Sensex gains 98 points; Nifty settles at 15,338

The domestic equity markets ended the volatile session with marginal gains on Thursday, May 27, 2021. Domestic stocks appreciated amid mixed global cues.

The S&P BSE Sensex gained 97.70 points or 0.19 per cent to close at 51,115.22. The Nifty at the National Stock Exchange also added 36.40 points or 0.24 per cent to settle at 15,337.85. The Nifty Bank index rose 410.85 points or 1.18 per cent to settle at 35,095.05.

In the broader market, the BSE MidCap index rose 0.54 per cent and the BSE SmallCap index added 0.34 per cent. Both these indices outperformed the Sensex.

Buyers outpaced sellers. On the BSE, 1,756 shares rose and 1,364 shares fell. On the Nifty 50 index on the NSE, 34 shares advanced and 16 shares declined. The top five gainers on Nifty were Shree Cement (up 4.12 per cent), State Bank of India (up 3.13 per cent), Bajaj Auto (up 2.22 per cent), Kotak Mahindra Bank (up 2.08 per cent) and Tech Mahindra (up 2.03 per cent). The top five losers were HDFC (down 2.67 per cent), ONGC (down 1.50 per cent), IOC (down 1.43 per cent), Bajaj Finance (down 1.41 per cent) and Bharti Airtel (down 1.11 per cent).

COVID-19 update

Total COVID-19 confirmed cases worldwide were at 16,84,17,658 with 34,98,557 deaths. India reported 24,19,907 active cases of COVID-19 infection and 3,15,235 deaths while 2,46,33,951 patients have been discharged, data showed.

RBI Annual Report 2020-2021

The balance sheet size of RBI increased by 6.99 per cent for the year ended March 31, 2021. It mainly reflects its liquidity and foreign exchange operations. From this year onwards, RBI has changed the accounting year to April-March from June-July 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 per cent from Rs 53.35 lakh crore as of June 30, 2020, to Rs 57.08 lakh crore as of March 31, 2021. While income for the year decreased by 10.96%, the expenditure decreased by 63.10 per cent. 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 per cent. 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).

Signals of Policy Shifting by Central Banks

According to a report by Bloomberg, the Central banks have started to tip toe away from their emergency monetary settings, with South Korea following in the footsteps of New Zealand, Canada to flag a potential interest-rate increase. As vaccine roll-outs continue and economies reopen, traders have been slowly dialling up expectations on rate hikes or a slowing of asset purchases elsewhere also.

The report suggests, on Thursday, the Bank of Korea became the latest to signal a turn when Governor Lee Ju-yeol said policymakers are preparing for an orderly exit from its record-low interest rate at some point as the economy recovers.

The shift in stance came a day after New Zealand's. New Zealand's outlook was much more hawkish than expected and may yet signal a global shift, according to a chief economist at a bank in New Zealand. Financial markets have already brought forward pricing of the Federal Reserve's first rate hike by almost a year since early February. In the same period, market expectations from the Bank of England have switched from rate cuts by late 2022 to a rate hike while investors have almost abandoned bets on further European Central Bank reductions to instead price in a 10 basis-point upward move by the end of 2023.