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Benchmarks trade in fine-fettle in early deals; Nifty reclaims 10,100 mark
Jun-03-2020

Indian equity benchmarks made optimistic start on Wednesday, extending their 5-day rally, mirroring positive global cues. Markets are trading in fine-fettle with gains of over a percent each in early deals, led by buying in Bankex, Consumer Durables and Industrials counters. Sensex and Nifty reclaimed their physiological levels of 34,200 and 10,100, respectively. Investors are eyeing the PMI Services data for May to be announced later in the day. Traders got encouragement as Prime Minister Narendra Modi assured India Inc that growth in the economy will return soon as the government continues to pursue multiple reforms. He added that with unlock phase-1 India has already begun getting its growth back. Some support also came as the World Bank urged countries to go for comprehensive policies to boost long-term growth along with short term measures to address health emergencies and secure core public services in the wake of the coronavirus crisis, amid indications that 60 million people could be pushed into extreme poverty in 2020. Meanwhile, the data compiled by Worldometer showed that India has seen a surge of over 8,500 cases in a day, taking its total number of coronavirus cases to 207,191. The country's death toll now stands at 5,829.

On the global front, all the Asian markets are trading in green, extending gains from the previous session following the positive cues overnight from Wall Street amid optimism about an economic recovery and on hopes of more stimulus measures. Investors shrugged off worries about the spreading civil protests in the US over the death of George Floyd at the hands of Minneapolis police officers. Besides, the latest survey from Jibun Bank revealed that the services sector activity in Japan continued to contract in May, albeit at a slower rate, with a PMI score of 26.5.

Back home, the sugar stocks were in focus with industry body ISMA’s statement that with further relaxations in COVID-19 lockdown rules, sugar demand in India has started picking up and will further improve with opening of hotels and restaurants. In scrip specific developments, Reliance Industries gained after its mega rights issue was subscribed more than 1.3 times on the penultimate day of the offer. Britannia Industries soared after it reported a 26% year-on-year jump in its fourth quarter net profit.

The BSE Sensex is currently trading at 34275.66, up by 450.13 points or 1.33% after trading in a range of 34177.91 and 34422.71. There were 24 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.40%, while Small cap index was up by 1.89%.

The top gaining sectoral indices on the BSE were Bankex up by 3.00%, Consumer Durables up by 2.40%, Industrials up by 1.86%, Consumer Discretionary up by 1.64%, Capital Goods up by 1.61%, while Telecom down by 0.48%, TECK down by 0.19%, IT down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 5.72%, ICICI Bank up by 4.30%, Axis Bank up by 3.81%, Indusind Bank up by 3.09% and ONGC up by 3.02%. On the flip side, Bharti Airtel down by 0.51%, TCS down by 0.48%, Hindustan Unilever down by 0.35%, HCL Technologies down by 0.28% and Infosys down by 0.13% were the top losers.

Meanwhile, former finance secretary Subhash Chandra Garg has said the Indian economy will shrink by 10 percent or Rs 20 lakh crore in current financial year (FY21), the first contraction in over 40 years, due to a faulty COVID lockdown. He said that FY21 will go down in the history of India as the year when India got way-laid from its story of three decadal outstanding growth.

Garg further said that the government's Rs 21 lakh crore stimulus package is actually of only Rs 1.4-1.5 lakh crore or about 0.7 percent of the country's gross domestic product (GDP). Pointing out that India was not in the pink of economic health in FY20, he said the economy grew barely by 4 percent for the year which happens to be the lowest growth rate in last 11 years.

Besides, he termed India's lockdown strategy to contain spread of coronavirus as faulty. He argued ‘the lockdown was imposed under a naive belief that India would be able to eliminate COVID-19 from the face of India in three weeks' time.  India decided to use the brahmastra - total economic and human lockdown - on the entire country when only a tiny part was infected.’

The CNX Nifty is currently trading at 10114.95, up by 135.85 points or 1.36% after trading in a range of 10093.85 and 10159.35. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 5.12%, Bajaj Finance up by 5.06%, Britannia Industries up by 5.04%, ICICI Bank up by 4.33% and Tata Motors up by 3.83%. On the flip side, Bharti Infratel down by 1.72%, Bharti Airtel down by 0.77%, Wipro down by 0.74%, Adani Ports & SEZ down by 0.44% and Hindustan Unilever down by 0.38% were the top losers.

All the Asian markets are trading in green; Nikkei 225 surged 230.09 points or 1.03% to 22,555.70, Straits Times jumped 48.33 points or 1.85% to 2,659.96, Hang Seng rose 283.20 points or 1.18% to 24,279.14, Taiwan Weighted soared 152.67 points or 1.37% to 11,280.60, KOSPI climbed 54.04 points or 2.59% to 2,141.23, Jakarta Composite gained 48.66 points or 1.00% to 4,896.17 and Shanghai Composite was up by 14.98 points or 0.51% to 2,936.38.
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