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Markets extend opening gains to trade firm; Nifty regains 18,300 mark
Oct-22-2021

Indian equity benchmarks made optimistic start on last trading day of week amid mixed global cues. Soon, markets extended their gains and are trading in fine-fettle with gains of over half a percent each in early deals. Buying in all the sector indices except metal aided the domestic markets. Sentiments got a boost with Niti Aayog Vice Chairman Rajiv Kumar's statement that Indian economy is expected to grow 10.5 per cent or more in the current fiscal. Adding more optimism, ICRA stated that with half of the 15 high-frequency indicators recovering to the pre-pandemic levels in the second quarter, the economy finally looks nearly out of the pandemic woods, helping the Q2 GDP print at 7.7 per cent. Some support also came in as Union Minister Hardeep Singh Puri exuded confidence that India will become a $5-trillion economy by 2024-25 and $10-trillion by 2030. Meanwhile, Commerce and Industry Minister Piyush Goyal said that all indicators, including GDP, foreign direct investment (FDI) inflows and exports growth, are pointing towards a clear and sharp economic recovery in the country.

On the global front, Asian markets traded mostly higher following the mixed cues overnight from Wall Street, as traders reacted to upbeat earnings news, labor data and home sales data from the U.S., with the sinking crude oil prices dragging the markets. Though, traders remain concerned about the coronavirus situation in the region, which is hindering economic activity.

Back home, banking stocks were in focus with a report that the government is likely to pump capital in public sector banks during the last quarter of the current financial year to meet the regulatory requirements. In scrip specific development, Reliance Industries (RIL) is in limelight as it is scheduled to announce its results for the September quarter (Q2FY22) later in the day. Indian Energy Exchange (IEX) traded higher on reporting 75% jump in consolidated net profit at Rs 77.38 crore for the September quarter. However, LIC Housing Finance came under pressure as its Q2FY22 net dips 68.7% to Rs 247.86 on a YoY basis on the back of fall in interest income and sharp rise in expenses for impairments.

The BSE Sensex is currently trading at 61396.14, up by 472.64 points or 0.78% after trading in a range of 61005.56 and 61407.62. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.67%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Realty up by 2.19%, Consumer Durables up by 1.87%, Consumer discretionary up by 0.93%, Telecom up by 0.77%, Industrials up by 0.63%, while Metal down by 0.47% was the sole losing index on BSE.

The top gainers on the Sensex were Titan Company up by 3.68%, HDFC up by 2.82%, Bajaj Finserv up by 2.50%, Bajaj Auto up by 2.31% and HDFC Bank up by 1.70%. On the flip side, Asian Paints down by 1.58%, NTPC down by 0.44%, Nestle down by 0.33% and ICICI Bank down by 0.15% were the few losers.

Meanwhile, Icra Rating has said that the economy finally looks nearly out of the pandemic woods, helping the Q2 GDP print at 7.7 per cent, with half of the 15 high-frequency indicators recovering to the pre-pandemic levels in the second quarter. However, the September print was not as good as the quarter, indicating that the recovery remains uneven. Icra Rating chief economist Aditi Nayar said while continued base normalisation, emerging supply-side constraints and excess rainfall have dampened the year-on performance of most of the 15 high-frequency indicators in September, the economic recovery has widened in Q2 as the crisis wrought by the second wave has abated, with a larger number of sectors bettering their pre-pandemic performance, relative to Q1.

The annualised performance of 14 of the 15 high-frequency indicators, except non-food bank credit, have worsened in September compared to August. Accordingly, Nayar projects real GDP in Q2 to have mildly trailed the level of Q2 of FY2020, at 7.7 per cent, compared to 2.21 per cent in Q1, led by the continued subdued performance of the contact-intensive sectors. She also expects the daily average generation of the GST e-way bills in October to surpass the peaks seen in February-March 2021, indicating a better print of the growth numbers in the second half of the current fiscal. Despite the widened recovery in Q2 with a larger number of sectors bettering their pre-pandemic performance, Nayar said the revival is multi-speed, with a considerable variation in the pace of growth across sectors.

There is also the growing evidence of a K-shaped recovery, as is evidenced by the sharp disparity in the performance of the stock markets, robust growth in direct tax collections and improved business sentiment, juxtaposed with the continued pessimism displayed by urban households in the RBI's latest consumer confidence survey. The low performance in September was mainly on account of a combination of factors such as continued base normalisation (especially for motorcycles and scooters, domestic airline passenger traffic, and generation of GST e-way bills), supply-side constraints (non-availability of semi-conductors particularly for passenger vehicles) and excess rainfall.

The CNX Nifty is currently trading at 18308.10, up by 130.00 points or 0.72% after trading in a range of 18204.20 and 18312.95. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 3.28%, HDFC up by 2.69%, Bajaj Finserv up by 2.61%, Bajaj Auto up by 2.33% and HDFC Bank up by 1.65%. On the flip side, Hindalco down by 1.81%, Asian Paints down by 1.27%, Tata Motors down by 1.13%, Coal India down by 1.07% and BPCL down by 0.49% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 206.21 points or 0.72% to 28,914.79, Straits Times rose 8.52 points or 0.27% to 3,197.02, Hang Seng jumped 116.33 points or 0.45% to 26,133.86, Taiwan Weighted added 1.30 points or 0.01% to 16,890.81, KOSPI advanced 6.28 points or 0.21% to 3,013.61 and Shanghai Composite was up by 3.40 points or 0.09% to 3,598.18, while Jakarta Composite fell 3.25 points or 0.05% to 6,629.72.

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