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Bulls hold grip over Indian markets
Jun-03-2020
Bulls were holding their tight grip over Indian markets, on account of positive cues from other Asian markets. Gaining momentum remained intact as heavy buying continues over Banking and Oil & Gas counters. The broader indices were too showing fabulous performance in early noon deals, while Bajaj Finance gained the most among all major industry leaders on the BSE. Traders remained positive, even after business activity across India's service sector fell drastically during May as the unfavourable economic effects of the coronavirus disease 2019 (COVID-19) pandemic impaired business operations, restricted consumer footfall and led demand to collapse. While most measures came off the unprecedented lows seen in April, survey data still pointed to extreme month-to-month declines in output and new orders.

On the global front, Asian markets were trading in green, as China's service sector expanded for the first time in four months in May amid an easing of measures implemented to curb the spread of coronavirus, or Covid-19. The survey results from IHS Markit showed that the services Purchasing Managers' Index advanced to 55.0 in May from 44.4 in April. A score above 50 indicates expansion.

The BSE Sensex is currently trading at 34218.71, up by 393.18 points or 1.16% after trading in a range of 34112.71 and 34422.71. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.30%, while Small cap index was up by 2.08%.

The top gaining sectoral indices on the BSE were Bankex up by 2.88%, Oil & Gas up by 2.20%, Industrials up by 1.99%, PSU up by 1.90% and Realty up by 1.82%, while IT down by 0.39%, TECK down by 0.33% and Telecom down by 0.20% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.77%, ICICI Bank up by 4.05%, SBI up by 4.02%, Axis Bank up by 3.40% and ONGC up by 3.38%. On the flip side, NTPC down by 0.88%, TCS down by 0.80%, Infosys down by 0.64%, Bharti Airtel down by 0.43% and Power Grid down by 0.09% were the top losers.

Meanwhile, domestic ratings agency Crisil has said it expects fast moving consumer goods sector (FMCG) companies’ revenue to contract by 3% in 2020-21 as against its earlier expectation of a 10% growth. However, it said companies will adopt lower advertising spends and benefit from lower input prices, which will ensure that operating profit levels can be broadly maintained at up to 19%. It attributed the drastic revision in revenue growth to both supply and demand shocks caused by the COVID-19 pandemic, which has resulted in a three month lockdown in major consumption hubs.

The agency said lockdowns have resulted in limited mobility and supply-chain disruptions, while the expectations of lower income for consumers have derailed sales. It also said from an operating profit growth perspective, the number will drop marginally to 18-19% in FY21 as against 20% in FY20, and added that other strengths like well capitalized balance sheets and limited need to add capacity will ensure that the credit profiles of the companies remain stable. It said the assessment is based on 57 companies it rates, which account for half of the industry's revenues, and assumes a staggered relaxation in lockdowns from June 2020, and a gradual recovery in sales after that.

Crisil said ice cream and beverages would see a steeper fall because of revenue loss for the major part of summer. The personal care segment (25% of sector's revenue), which has the highest proportion of discretionary products, will witness the steepest decline, while the home care segment (20% of sector's revenue) will be the least-affected because of its high essentials quotient and rising hygiene awareness. From a geographical perspective, it said rural India should fare better than urban areas because of higher proportion of essential products consumed, government doles, eased restrictions on agriculture activities, and likelihood of a normal monsoon.

The CNX Nifty is currently trading at 10104.65, up by 125.55 points or 1.26% after trading in a range of 10067.45 and 10159.35. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Britannia up by 5.00%, Bajaj Finance up by 4.90%, Bajaj Finserv up by 4.43%, ICICI Bank up by 4.08% and SBI up by 3.99%. On the flip side, Bharti Infratel down by 2.17%, Wipro down by 1.55%, NTPC down by 0.98%, TCS down by 0.94% and Infosys down by 0.66% were the top losers.

All Asian markets were 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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