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Key indices end at record closing highs for third consecutive session
Sep-16-2021

Indian equity benchmarks closed at record closing highs for the third consecutive session on Thursday aided by gains in banking, energy and PSU stocks. Besides, a firm global market mood and recently introduced reforms for the telecom and auto sector pushed the indices to fresh peaks. Markets made positive opening, as sentiments got boost with report that the United Nations Conference on Trade and Development (UNCTAD) has pegged India's economic growth rate to hit a four-year high of 7.2 per cent for 2021 against a contraction of 7 per cent in 2020. At this rate, India would be the fastest growing economy after China, which is projected to grow by 8.3 per cent. Calculations are based on GDP at constant dollars in 2015. Further, some support came in as defence Minister Rajnath Singh said the trust between the government and the industry has gone up following the scrapping of the retrospective taxation regime and the Centre is open to new ideas to further boost the country’s economic growth.

Key indices extended gains in afternoon session, as traders remained positive with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the global economic recovery is strengthening and this is the opportune moment for a change in the world order. He emphasised that a new world order will usher in if the global economy remains open. Additional support came with private report stating that investments by private equity and venture capital funds surged to $10.7 billion in August from $2.2 billion in the same month last year, and $9.7 billion in July this year. Adding to the optimism, Retailers Association of India (RAI) in its latest survey has said that retail sales improved in August and reached 88 percent of the pre-pandemic levels. In July, retail sales stood at 72 per cent of the pre-pandemic levels of July 2019.

On the global front, Asian markets settled mostly lower on Thursday with fears over China Evergrande Group's financial woes and the announcement of more government scrutiny of Macau casinos denting sentiment. Investors also awaited next week's Federal Reserve meeting for more clues on tapering of its bond-buying programs. European markets were trading higher, as sentiment was boosted after data showed the the trade surplus increased to a seasonally adjusted EUR 13.4 billion from EUR 11.9 billion in June. Exports increased 1 percent month-on-month, while imports grew only 0.3 percent. Back home, on the sectoral front, telecom sector’s stocks were in action as the Union Cabinet approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100 per cent foreign investment through the automatic route. There was some buzz in automobile stocks as the Union Cabinet approved a Rs 26,058 crore production linked incentive (PLI) scheme for auto, auto-components and drone industries to enhance India's manufacturing capabilities. The PLI scheme will incentivize the emergence of advanced automotive technologies' global supply chain in India.

Finally, the BSE Sensex rose 417.96 points or 0.71% to 59,141.16 and the CNX Nifty was up by 110.05 points or 0.63% to 17,629.50.    

The BSE Sensex touched high and low of 59,204.29 and 58,700.50, respectively and there were 15 stocks advancing against 15 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Bankex up by 2.12%, Energy up by 1.66%, PSU up by 1.48%, FMCG up by 1.33% and Finance up by 1.25%, while IT down by 0.74%, Basic Materials down by 0.67%, Metal down by 0.64%, TECK down by 0.58% and Utilities down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 7.34%, ITC up by 6.83%, SBI up by 4.46%, Reliance Industries up by 2.07% and Kotak Mahindra Bank up by 1.87%. On the flip side, TCS down by 1.32%, Tata Steel down by 1.25%, Tech Mahindra down by 1.16%, Bharti Airtel down by 1.02% and HCL Technologies down by 0.88% were the top losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its Trade and Development report has pegged India's economic growth rate to hit a four-year high of 7.2 per cent for 2021 against a contraction of 7 per cent in 2020. At this rate, India would be the fastest growing economy after China, which is projected to grow by 8.3 per cent. Calculations are based on GDP at constant dollars in 2015.

It projected India's economy to outpace all other major economies in the next year even though the growth would be slower, at 6.7 per cent, than this year's projected figure. It stated India's economy, which shrank by seven per cent in 2020, showed strong growth of 1.9 per cent in the first quarter of Calendar 2021, on the back of the momentum of the second half of 2020 and supported by government spending in goods and services.

Further, the report said while other Asian economies have, throughout 2020 and into 2021, seen the largest portfolio outflows of all regions–including substantive non-resident investor flight from domestic sovereign bond markets in some cases–the region overall has benefited most from inflows of other investments as well as from strong FDI, in particular, into India.

Besides, it flagged the issue of high retail inflation in India, but did not take into account the easing of the rate of price rise in recent times. It said in India, consumer inflation was already at six per cent before the pandemic. The Covid-19 shock caused a temporary dip in prices, but as the economy recovered and food prices accelerated, the country returned to a six per cent inflation rate in mid-2021.

The CNX Nifty traded in a range of 17,644.60 and 17,510.45 and there were 28 stocks advancing against 22 stocks declining on the index.     

The top gainers on Nifty were Indusind Bank up by 7.31%, ITC up by 6.62%, SBI up by 4.77%, Reliance Industries up by 1.92% and Indian Oil Corporation up by 1.85%. On the flip side, Grasim Industries down by 1.76%, Bharti Airtel down by 1.34%, TCS down by 1.30%, Shree Cement down by 1.26% and Tata Steel down by 1.25% were the top losers.   

European markets were trading higher; UK’s FTSE 100 increased 30.87 points or 0.44% to 7,047.36, France’s CAC increased 65.25 points or 0.99% to 6,648.87 and Germany’s DAX increased 69.88 points or 0.45% to 15,685.88.

Asian markets settled mostly lower on Thursday ahead of next week's US Federal Reserve meeting for more clues on tapering of its bond-buying programs. Chinese shares ended lower, with property stocks declined as Chinese property giant Evergrande Group appeared likely to be unable to repay all of the $89 billion it owes banks and other bondholders. Hong Kong shares hit by heavy declines in the technology and casino sectors. Japanese shares ended lower on profit booking after a recent rally that was led by massive foreign inflows on expectations for fresh economic stimulus under new political leadership, while weak exports data for August also weighing on  market sentiments.

Asian Indices

Last Trade           

Change in Points

Change in %    

Shanghai Composite

3,607.09
-49.13
-1.34

Hang Seng

24,667.85
-365.36
-1.46

Jakarta Composite

6,109.94
-0.29

--

KLSE Composite

-

-

-

Nikkei 225

30,323.34
-188.37
-0.62

Straits Times

3,064.54
5.93
0.19

KOSPI Composite

3,130.09
-23.31
-0.74

Taiwan Weighted

17,278.70
-75.30
-0.43
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