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Markets maintain gaining momentum in late afternoon session
Jun-03-2020

Indian equity markets maintained their gaining momentum in the late afternoon session, following gains in Bankex, Realty and Industrials stocks amid positive European markets sentiment. Sentiments remained upbeat 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. Traders overlooked Former finance secretary Subhash Chandra Garg statement that 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. Sector wise, steel sector stocks remained in focused with India Ratings’ (IndRa) statement that as construction activities were impacted due to the extended lockdown, onset of monsoon and mass migration of labourers, operating profit or EBITDA of steel producers is expected to decline by 20-30 percent in the current fiscal due to lower demand and price realisation.

On the global front, European markets were trading higher as strong data from China’s services sector fueled investors’ hopes that the global economy will stage a strong recovery from the coronavirus crisis.

The BSE Sensex is currently trading at 34256.27, up by 430.74 points or 1.27% 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 gained 1.15%, while Small cap index was up by 2.08%.

The top gaining sectoral indices on the BSE were Bankex up by 3.20%, Realty up by 3.06%, Industrials up by 2.13%, Capital Goods up by 2.06% and Oil & Gas was up by 1.94%, while IT down by 0.56%, TECK down by 0.51%, Power down by 0.42% and Telecom was down by 0.30% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.58%, ICICI Bank up by 4.58%, Mahindra & Mahindra up by 4.00%, SBI up by 3.67% and Axis Bank up by 3.26%. On the flip side, NTPC down by 1.91%, Infosys down by 1.07%, TCS down by 0.62%, Bharti Airtel down by 0.54% and Hero MotoCorp down by 0.49% were the top losers.

Meanwhile, India’s service sector saw extreme slide in business activity once again in the month of May, as the unfavourable economic effects of the coronavirus disease 2019 pandemic impaired business operations, restricted consumer footfall and led demand to collapse. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index was at 12.6 in May from 5.4 in April. The latest reading pointed to another substantial decline in the health of the Indian service sector, albeit one that was slightly softer than recorded in April. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - was at 14.8 in May from 7.2 in April.

The report also noted that output sank sharply due to extended business shutdowns and very weak demand conditions, while new business from overseas markets collapsed on an unprecedented scale once again during May. With many businesses remaining shut down during May, the extent to which spare capacity grew slowed markedly as a number of firms reported a build-up in unfinished work due to idle operations. Nevertheless, backlogs of work declined overall.

Further, prices data showed deflationary trends across both input costs and output charges midway through the second quarter. However, while the rate at which output price fell slowed, operating expenses dropped at the fastest rate in the survey history. Besides, aggregate employment fell further during May, although a weaker decline at services companies contrasted with a steeper drop at goods producers.

The CNX Nifty is currently trading at 10129.60, up by 150.50 points or 1.51% after trading in a range of 10067.45 and 10159.35. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 5.53%, Bajaj Finance up by 5.32%, Britannia Inds up by 5.06%, Tata Motors up by 4.77% and Mahindra & Mahindra up by 4.16%. On the flip side, Wipro down by 1.95%, Bharti Infratel down by 1.86%, NTPC down by 1.81%, Infosys down by 0.97% and TCS down by 0.64% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 73.15 points or 1.18% to 6,293.29, France’s CAC increased 82.34 points or 1.69% to 4,941.31 and Germany’s DAX was up by 208.92 points or 1.74% to 12,230.20.

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