Nifty closes at record high; Sensex up 98 points

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Late buying across across banks, IT and metal stocks helped Nifty end at a record high of 15,337.85 while Sensex advanced 97.7 points to settle at 51,115 on F&O expiry day.

“Market gained its momentum in the opening hours on hopes of a state-wise unlocking due to declining covid cases. However, RBI’s warning of the risk of a bubble in the equity market in its annual report made the market cautious, forcing it to end flat on the day of the monthly F&O expiry. RBI has noted a disconnect between the market and economy due to Covid. The equity market is valued based on its future earnings growth proposition, which is solid for India today. High liquidity does help the market and RBI has reaffirmed its supportive stance till the economy recovers,” said Vinod Nair, Head of Research at Geojit Financial Services

Gainers & losers

SBI, UltraTech Cement, Bajaj Auto, Kotak Mahindra Bank and Tech Mahindra jumped between 2-3.2% on the Sensex. On the downside, HDFC, Bajaj Finance, ONGC, NTPC & Bharti Airtel slipped up to 2.55%.

Buzzing sectors

The Nifty Bank & Nifty IT indices added around 1.15% each. Nifty Metal rose 0.77% and the Nifty Auto index was up 0.46%. On the other hand, Nifty Realty lost the most slipping 1.19% followed by the Nifty Pharma index that lost 0.19% and the Nifty FMCG index ended almost flat with a marginal loss of 0.01%.

Meanwhile, the volatility gauge India VIX of NSE, which measures how much volatility investors anticipate in the next 30 days, cooled off, ended 4.61% lower at 19.91 levels below the 20-mark.

Broader market

The broader outperformed the benchmark indices as the BSE MidCap index rallied 0.54% and the BSE Smallcap index rose 0.34. The market breadth ended in the favor of bulls as 1,024 shares advanced versus 893 shares declining and 340 scrips remained unchanged.

RBI Annual Report 2020-21

The balance sheet size of RBI increased by 6.99% for the year ended 31 March 2021, mainly reflecting its liquidity and foreign exchange operations. From this year onwards, RBI has changed the accounting year to April – March from July-June earlier. Due to this transition, the accounting year 2020-21 was of nine months only, i.e., July 2020 – March 2021. Thus, data is for a period of nine months of 2020-21 compared with 12 months for the previous year.

The size of the balance sheet increased by Rs 3.73 lakh crore, or 6.99%, from Rs 53.35 lakh crore as on 30 June 2020 to Rs 57.08 lakh crore as on 31 March 2021. While income for the year decreased by 10.96%, the expenditure decreased by 63.10%. The year ended with an overall surplus of Rs 99,122 crore as against Rs 57,127.53 crore in the previous year, representing an increase of 73.51%.

Net income for the nine months stood at Rs 99,126 crore. The central bank said a provision of Rs 20,710.12 crore was made and transferred to the Contingency Fund. No provision was made towards the Asset Development Fund (ADF).

The larger surplus transfer came mostly on account of income earned from sales of foreign exchange. The central bank saw a 69% jump in earnings from foreign exchange transaction, which, together with a lower transfer to its contingency fund, allowed for a larger transfer of surplus to the Government.

Global markets Most European shares were trading lower while Asian markets closed on a mixed note, as investors reacted to the release of Chinese industrial profits data for April.

Earnings at China’s industrial firms grew at a slower pace in April. Profits at China’s industrial firms rose 57% year-on-year in April to 768.63 billion yuan ($120.22 billion), down from year-on-year growth of 92.3% in March, data from the National Bureau of Statistics (NBS) showed on Thursday.

US stocks closed out Wednesday’s session with modest gains as recent comments from Federal Reserve officials helped tamp down concerns about runaway inflation. Shares of companies linked to a recovering economy gained.

The optimism on the economy comes as U.S. average daily Covid cases fall below 25,000 and as nearly half the U.S. population has received at least one vaccination dose.