D-Street closes higher for second straight day

Indian equity benchmarks continued their winning run for the second straight day and ended with gains of over a percent on Thursday, on the back of positive global cues. Sensex and Nifty settled above their crucial 31,850 and 9,300 levels, respectively. Key indices opened in green and stayed in the positive terrain for whole trading session, as traders took encouragement with Principal Economic Adviser Sanjeev Sanyal’s statement that more calibrated monetary and fiscal stimulus measures are on the anvil to deal with the economic fallout from COVID-19 and the consequent lockdown. He expressed hope that a significant part of the economy will be functioning, if not everything, by May 3.

However, key indices trimmed some of their gains in late afternoon session as Fitch Ratings slashed India's economic growth projections to 0.8 per cent in the current 2020-21 fiscal saying an unparalleled global recession was underway due to disruptions caused by the outbreak of coronavirus pandemic and resultant lockdowns. But, markets regained its upward momentum to end near day’s high, as traders found support with the Centre slashing the subsidy on non-urea fertilisers, a move that would reduce the burden on the exchequer to Rs 22,186.55 crore in this fiscal amid the COVID-19 outbreak. Investors were also eyeing the two-day (April 23-24) meeting of the economic advisory council which is expected to deliberate on the impact of the Covid-19 pandemic on economic growth in this fiscal year and the next.

On the global front, Asian markets ended mostly in green on Thursday, following a rally on Wall Street and even oil prices recovering from their recent plunge to zero. European markets were trading mostly in green, despite the country's April composite PMI dropped to 11.2 from 28.9 in March, marking the lowest reading since the benchmark began in 1998. Investors also awaited the outcome of a European Union video summit later in the day, with the bloc's leaders expected to agree on a shared fiscal response to a recession looming as a result of the coronavirus pandemic. Back home, agriculture related stocks were in focus as the Centre set the wheat procurement target at 40.7 million tonnes for the 2020-21 marketing year (April-March) as the country is expected to harvest a record 106.21 million tonnes of the grain this year. Stocks related to logistics sector were also buzzing with Rating agency ICRA’s report that the Indian logistics sector is likely to witness a 6-8 percent fall in the current financial year (FY21) on account of rapid outbreak of the coronavirus (COVID-19) disease.

Finally, the BSE Sensex gained 483.53 points or 1.54% to 31,863.08, while the CNX Nifty was up by 126.60 points or 1.38% to 9,313.90.

The BSE Sensex touched high and low of 31,959.02 and 31,292.92, respectively and there were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.90%, while Small cap index was up by 1.35%.

The top gaining sectoral indices on the BSE were IT up by 4.85%, TECK up by 3.93%, Bankex up by 3.39%, Finance up by 2.31%, Metal up by 1.00% and Auto up by 0.75%, while Consumer Durables down by 1.43%, FMCG down by 1.31%, Power down by 1.22%, Power down by 1.22%, Utilities down by 1.20%, Telecom down by 0.69% were the losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 8.59%, TCS up by 5.97%, Infosys up by 5.67%, ICICI Bank up by 4.97% and HCL Technologies up by 3.61%. On the flip side, Titan Company down by 4.18%, Hindustan Unilever down by 2.97%, Power Grid down by 2.59%, NTPC down by 2.41% and Larsen & Toubro down by 1.41% were the top losers.

Meanwhile, the World Bank in a report on impact of COVID-19 on migration and remittances has said that remittances to India are likely to drop by 23 percent from $83 billion 2019 to $64 billion 2020, as a result of the deadly coronavirus pandemic, which has resulted in a global recession. It further said that globally remittances are projected to decline sharply by about 20 percent this year due to the economic crisis induced by the COVID-19 pandemic and shutdown.

Remittance flows are expected to fall across all World Bank Group regions, most notably in Europe and Central Asia (27.5 percent), followed by Sub-Saharan Africa (23.1 percent), South Asia (22.1 percent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 percent), and East Asia and the Pacific (13 percent). It said the projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.

World Bank Group President David Malpass said ‘remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.’ He added ‘remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities' access to these most basic needs.’

The CNX Nifty traded in a range of 9,343.60 and 9,170.15 and there were 27 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 8.31%, TCS up by 5.52%, Infosys up by 5.16%, ICICI Bank up by 4.42% and HCL Technologies up by 3.81%. On the flip side, Titan Company down by 3.73%, Hindustan Unilever down by 2.73%, Power Grid down by 2.50%, Shree Cement down by 2.44% and NTPC down by 2.31% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 2.32 points or 0.04% to 5,772.95 and France’s CAC increased 19.05 points or 0.43% to 4,430.85, while Germany’s DAX decreased 10.60 points or 0.1% to 10,404.43.

Asian markets ended mostly higher on Thursday. Japanese shares rebounded by tracking gains on Wall Street overnight as oil prices recovered from historic lows and investors eyed another stimulus package from US Congress to limit corona virus fallout. Investors shrugged off a survey showing that the manufacturing sector in Japan continued to contract in April, and at a faster pace. Chinese stocks ended down as the economic uncertainty sparked by the corona virus pandemic kept share prices under pressure, making investors reluctant to chase the previous session’s rebound.