Benchmarks trade in fine fettle with gains of over 4%

Indian equity benchmarks made gap-up opening on Tuesday following firm cues from global markets on hopes of pandemic stabilizing coupled with fall in crude oil prices overnight. Markets are trading in fine fettle in early deals with gains of over 4% each. Gains in bankex, telecom and TECK stocks are supporting the markets. Traders took encouragement with report that the Finance Ministry is working on a second relief package for the Indian economy hit hard by the coronavirus outbreak and the 21-day nationwide lockdown imposed to curb the contagion. Some support also came in as to ensure adequate liquidity in the system, especially in the corporate bond market, the Reserve Bank of India (RBI) announced the third targeted long-term repo operation (TLTRO) on April 7 for Rs 25,000 crore. Meanwhile, the number of confirmed coronavirus (Covid-19) cases reached 4,281-mark on Monday. The death toll has increased to 111, while 318 patients have been discharged or recovered from the highly contagious disease.

On the global front, most of the Asian markets are trading higher amid indications that coronavirus pandemic may be levelling off in New York and receding in European coronavirus hotspots such as Italy and Spain. Sentiments got a boost after reports indicated that the Japanese Cabinet is set to approve a coronavirus stimulus package totaling 108 trillion yen, or equal to 20 percent of Japan's GDP. Meanwhile, the average of household spending in Japan was down 0.3 percent on year in February, the Ministry of Internal Affairs and Communications said on Tuesday - coming in at 271,735 yen.

Back home, India’s services sector growth contracted in March after registering the strongest rise in business activity for over seven years in February, as the covid-19 outbreak dented client demand, particularly in overseas markets. Services Purchasing Managers’ Index (PMI) fell to 49.3 from 57.5 in February. In stock specific development, Godrej Consumers Products surged on plans to introduce new products in the sanitizer category following a shift in consumer habits and preferences impacted by the coronavirus pandemic.

The BSE Sensex is currently trading at 28896.29, up by 1305.34 points or 4.73% after trading in a range of 28602.31 and 28963.25. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 2.97%, while Small cap index was up by 2.82%.

The gaining sectoral indices on the BSE were Bankex up by 6.54%, Telecom up by 5.93%, TECK up by 5.44%, IT up by 5.34%, Auto up by 5.20%, while there was no losers on the BSE sectoral front.

The top gainers on the Sensex were Indusind Bank up by 19.60%, Mahindra & Mahindra up by 12.80%, Axis Bank up by 10.00%, ICICI Bank up by 7.50% and Sun Pharma up by 7.48%. On the flip side, Bajaj Finance down by 3.55% was the sole loser.

Meanwhile, Fitch Ratings has cut India's growth forecast to a 30-year low of 2 percent, from 5.1 percent projected earlier for the current financial year (FY21), as economic recession gripped global economy following the lockdown due to COVID-19 pandemic. It also said micro, small and medium-sized enterprises and the services segment are likely to be among the most affected amid reduced consumer spending.

It further stated that NBFCs' business borrowers are typically smaller with more limited cash buffers, and any material fall in earnings is likely to affect their ability to repay their loans directly. The challenges for India's non-bank financial institutions (NBFI) will intensify as local measures to contain the spread of the coronavirus exert pressure on their operating performance and financial profiles.

Government-imposed activity restrictions in India will raise operational complications for the NBFIs, while any escalation in local infections would deal a blow to economic sentiment. It said ‘these developments threaten to derail the incipient recovery in India's credit environment following the NBFI crisis in 2018-2019, and Fitch has taken negative action on our rated Indian NBFI portfolio in light of these risks.’

The CNX Nifty is currently trading at 8446.05, up by 362.25 points or 4.48% after trading in a range of 8360.95 and 8468.25. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 19.68%, Mahindra & Mahindra up by 12.93%, Axis Bank up by 9.99%, Sun Pharma up by 7.55% and ICICI Bank up by 7.36%. On the flip side, Bajaj Finance down by 3.52% and Bajaj Finserv down by 1.96% were the few losers.

Asian markets are trading mostly in green; Nikkei 225 rose 74.70 points or 0.40% to 18,651.00, Straits Times soared 34.83 points or 1.41% to 2,505.42, Hang Seng inched up 66.37 points or 0.28% to 23,815.49, Taiwan weighted jumped 136.62 points or 1.39% to 9,955.36, KOSPI advanced 8.70 points or 0.49% to 1,800.58 and Shanghai Composite surged 48.15 points or 1.74% to 2,812.14, while Jakarta Composite was down by 63.26 points or 1.31% to 4,748.57.