Markets trade firm after gap-up opening; IIP data eyed

Indian equity benchmarks made gap-up opening following firm global cues and on hopes of stimulus measures from the government. Investors are looking ahead to the Index of Industrial Production (IIP) data to be out later in the day. Markets are trading firm with gains on around 3% each in early deals, supported by heavy buying in Healthcare, Metal and Telecom stocks. Traders took  encouragement with a private report stating that a second stimulus package India is poised to announce in coming days will be worth around Rs 1 lakh crore ($13 billion) and focus on help for small and medium businesses weathering the coronavirus outbreak. Some support also came in as the Ministry of Corporate Affairs issued a slew of measures to facilitate the functioning of companies as they grapple with the ongoing nationwide lockdown due to the coronavirus pandemic. Meanwhile, the number of coronavirus cases in the country reached 5,916, with 178 deaths. Besides, the United Nations’ International Labour Organization (ILO) in its latest report stated that about 400 million people working in the informal economy in India are at risk of falling deeper into poverty due to the coronavirus crisis which is having catastrophic consequences, and is expected to wipe out 195 million full-time jobs or 6.7% of working hours globally in the second quarter of this year.

Global cues remained supportive with most of the Asian markets trading higher following the overnight rally on Wall Street amid optimism that coronavirus infections around the world are nearing a peak and on expectations of more stimulus measures by governments. Investors look ahead to the release of the US weekly jobless claims report later in the day, with the report expected to shed more light on the coronavirus pandemic's impact on the US economy.

Back home, India Inc has sought an economic package from the Centre to tide over the impact of the coronavirus outbreak and support small and medium businesses to keep their enterprises afloat while catering to the needs of the poor and informal sector workers. In stock specific development, Cipla gained over 13% on getting the final approval from USFDA for asthma medication Albuterol Sulfate Inhalation Aerosol 90mcg actuation.

The BSE Sensex is currently trading at 30703.16, up by 809.20 points or 2.71% after trading in a range of 30459.76 and 30847.10. 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 2.96%, while Small cap index was up by 2.75%.

The gaining sectoral indices on the BSE were Healthcare up by 4.82%, Metal up by 4.41%, Telecom up by 4.37%, Auto up by 4.01%, Bankex up by 3.68%, while there was no losers on BSE sectoral front.

The top gainers on the Sensex were HDFC up by 5.04%, Tata Steel up by 5.02%, Maruti Suzuki up by 4.98%, Bharti Airtel up by 4.85% and Kotak Mahindra Bank up by 4.66%. On the flip side, Hindustan Unilever down by 2.31% was the sole loser.

Meanwhile, in order to meet the expenses in dealing with COVID-19 pandemic, the Finance Ministry has allowed all states to borrow a cumulative Rs 3.20 lakh crore from market between April-December. The move comes amid states demand for higher funds from the Centre.  In a letter to the RBI, the ministry said that the Centre has decided to permit states to raise open market borrowing on the basis of 50 percent the Net Borrowing Ceiling fixed for the year 2020-21 for financing the states' annual plan for the fiscal.

The letter said RBI is requested to make necessary arrangement in consultation with state government to raise the open market borrowing. It also said that further consent for raising open market borrowing during April-December will be processed after receiving complete information from states.

As per the letter, 28 states have been allowed to borrow a cumulative Rs 3,20,481 crore from markets on an ad-hoc basis for the first nine months of the current fiscal. Accordingly, West Bengal can borrow Rs 20,362 crore, Maharashtra (Rs 46,182 crore), Uttar Pradesh (Rs 29,108 crore), Karnataka (Rs 27,054 crore), Gujarat (Rs 26,112 crore) and Rajasthan (Rs 16,387 crore).

The CNX Nifty is currently trading at 9005.70, up by 256.95 points or 2.94% after trading in a range of 8917.45 and 9032.55. There were 49 stocks advancing against 1 stock declining on the index.

The top gainers on Nifty were Cipla up by 13.41%, Tata Motors up by 8.14%, JSW Steel up by 7.70%, Vedanta up by 7.25% and Maruti Suzuki up by 5.53%. On the flip side, Hindustan Unilever down by 1.58% was the sole loser.

Asian markets are trading mostly in green; Straits Times surged 39.85 points or 1.57% to 2,579.29, Hang Seng gained 191.96 points or 0.80% to 24,162.33, KOSPI jumped 23.88 points or 1.32% to 1,831.02 and Shanghai Composite rose 7.90 points or 0.28% to 2,823.27. On the other hand, Nikkei 225 fell 56.02 points or 0.29% to 19,297.22, Taiwan weighted declined 26.38 points or 0.26% to 10,111.09 and Jakarta Composite was down by 27.25 points or 0.59% to 4,599.45.