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Markets continue upward trend for fifth consecutive day
Jun-02-2020

Bringing up fifth-day of gains, Indian equity benchmarks finished Tuesday’s session on a higher note, driven by strong buying across Realty and Banking stocks amid positive cues from global markets. After opening on a tepid note, key indices gained traction and traded in fine fettle, as investors took encouragement with the India Meteorological Department’s (IMD) statement that the Southwest monsoon arrived in India on June 01 with heavy rainfall over several places in Kerala, marking the commencement of the four-month long rainfall season. It also upgraded its forecast for 2020 rainfall to 102% of the Long Period Average (LPA), from the 100% in April. The forecast is with a model error of plus and minus of 4%. Sentiments also remained up-beat as the Centre rolled out Rs 20,000 crore distressed asset fund to extend support to promoters of distress units, in order to support stressed micro, small and medium enterprises (MSMEs).

Buying got intensified in the late afternoon session, as sentiments remained buoyant with Prime Minister Narendra Modi’s statement that India will definitely get its economic growth back as the government continues to pursue various reforms. He said the government has taken tough steps to fight the coronavirus pandemic and has also taken care of the economy. Market participants paid no heed towards report that Moody’s has downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2, saying there will be challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position.

On the global front, Asian markets ended higher on Tuesday, while European markets were trading in green, as hopes of economic recovery after the epidemic of the coronavirus helped offset jitters over increasingly violent social unrest in the U.S. and rising U.S.-China tensions. Back home, sugar stocks ended higher as industry body ISMA stated that with further relaxations in COVID-19 lockdown rules, sugar demand in India, the world's second largest producer of the sweetener, has started picking up and will further improve with opening of hotels and restaurants. Non-banking finance companies (NBFC) stocks were in focus with Moody’s report that the Reserve Bank of India's decision to extend the moratorium on loan repayment by three more months will be credit negative for NBFC.

Finally, the BSE Sensex gained 522.01 points or 1.57% to 33,825.53, while the CNX Nifty was up by 152.95 points or 1.56% to 9,979.10.

The BSE Sensex touched high and low of 33,866.63 and 33,301.29, respectively and there were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.20%, while Small cap index was up by 1.83%.

The top gaining sectoral indices on the BSE were Realty up by 4.57%, Bankex up by 3.25%, Finance up by 3.12%, Consumer Durables up by 2.08%, Utilities up by 2.06% and Industrials up by 1.76%, while FMCG down by 0.54% was the lone losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 8.64%, Kotak Mahindra Bank up by 7.52%, Indusind Bank up by 6.05%, HDFC up by 4.43% and Power Grid up by 3.81%. On the flip side, Maruti Suzuki down by 1.74%, ITC down by 1.69%, NTPC down by 1.23%, Nestle down by 0.95% and Bharti Airtel down by 0.19% were the top losers.

Meanwhile, in order to avoid travelling to banks for renewals during COVID pandemic period, the Union Cabinet has given its approval to extend repayment date up to August 31, 2020 for Standard Short-Term loans up to Rs 3 lakh advanced for agriculture and allied activities by banks, which have become due or shall become due between March 1, 2020 and August 31, 2020 with continued benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers.

The Extension of repayment date for Standard Short-Term loans will help the farmers to repay/renew such loans up to the extended repayment date of August 31, 2020 at 4% p.a., interest without attracting any penalty and thus help them in avoiding travelling to banks for such renewal during this COVID pandemic period.

The government is providing concessional Standard Short-Term Agri-loans to farmers through banks with 2% p.a, interest subvention to banks and 3% additional benefit on timely repayment to farmers thus providing loans up to Rs 3 lakh at 4% p.a. interest on timely repayment.

The CNX Nifty traded in a range of 9,995.60 and 9,824.05 and there were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 9.51%, Zee Entertainment up by 9.06%, Bajaj Finance up by 8.15%, Kotak Mahindra Bank up by 7.69%, Tata Motors up by 7.37%. On the flip side, Coal India down by 3.30%, Maruti Suzuki down by 1.87%, BPCL down by 1.39%, ITC down by 1.27% and Dr. Reddys Lab down by 1.20% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 60.35 points or 0.98% to 6,226.77, France’s CAC rose 87.96 points or 1.85% to 4,850.74 and Germany’s DAX was up by 394.17 points or 3.4% to 11,981.02.

Asian markets ended higher on Tuesday as optimism of a quicker global economic recovery after corona virus pandemic outweighed anxiety over increasingly violent social unrest in the US as well as rising Sino-US tensions. Sentiments also got a boost from overnight Wall Street gains after US manufacturing data suggested the worst of the sector's virus-related slump may be over. Meanwhile, market participants eyed tensions between the US and China, after Chinese government officials reportedly ordered its state-run agricultural firms to temporarily halt buying some US farm goods.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,921.40
5.97
0.20

Hang Seng

23,995.94
263.42
1.11

Jakarta Composite

4,847.51
93.90
1.98

KLSE Composite

1,507.69

17.55

1.18

Nikkei 225

22,325.61
263.22
1.19

Straits Times

2,611.63
60.77
2.38

KOSPI Composite

2,087.19
22.11
1.07

Taiwan Weighted

11,127.93
48.91
0.44
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