HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Benchmarks trade higher amid positive Asian cues
Aug-11-2020

Indian equity benchmarks made optimistic start on Tuesday ahead of the industrial output data for June scheduled to be out later in the day. Markets are trading higher with gains of over 0.80% each in early deals, supported by buying in Metal, Bankex and Utilities counters. Traders took encouragement with Commerce and Industry Minister Piyush Goyal’s statement that India's balance of payments this year is going to be very, very strong on the back of significant improvement in exports and a fall in imports. Some support also came in as Union Minister Nitin Gadkari said the government is working on the idea of a land bank and a social microfinance institution to help people run small shops and businesses. Though, upside remained limited as some cautiousness prevailed with ratings agency ICRA’s report that the coronavirus pandemic will significantly impact performance of companies and it is likely to be severe and prolonged for select sectors, especially aviation, hospitality and retail. It added the pandemic, followed by extended lockdowns in India both nationally and then localised, has impacted India Inc for the major part of the first quarter of the current financial year.

Global cues also remained supportive with most of the Asian markets were trading higher following the mostly positive cues from Wall Street and amid hopes for more coronavirus-related stimulus in the US Nevertheless, investors also kept an eye on rising tensions between the US and China after Beijing imposed sanctions on eleven US citizens in retaliation for similar measures by the US earlier.

Back home, auto stocks were in focus with data from The Federation of Automobile Dealers Associations (FADA) showing that total auto vehicle registrations dropped by 36.27 per cent to 1,142,633 units from 1,792,879 units, a year ago. In scrip specific development, ICICI Bank gained on launching its qualified institutional placement (QIP). The bank plans to raise up to Rs 15,000 crore to support business growth. On the other hand, Titan Company fell after it posted a net loss of Rs 270 crore in Q1FY21 as against a profit of Rs 371 crore in the year-ago period.

The BSE Sensex is currently trading at 38496.76, up by 314.68 points or 0.82% after trading in a range of 38350.98 and 38550.74. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.52%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Metal up by 2.80%, Bankex up by 1.29%, Utilities up by 1.15%, PSU up by 1.04%, Basic Materials up by 0.98%, while Consumer Durables down by 1.15%, Telecom down by 0.23%, Healthcare down by 0.19% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.06%, Axis Bank up by 2.61%, ICICI Bank up by 2.59%, HDFC up by 1.96% and ITC up by 1.63%. On the flip side, Titan Company down by 3.12%, Sun Pharma down by 0.49% and Bharti Airtel down by 0.05% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that the financial performance of corporate sector will be significantly impacted due to extended lockdowns after the outbreak of the coronavirus (Covid-19). It said the impact is likely to be severe and prolonged for select sectors, especially aviation, hospitality, retail and allied businesses. It noted that the pandemic, followed by extended lockdowns in India both nationally and then localised, has impacted India Inc for the major part of the first quarter of the current financial year.

According to the report, the economic activity started to recover from the troughs experienced in April when the lockdown was at its severest and many sectors seem to be adjusting to a new normal. However, it said the unabated rise in COVID-19 cases in the unlock phase and localised re-imposition of lockdowns in several states have interrupted this recovery in recent weeks. It also said the financial performance of corporate sector would be significantly impacted, as manufacturing, construction, industrial and consumption activities have taken a sharp hit.

The report further said overall, Q1 FY2021 will be a washout for India Inc, with significant pressure on revenues and earnings, considering that the major part of the quarter was under lockdown or gradual ramp-up phase. It noted that with continuing fixed overheads and virtually no revenues, the earnings and margin profile of the corporate India are expected to have deteriorated quite sharply during the quarter, despite some recovery towards the end. Furthermore, it said with gradual recovery expectations during the rest of the fiscal, and the current subdued macro-economic environment, pressure on earnings and credit profiles are expected to continue over FY2021. 

The CNX Nifty is currently trading at 11365.10, up by 94.95 points or 0.84% after trading in a range of 11320.05 and 11373.60. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.70%, Tata Steel up by 3.27%, JSW Steel up by 3.22%, Zee Entertainment up by 3.14% and ICICI Bank up by 2.50%. On the flip side, Shree Cement down by 4.38%, Titan Company down by 2.95%, UPL down by 1.24%, Cipla down by 0.96% and Dr. Reddy’s Lab down by 0.69% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 396.65 points or 1.78% to 22,726.59, Straits Times rose 3.12 points or 0.12% to 2,548.63, Hang Seng jumped 581.06 points or 2.38% to 24,958.49, KOSPI soared 36.70 points or 1.54% to 2,423.08, Jakarta Composite added 28.75 points or 0.56% to 5,186.58 and Shanghai Composite was up by 11.12 points or 0.33% to 3,390.37, while Taiwan Weighted dropped 32.28 points or 0.25% to 12,861.72.
  RELATED NEWS >>
Most Viewed >>
April 06 , 2024
RBI to allow UPI payments from PPI wallets via
April 06 , 2024
World markets today: US stocks surge on robust
April 06 , 2024
Cardless cash deposits via UPI apps: Everythin
April 18 , 2024
Bitcoin falls 8% in five days; here are 4 reas
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.