Indian equity benchmarks extended their gains in late morning deals, tracking firm cues from other Asian markets. Sentiments remained positive, amid reports 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. The street overlooked a report that 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.
On the global front, Asian markets were trading in green, after Singapore announced an additional S$5.1 billion (US$3.6 billion) stimulus to save jobs and protect the livelihoods of people amid the spread of coronavirus, or COVID-19, pandemic. With the latest announcement, the government's response to COVID-19 will total S$59.9 billion or around 12 percent of GDP. The budget deficit is estimated to rise to 8.9 percent of GDP this year.
The BSE Sensex is currently trading at 29132.55, up by 1541.60 points or 5.59% after trading in a range of 28602.31 and 29163.87. There were 29 stocks advancing against 1 stock declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 3.55%, while Small cap index was up by 3.01%.
The top gaining sectoral indices on the BSE were Healthcare up by 8.07%, Bankex up by 6.12%, Telecom up by 6.08%, Realty up by 6.07% and Energy up by 6.03%, while there were no losing sectoral indices on the BSE.
The top gainers on the Sensex were Indusind Bank up by 16.04%, Axis Bank up by 11.49%, Hindustan Unilever up by 10.00%, HCL Tech. up by 9.35% and Sun Pharma up by 8.87%. On the flip side, Bajaj Finance down by 4.81% was the lone loser.
Meanwhile, keeping a negative approach, domestic ratings agency Crisil in its latest report has said that cement demand in India is expected to contract by an unprecedented 20-25 percent in the current fiscal year (FY21) if the country is unable to contain the pandemic by May. It also said this would lead to extension of social distancing measures through June, and construction activity beginning only in Q2FY21. However, assuming that lockdown and other social distancing measures will continue till April-end and construction activity may resume in mid-May, it said the fall in demand during the fiscal could be to the extent of 10-15 percent.
The rating agency said that COVID-19 has cast a long shadow over a much-anticipated mild recovery in Indian economy in fiscal 2021. Along with external factors such as weak global demand, supply disruptions, and global financial shocks, the economy is grappling with lockdown, factory shutdowns, reduced discretionary spending, and delayed capex cycle, it said all this is expected to affect construction, and thereby cement demand. On a quarterly basis, it said cement demand would be a washout in the first quarter of this fiscal, given that the lockdown measures across India would hurt construction and demand will pick up only from the second half of this fiscal.
According to report, as government funds are diverted towards health and public welfare, its capex spends on all construction projects, which account for nearly 35-40 percent of cement demand, will be significantly lower during the fiscal. Besides, it said further weakening of the real estate sector will impact the capex spends and in-turn demand for cement. However, it noted that rural housing, Pradhan Mantri Awas Yojana -rural, Pradhan Mantri Gram Sadak Yojana, and spend on key infrastructure projects will be the saving grace for the sector in the second half of the fiscal.
The CNX Nifty is currently trading at 8523.25, up by 439.45 points or 5.44% after trading in a range of 8360.95 and 8539.95. There were 48 stocks advancing against 2 stocks declining on the index.
The top gainers on Nifty were Indusind Bank up by 16.04%, Dr. Reddy’s Lab up by 12.05%, Axis Bank up by 11.51%, Cipla up by 10.86% and Hindustan Unilever up by 10.00%. On the flip side, Bajaj Finance down by 4.79% and Bajaj Finserv down by 3.56% were the only losers.
Asian markets were 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.
