Market trades in range; breadth strong
(07-Apr-2021, 13:26 Hours IST)  

The benchmark indices were trading in a narrow range near the day's high in afternoon trade. At 13:20 IST, the barometer index, the S&P BSE Sensex, surged 559.30 points or 1.14% at 49,760.69. The Nifty 50 index soared 154 points or 1.05% at 14,837.50.

Reliance Industries (up 1.63%), ICICI Bank (up 2.04%) and Infosys (up 0.89%) boosted the indices.

The broader market lagged the Sensex. The S&P BSE Mid-Cap index rose 0.48%. The S&P BSE Small-Cap index added 1.09%.

Buyers outnumbered sellers. On the BSE, 1,811 shares rose and 988 shares fell. A total of 203 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,092.75 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 416.59 crore in the Indian equity market on 6 April 2021, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 13,24,47,475 with 28,73,334 deaths. India reported 8,43,473 active cases of COVID-19 infection and 1,66,177 deaths while 1,17,92,135 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India detected 115,736 new cases of the novel coronavirus on Tuesday, the highest daily increase so far. Nearly 55,000 cases were detected in Maharashtra, while Chhattisgarh scaled a new peak of 9,921 cases. Karnataka, Uttar Pradesh and Delhi reported more than 5,000 cases each.

RBI Policy Outcome:

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), announcing its first bi-monthly monetary policy of the 2021-22 fiscal today, voted to leave policy repo rate unchanged at 4%. MPC maintained accommodative stance in unanimous vote.

RBI Governor Shaktikanta Das said that the CPI inflation trajectory likely to be subject to both upside and downside pressures. The central banker further said that the projection for CPI inflation has been revised to 5% in Q4 of financial year 2020-21, 5% in Q1 FY22, 5.2% in Q2, 4.4% in Q3 and 5.1% in Q4 with risks broadly balanced.

While the RBI maintained its FY22 real GDP growth projection at 10.5%, the RBI Governor said that the recent surge in COVID-19 infections has given greater uncertainty on growth outlook.

In an endeavour to sustain congenial financing conditions, the RBI has decided to put in place a secondary market G-sec acquisition programme (G-SAP). The central bank has decided to announce a G-SAP of Rs 1 lakh crore in Q1FY22.

The RBI also extended the deadline for TLTRO on-tap liquidity scheme to 30 September 2021 from 31 March 2021. It has also decided to conduct such auctions of longer tenors, following the success of variable reverse repo rate auctions. The amount and the tenor of these auction will be announced later by the RBI.

The central bank will provide liquidity support of Rs 50,000 crore to all-India financial institutions and it has also proposed to constitute a committee to comprehensively review the functioning of asset reconstruction companies.

The RBI has decided to accept the recommendations of an advisory committee that reviewed ways and means advance limits to states and union territories. The aggregate ways and means advance limit of all states and UTs will be enhanced to Rs 47,010 crore, an increase of 46%.

Gainers & Losers:

JSW Steel (up 3.54%), State Bank of India (SBI) (up 3.27%), PowerGrid Corporation of India (up 2.99%), Bharti Airtel (up 2.56%) and IndusInd Bank (up 2.35%) were major gainers in Nifty 50 index.

Adani Ports & Special Economic Zone (APSEZ) (down 3.42%), Tata Consumer Products (down 1.83%), UPL (down 0.13%) and Tata Consultancy Services (TCS) (down 0.05%) were major losers in Nifty 50 index.

Stocks in Spotlight:

Cholamandalam Investment and Finance Company jumped 4.63% after the company announced that it is one of the companies participating in a consortium of Vishwakarma Payments, that has applied for a new umbrella entity license for retail payments with RBI. Vishwakarma Payments is a company incorporated in India under the Companies Act, 2013. FSS, Zoho, Zerodha, RazorPay, Ujjivan and Airpay are also part of the Vishwakarma Payments consortium along with Cholamandalam Investment and Finance Company.

Dixon Technologies (India) rose 0.89%. Bharti Enterprises and Dixon Technologies (India) signed MoU to form a joint venture (JV) company to apply for Government of India's production linked incentive (PLI) scheme for manufacturing telecom & networking products. Dixon's wholly owned subsidiary - Dixon Electro Appliances or any other company identified by the parties will be the JV company, which will undertake manufacturing of telecom and networking products like modems, routers, set top boxes, IOT devices, etc. for the telecom sector/industry including Airtel.

Tata Steel gained 1.60% after the steel major reported its highest ever annual deliveries despite COVID-19 driven disruption. Tata Steel India achieved highest ever quarterly crude steel production of 4.75 million tons with a 3% quarter on quarter growth for Q4 FY21 over Q3 FY21. The crude steel production rose 0.42% year on year from 4.73 million tonnes posted in Q4 FY20. Full year FY21 production was lower by 7% year on year primarily due to the disruption caused by COVID-19 pandemic in 1H FY21.

Tata Steel India delivery volume increased by 16% year on year to 4.67 million tons in Q4 FY21; domestic deliveries increased 22% year on year to 4.17 million tons on the back of company's robust marketing network and improved market conditions. Exports were at 11% of overall deliveries. Tata Steel said its India business achieved highest ever annual delivery volume of 17.30 million tons in FY21, despite the COVID-19 pandemic induced disruption in first half of fiscal year 2021.

Global Markets:

Shares in Europe and Asia advanced on Wednesday. US stocks fell from record levels on Tuesday as the recent rally driven by signs of strong economic rebound took a pause.

On Tuesday, California Governor Gavin Newsom said that the state will reopen its economy by June 15 provided that coronavirus vaccine and hospitalization cases remain stable.

The IMF on Tuesday projected an impressive 12.5% growth rate for India in 2021, stronger than that of China, the only major economy to have a positive growth rate last year during the COVID-19 pandemic. The Indian economy is expected to grow by 6.9% in 2022.

The IMF revised up its forecast for the world economy. On Tuesday, the organization said it expects growth at 6% in 2021, up from a January prediction of 5.5%, and Chief Economist Gita Gopinath said that despite lingering uncertainties around the pandemic, a “way out of this health and economic crisis is increasingly visible.”

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