HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Markets snap 6-day gaining streak
Jun-04-2020

Snapping 6-day gaining streak, Indian equity benchmarks ended Thursday’s session in red terrain, as investors remained anxious about rising number of coronavirus cases and its impact on the global as well as domestic economy. Markets made slightly positive start, tracking positive global shares. Traders also took some support with Union minister Prakash Javdekar’s statement that the government has formed an empowered group of secretaries to enhance investment in the country to offset the impact of coronavirus. However, key indices failed to hold on to gains and slipped into red terrain, as traders turned wary with Moody's Investors Service stating that the quality of retail and small business loans will deteriorate, which account of 44 per cent of the total loans. Elaborating on the key drivers behind India's sovereign downgrade, it said that the risks to the financial system are rising.

Markets extended their losses in afternoon session, as former chief economic adviser Arvind Subramanian said the FRBM Act will probably have to be revised by the end of the year as India will witness a sharp decline in GDP growth due to the COVID-19 crisis. Subramanian further said while labor reforms were necessary, the way they have been done by some states has undermined basic protections to workers, especially in light of the migrant crisis. However, domestic bourses managed to pare most of losses in final hour of session as the Confederation of Indian Industry (CII) has laid out a 10-point roadmap to revive growth and navigate the challenges of loss of lives and livelihoods posed by the global pandemic COVID-19 that has forced countries across the world to reset their growth paths.

On the global front, Asian markets ended mostly in green on Thursday, kindled by firm investor sentiments in line with the positive cues from Wall Street counting on hopes of a recovery from a coronavirus-driven economic slump. European markets were trading lower, as investors focussed on a European Central Bank meeting where policymakers are expected to provide more aid for the battered euro zone economy. Back home, aviation stocks ended higher despite ratings agency Icra’s statement that air passenger traffic in the country is expected to remain under pressure for the first half (April-September) of the current fiscal, with the full year passenger volume likely to go down by about half despite some recovery in H2 FY21. Agriculture stocks also in watch as agriculture Minister Narendra Singh Tomar said the Centre will continue to fix the minimum support price (MSP) on wheat and rice, while using the Opposition not to create ‘confusion and play politics’ on this issue.

Finally, the BSE Sensex lost 128.84 points or 0.38% to 33,980.70, while the CNX Nifty was down by 32.45 points or 0.32% to 10,029.10.

The BSE Sensex touched high and low of 34,310.14 and 33,711.24, respectively and there were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell by 0.06%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 3.47%, TECK up by 2.28%, IT up by 1.86%, Energy up by 1.81% and Healthcare up by 1.65%, while Bankex down by 2.70%, Finance down by 2.54%, Capital Goods down by 1.73%, Realty down by 1.66%, Consumer Durables down by 1.26%, Consumer Discretionary down by 0.66% were the losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 5.34%, Sun Pharma up by 3.98%, Bharti Airtel up by 3.89%, Power Grid up by 2.89% and HCL Technologies up by 2.79%. On the flip side, Asian Paints down by 4.85%, Bajaj Finance down by 4.13%, HDFC down by 3.95%, Indusind Bank down by 3.81% and Axis Bank down by 3.72% were the top losers.

Meanwhile, with an aim to give historic boost to Rural India, the Union Cabinet has taken several landmark and historic decisions in the meeting, which will go a long way in helping India’s farmers while also transforming the agriculture sector.

The cabinet approved historic amendment to the Essential Commodities Act. This is a visionary step towards transformation of agriculture and raising farmers’ income. With the amendment to Essential Commodities Act, commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from list of essential commodities. This will remove fears of private investors of excessive regulatory interference in their business operations.

Besides, the cabinet approved 'The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020'. The Ordinance will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce. It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.

The cabinet also approved ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’. The ordinance will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation. It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers.

The CNX Nifty traded in a range of 10,123.85 and 9,944.25 and there were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 7.70%, Bharti Airtel up by 5.73%, Zee Entertainment up by 5.52%, Tech Mahindra up by 5.20% and Sun Pharma up by 4.17%. On the flip side, Asian Paints down by 4.64%, Bajaj Finance down by 4.04%, HDFC down by 4.03%, Indusind Bank down by 3.57% and Kotak Mahindra Bank down by 3.54% were the top losers.

European markets were trading lower; UK’s FTSE 100 fell 33.89 points or 0.53% to 6,348.52, France’s CAC was down by 46.56 points or 0.93% to 4,975.82 and Germany’s DAX decreased 115.43 points or 0.92% to 12,371.93.

Asian markets ended mostly higher on Thursday, tracking gains in Wall Street overnight after the ADP's US private-sector jobs report showed fewer job losses than expected in May. Sentiments improved further on hopes for further stimulus and optimism about a global economic recovery from the corona virus pandemic. The European Central Bank's policy decision is due later today, with street expecting that the central bank will boost the pandemic emergency purchase program by 500 billion euros. Japanese shares ended up as the safe-haven yen weakened, lifting exporters' stocks. Though, lingering worries about diplomatic tensions between the United States and China, capped some gains.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,919.25
-4.12
-0.14

Hang Seng

24,366.30
40.68
0.17

Jakarta Composite

4,916.70
-24.31
-0.49

KLSE Composite

1,561.84

23.31

1.52

Nikkei 225

22,695.74
81.98
0.36

Straits Times

2,707.20
6.81
0.25

KOSPI Composite

2,151.18
4.18
0.19

Taiwan Weighted

11,393.23
73.07
0.65



  RELATED NEWS >>