Economic Normalization Kicks In
BSE Realty index skyrocketed by a whopping 22.44 per cent during the fortnight to hit 11-year high of 4,121.22.
Frontline domestic indices Sensex and Nifty ended the fortnight in the red territory, down by 0.42 per cent and 0.30 per cent, respectively. BSE Mid-Cap and Small-cap indices bucked the trend and outperformed the broader markets by gaining 0.71 per cent and 0.75 per cent, respectively. According to Reserve Bank of India, India’s current account balance posted a surplus of USD 6.5 billion in Q1FY22 (i.e. 0.9 per cent of GDP) as against a deficit of USD 8.1 billion in Q4FY21. The surplus was on account of contraction in the trade deficit for goods to USD 30.7 billion from USD 41.7 billion in Q4FY21 and a rise in net services receipts.
Rating agency ICRA has revised GDP growth forecast to 9 per cent for 2021-22 from its earlier estimate of 8.5 per cent on the back of surging virus vaccination drive across the country and ameliorating advanced estimates of kharif crops. Goods and Services Tax collections for September came in at Rs 1.17 lakh crore, versus Rs 1.12 lakh crore in August. September was the third consecutive month that recorded GST collections above the Rs 1 lakh crore mark, indicating robust economic recovery post the second wave of the pandemic. The total GST collection for the first half of FY22 stands at Rs 6.82 lakh crore.
BSE Auto index gained 2.29 per cent during the fortnight to end at 23,814.74. September sales figures saw Maruti Suzuki and Tata Motors register a month-on-month decline of almost 40 per cent and 8.2 per cent respectively. Maruti Suzuki has also announced that total production at all its manufacturing locations will be 60 per cent of the normal production in October. Persisting semiconductor shortage and rise in input costs continue to weigh down the auto industry. BSE Power index touched a fresh 10-year high of 3,241.19, its highest level since November 2010. According to data from the power ministry, India’s power consumption grew by 1.83 per cent in September to 114.49 billion units (BU), exhibiting subdued recovery.
With eased lockdown restrictions in several states, power generation, demand and consumption is expected to pick up pace in the coming months as normalization of economic activities kicks in. BSE Realty index skyrocketed by a whopping 22.44 per cent during the fortnight to hit 11-year high of 4,121.22. Low home loan rates are improving affordability and will give a fillip to demand for residential properties in the upcoming festive season. Approximately 30 firms are expected to float IPOs during October-November and collectively raise over Rs 45,000 crore.
Prominent names include Policybazaar, Nykaa, MobiKwik Systems, CMS Info Systems and Emcure Pharmaceuticals. Trading data shows that FIIs and DIIs were net buyers to the tune of Rs 1,713.41 crore and Rs 5,995.15 crore, respectively, during the fortnight.
