Macro data, global stock rally, FII flows among major drivers for Indian markets this week

Last updated: 01 Apr, 2021 | 01:49 pm

Macro data, global stock rally, FII flows among major drivers for Indian markets this week

The markets saw another interesting week, with the Nifty see-sawing between losses and gains in the holiday-shortened March 30th (Tuesday) to April 1 (Thursday) period. The market was closed on Monday on account of Holi. The Nifty advanced on Tuesday, closing 2.3% higher, as expectations of better macro numbers, global market rally, reduced FII selling kept sentiments upbeat.   However, the Nifty declined on the last day of FY21, as rise in US 10-year treasury yields, increasing Covid-19 cases, and rise in US treasury yields dampened sentiment. Nifty closed around 1% down on Wednesday. The Indian equity market rebounded on Friday to start the new financial year on a robust note, amid optimism in the global markets. The announcement by US President Joe Biden to invest $2.3 trillion in infrastructure was a driving factor. During the week, newsflow about macro data, Covid-19 cases, new listings, FY closing, Small Saving Scheme investments dominated sentiments. The market is closed on Friday, on account of Good Friday. 

Top gainers and losers

  • All sectoral indices give positive returns. Metal, PSU Bank among top gainers
  • Nifty PSU Bank rises 4.7% and Midcap Index nearly 4% for the week. Both Nifty PSU Bank & Midcap Index post biggest gains since the budget week.
  • 46 Nifty Stocks record gains in the week. JSW, Tata Steel, UPL Up Over 10% Each.

Here is a quick recap of the market moving developments:

  • GST collections hit record high: India's goods and services tax (GST) collection touched a record high of Rs 1.24 lakh crore in March, indicating economic recovery. At 1.24 lakh crore in Mar, GST collections are up 9.7% on monthly basis, and higher by 27% on-year. This was the sixth consecutive month that GST collections have been higher than Rs 1 lakh crore.

  • Robust Auto sales data: Two-wheelers and three wheeler manufacturers reported robust sales growth in the domestic market in March, on the back of increased demand for personal mobility amid the COVID-19 pandemic. The market leader Maruti Suzuki’s total sales doubled to 1.67 lakh in March-21, as against 83,792 units in the previous year. Two-wheeler leader Hero MotoCorp sold 5.76 lakh units, up 72% on-year.
  • Core Sector data: While the rise in GST collections came as a boost, Core Sector data came as a disappointment. India’s eight infrastructure sectors declined 4.6% in February, the sharpest contraction in the last six months. Given the sharp base effect, the core sector output is estimated to expand by 9-11% in March 2021, which should result in modest growth of around 2% in Q4FY21, according to estimates by ICRA.
  • World bank raises India’s GDP forecast: World Bank has raised Indian GDP growth prediction for FY22 10.1% from 5.4% projected earlier. Given the significant uncertainty amid COVID-19 effects on the economy, the real India GDP growth could be in the range from 7.5% to 12.5%, according to its estimates.
  • Decision on Small Savings Interest rate cut reversed: The government has reversed its decision to cut interest rates of small savings schemes. This came after the Ministry of Finance had on March 31 announced a cut in the small savings schemes by 50 to 110 basis points for the first quarter of the financial year starting April 1, 2021.

  • Nazara Technogies sees huge listing gains: Shares of Nazara Technologies made an impressive listing on the bourses on Tuesday. The shares of the gaming firm listed at Rs 1,971 — a 80% premium of the issue price of Rs 1,101 per share — on the BSE. However, the shares gave up some gains post listing on heavy profit booking. The stock closed Thursday's session at Rs 1,662, up 50% from the issue price.

Gold prices rebound

Gold prices recovered marginally in the week after US President Joe Biden unveiled his 'once-in-a-generation' investment infra plan of more than $2 trillion in transportation, telecoms and energy infrastructure. The investors are concerned that the stimulus measures will stoke inflationary pressure, leading them to buy the yellow metal as a hedge against it.

Check out our other analysis on important market developments!

US markets last week: Volatile crude, bond yields, Fed commentary on investors' radar: Most of the global markets ended lower in the week, as US Treasury Yields soared to their highest levels in one-year, raising concerns of FII outflows from economies. While central banks around the world maintained their dovish policy stance to support an economic recovery, concerns about a resurgence in coronavirus infections in certain countries soured sentiments. View our analysis

US Treasury Yield soars to one-year high: The concern is that the US Federal Reserve will have to taper its bond purchases and consider interest rate hikes due to rise in inflation, similar to ‘taper tantrum’ witnessed in 2013. ‘Taper tantrum’ is a phrase used to describe the surge in the U.S Treasury yields in 2013. The surge had come after the Fed’s announcement of future tapering of its policy of quantitative easing, inroder to reduce liquidity in the economy. Read our analysis here

How global and Indian markets fared in 2021: Key equity market indices in the USA ended higher in February. After registering notable gains in the first 20 days, indices in the US markets fell in the last 10 days of the months. Here’s our analysis.

Nifty Q3 earnings review: Most of the companies in the Nifty 50 index have reported better-than-estimated results in Oct-Dec 20 period, signalling that Nifty companies have left pandemic blues behind. Check our detailed review.

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