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Markets trade firm in early deals tracking Asian peers
Mar-31-2020

Indian equity benchmarks made optimistic start on Tuesday tracking the gains in Asian peers coupled with overnight fall in crude oil prices. Markets are trading firm in early deals with gains of over a percent each. Gains across sectors pushed the markets higher, led by Metal, Energy and Oil & Gas shares. Some support came with report that the government has put off implementation of the uniform stamp duty on transfer of shares, debentures, futures, options, currency and other capital market instruments to July 1, 2020. Also, some encouragement came as in line with the Budget announcement, the Reserve Bank of India (RBI) opened certain specified categories of government securities (g-secs) for non-resident investors as part of an initiative to deepen the bond market. Traders took note of report that the government has budgeted a total of Rs 42,000 crore towards disaster relief in the FY21 budget. From April onwards, these budget lines will be available to states to fight against COVID-19 among other calamities.

Though, concerns over fast spreading coronavirus in India kept investors cautious. India’s cumulative coronavirus infections have reached 1,251, registering the highest single-day increase of 227 cases on March 30, while the death toll rose to 32. Also, Fitch Solutions has slashed its estimate for India’s GDP growth in the fiscal starting April 1 (FY21) to 4.6% due to weaker private consumption and contraction in investment amid coronavirus outbreak, costing economies around the globe.

On the global front, most of the Asian markets are trading higher following the overnight gains on Wall Street and as data from China that showed the country's manufacturing sector moved back into expansion in March. The latest survey from the National Bureau of Statistics said that the manufacturing sector in China moved back into expansion in March, with a manufacturing PMI score of 52.0 - beating forecasts for 45.0. That's up sharply from 35.7 in February, and it moves back above the boom-or-bust line of 50 that separates expansion from contraction. The upbeat economic data from Japan also boosted sentiment.

Back home, banking stocks were in focus as the RBI announced that the scheme of merging ten public sector banks into four bigger lenders is on schedule and will come into force from 1 April despite the country-wide coronavirus lockdown. In stock specific development, Federal Bank gained as its board approved an investment of Rs 148 crore in subsidiary - Fedbank Financial Services (FFSL) through rights issue.

The BSE Sensex is currently trading at 28740.96, up by 300.64 points or 1.06% after trading in a range of 28667.36 and 29316.80. 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 0.78%, while Small cap index was up by 1.10%.

The gaining sectoral indices on the BSE were Metal up by 3.42%, Energy up by 2.29%, Oil & Gas up by 1.95%, PSU up by 1.53%, IT up by 1.52% while, Capital Goods down by 0.26%, Auto down by 0.26% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.58%, HDFC up by 2.46%, Axis Bank up by 2.36%, Reliance Industries up by 2.17% and HCL Technologies up by 2.14%. On the flip side, Indusind Bank down by 14.99%, Bajaj Finance down by 4.40%, Bajaj Auto down by 1.81%, Maruti Suzuki down by 1.78% and Larsen & Toubro down by 1.08% were the top losers.

Meanwhile, domestic credit rating agency India Ratings (Ind-Ra) in its latest report has cut economic growth forecast for India to 3.6 per cent for next financial year (FY21) amid coronavirus-related worries. It has assumed that a full or partial lockdown will continue till end of April and economic activities will be gradually restored only after May. The report comes amid a crippling impact on economic activity due to the three-week lockdown till April 14 which is expected to only aggravate the difficulties around growth that were existing before the pandemic.

Further, it expects India to clock a 2.3 per cent growth for the June quarter, down from its expectation of a 4.7 per cent gross domestic product (GDP) expansion in March quarter. It said the initial and visible impact of the spread of the COVID-19 pandemic on the economy has been the disruption in the production of select manufacturing sectors due to the breakdown of supply chain, near-collapse of the tourism, hospitality and aviation sectors and a rise in the work load of the healthcare sector. It added that Small businesses have begun to witness cash flow disruptions.

Additionally, it warned disruption in harvesting the maturing Rabi or winter crop and inability of agricultural markets to timely procure them could be a blow to the farmers' income and rural demand. However, it said that some of the services sectors such as financial services, information technology and IT-enabled services have greater flexibility in operations and they have quickly readjusted and/or are readjusting their operations by allowing employees to work from home.

The CNX Nifty is currently trading at 8388.55, up by 107.45 points or 1.30% after trading in a range of 8358.00 and 8529.60. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.67%, Vedanta up by 4.06%, JSW Steel up by 3.97%, BPCL up by 3.93% and Wipro up by 3.80%. On the flip side, Indusind Bank down by 15.00%, Bajaj Finance down by 4.27%, Bajaj Finserv down by 2.20%, Bajaj Auto down by 1.77% and Maruti Suzuki down by 1.29% were the top losers.

Asian markets are trading mostly in green; Straits Times jumped 53.55 points or 2.22% to 2,469.79, Hang Seng surged 264.28 points or 1.14% to 23,439.39, Taiwan Weighted increased 104.81 points or 1.09% to 9,734.24, KOSPI rose 30.72 points or 1.79% to 1,747.84, Jakarta Composite advanced 71.23 points or 1.61% to 4,485.73 and Shanghai Composite soared 11.60 points or 0.42% to 2,758.81, while Nikkei 225 was down by 17.11 points or 0.09% to 19,067.86.
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