Benchmarks end higher on Thursday

The BSE Mid cap index rose 0.80%, while Small cap index was up by 0.99%

Indian equity benchmarks ended higher with gains of over half percent on Thursday, on the back of consistent buying support in index heavyweights -- Reliance Industries, ITC and Infosys. Market opened on a weak note amid mixed global cues. Some concern also came with report indicating that foreign institutional investors (FIIs) have been on a selling spree in India this financial year, with November seeing an outflow of over Rs 17,900 crore in the equity cash market, taking the net outflow in the segment since April to almost Rs 87,000 crore. During the afternoon session, market recovered and gained momentum to enter into green terrain, as traders turned optimistic with a private report stating that Official data print on the GDP will show a 7.8 per cent expansion on a year-on-year basis for the September 2021 quarter. Some support also came Foreign Secretary Harsh Vardhan Shringla’s statement that the government has set an ambitious target of $400 billion exports for financial year 2021-22.

Key gauges extended their gains to trade near day’s high points in late afternoon session, as sentiments were upbeat as Moody’s expects India's economic growth to rebound strongly, pegging GDP growth of 9.3% and 7.9% in fiscal year 2022 (ending on 31 March 2022) and fiscal 2023, respectively. It also said growing government spending on infrastructure will support demand for steel and cement. It added rising consumption, India’s push for domestic manufacturing and benign funding conditions will support new investments. Meanwhile, the Income Tax Department said it has issued refunds of over Rs 1.23 lakh crore so far this fiscal year. This includes 75.75 lakh refunds of Assessment Year (AY) 2021-22 amounting to Rs 15,998.31 crore.

On the global front, Asian markets ended mixed on Thursday, as traders remain concerned about the near-term outlook for the markets and economy amid the resurgence in coronavirus cases and fresh lockdown measures in Europe and several other countries. European markets were trading higher as investors shrugged off data showing that the German economy expanded slightly less than estimated in the third quarter. Revised data from Destatis showed Gross domestic product grew 1.7 percent sequentially in the third quarter, instead of 1.8 percent estimated on October 29. Back home, on the sectoral front, aviation stocks were in focus with a report by rating agency ICRA said after reporting operating loss last year, the airport infrastructure sector in the country is expected to turn around this year with an operating profit of Rs 3,200 crore, driven by a likely 82-84 per cent growth year-on-year in air passenger traffic during the period.  Rubber industry’s stocks too were in watch as the Automotive Tyre Manufacturers Association (ATMA) asked the government to allow free imports of natural rubber to the extent of a projected demand-supply gap of 4.4 lakh tonnes. In scrip specific development, RIL shares gained over six percent after its Board decided to implement a scheme of arrangement to transfer Gasification Undertaking into a wholly-owned subsidiary.

Finally, the BSE Sensex rose 454.10 points or 0.78% to 58,795.09 and the CNX Nifty was up by 121.20 points or 0.70% to 17,536.25. 

The BSE Sensex touched high and low of 58,901.58 and 58,143.86, respectively and there were 14 stocks advancing against 16 stocks declining on the index.    

The broader indices ended in green; the BSE Mid cap index rose 0.80%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Energy up by 4.61%, Realty up by 1.71%, Healthcare up by 1.65%, Telecom up by 1.64% and Utilities up by 1.41%, while Capital Goods down by 0.27%, Auto down by 0.25%, Finance down by 0.18% and Bankex down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 6.10%, ITC up by 1.49%, Infosys up by 1.47%, Tech Mahindra up by 1.24% and Kotak Mahindra Bank up by 1.14%. On the flip side, Indusind Bank down by 1.27%, Maruti Suzuki down by 1.23%, ICICI Bank down by 1.22%, Hindustan Unilever down by 1.12% and Axis Bank down by 0.75% were the top losers.

Meanwhile, in order to mitigate the financial deepening challenges being faced in the country, Niti Aayog has proposed setting up of full-stack ‘digital banks’ or DBs, which would principally rely on the Internet and other proximate channels to offer their services and not physical branches. 

The Niti Aayog, in a discussion paper titled ‘Digital Banks: A Proposal for Licensing & Regulatory Regime for India’, makes a case and offers a template and roadmap for a digital bank licensing and regulatory regime for the country. It said digital banks are banks as defined in the Banking Regulation Act, 1949 (BR Act).

Besides, it mentioned ‘In other words, these entities will issue deposits, make loans and offer the full suite of services that the Banking Regulation Act empowers them to. As the name suggests, however, DBs will principally rely on the Internet and other proximate channels to offer their services.’

The CNX Nifty traded in a range of 17,564.35 and 17,351.70 and there were 25 stocks advancing against 25 stocks declining on the index.  

The top gainers on Nifty were Reliance Industries up by 6.36%, Divi's Lab up by 2.40%, ITC up by 1.78%, Infosys up by 1.56% and Tata Consumer Products up by 1.34%. On the flip side, Maruti Suzuki down by 1.28%, Britannia Industries down by 1.20%, Indusind Bank down by 1.14%, Indian Oil Corporation down by 1.14% and Hindustan Unilever down by 1.11% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 7.99 points or 0.11% to 7,294.31, France’s CAC increased 13.26 points or 0.19% to 7,055.49 and Germany’s DAX increased 23.71 points or 0.15% to 15,902.10.

Asian markets ended mixed on Thursday due to inflation concerns and some US policymakers suggesting that they were ready to speed up the taper if inflation continues to stay high. Worries about fresh lockdowns in Europe outweighed raising optimism over strength in the world's top economy after a batch of strong economic data which included an upwards revision to third-quarter GDP. Seoul shares ended lower as the Bank of Korea raised its key interest rates for the second time since August to fight inflation and fast-rising household debt. Chinese shares declined marginally after Kaisa Group Holdings said it wants to extend the maturity of a $400 million bond by a year-and-a-half as part of efforts to avoid a default and resolve a liquidity crisis. Meanwhile, Japanese shares gained by tracking mostly positive cues from Wall Street overnight.

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