Chinese shares ended with strong gains as a private survey showed slowing growth in China’s services sector activity last month. The latest survey from Caixin showed the services sector in the country continued to expand in February, albeit at a slower pace with a services PMI score of 51.5, a decline from January’s reading of 52. While, the private sector in Hong Kong moved into expansion territory in February, the latest survey from Markit Economics showed with services PMI score of 50.2, up from 47.8 in January. Japanese shares gained up on investor hopes of a swift global economic recovery from the pandemic-led recession. Although, the services sector in Japan continued to contract in February, albeit at a slower pace, the latest survey from Jibun Bank revealed with a services PMI score of 46.3, up from 46.1 in January.