Benchmark add gains in late afternoon session

Key benchmark indices added gains on the streets to show a positive trend in late afternoon session, with frontline gauges recapturing their crucial 9350 (Nifty) and 32000 (Sensex) levels. Support came after Reserve Bank of India (RBI) received Rs 64,746 crore worth of bids or more than six times the amount it proposed to buy government bonds through the special open market operation (OMO). But, traders ignored domestic rating agency Crisil’s statement that nearly halved its GDP forecast for India to 1.8% for 2020-21 while projecting total losses of Rs 10 lakh crore or Rs 7,000 per person due to disastrous lockdowns to control COVID-19 pandemic. Sector wise, real estate sector remained in focus as private report stated that investments in the Indian real estate market increased 27 percent to touch $6 billion in 2019. The investment activity in all the key segments was led mostly by foreign players who contributed to the tune of 65 percent. The total investment made by the domestic players in various real estate projects accounted for 35 percent.

On the global front, European markets were trading higher as traders assessed continued panic about oil storage capacity during the coronavirus crisis, which has prompted another fall-off in crude oil prices. Back home, traders took note of a private report that the central government is considering a proposal to guarantee as much as Rs 3 trillion ($39 billion) of loans to small businesses as part of a plan to restart economy, which is reeling under the impact of a 40-day lockdown.

The BSE Sensex is currently trading at 32040.14, up by 297.06 points or 0.94% after trading in a range of 31661.34 and 32164.65. There were 17 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.34%, while Small cap index was up by 0.69%.

The gaining sectoral indices on the BSE were Bankex up by 2.72%, Oil & Gas up by 1.37%, Basic Materials up by 0.84%, Realty up by 0.73% and Industrials was up by 0.55%, while FMCG down by 1.23%, Healthcare down by 1.22%, Telecom down by 1.10%, Power down by 0.66% and TECK was down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 11.73%, HDFC up by 5.66%, Axis Bank up by 4.59%, Bajaj Finance up by 4.57% and ICICI Bank up by 4.16%. On the flip side, NTPC down by 2.49%, Sun Pharma down by 2.31%, Nestle down by 2.19%, Bajaj Auto down by 2.19% and Asian Paints down by 2.01% were the top losers.

Meanwhile, in the wake of the coronavirus outbreak, credit rating agency, India Ratings and Research (Ind-Ra) has cut India’s gross domestic product (GDP) growth further down to 1.9% for FY21 from its forecast of 3.6% published on March 30, 2020. As per the latest report,  this will be the lowest GDP growth in the last 29 years (FY92: GDP grew 1.1%) and is based on the assumption that the partial lockdown will continue till mid-May 2020.

The rating agency is expecting GDP may come back to the Q4 FY20 level only by Q3 FY21, anticipating resumption of normal economic activities during Q2 FY21 and festive demand during Q3 FY21. However, it said that if the lockdown continues beyond mid May 2020 and a gradual recovery takes root only from end-June 2020, GDP growth may slip further to negative 2.1%, lowest in the last 41 years and only the sixth instance of contraction since FY52.

On the fiscal front, Ind-Ra noted that the dip in tax/non tax revenue due to the lockdown/growth slowdown coupled with the need to provide fiscal stimulus will destabilise the fiscal arithmetic of both union and state governments. Even without any significant fiscal stimulus, Ind-Ra expects the fiscal deficit of the union government to escalate to 4.4% of GDP in FY21 (FY21 Budget Estimate: 3.5% of GDP) and a stimulus package of Rs 4 trillion would push it to 6.0% of GDP.

The CNX Nifty is currently trading at 9354.90, up by 72.60 points or 0.78% after trading in a range of 9260.00 and 9402.55. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 11.40%, HDFC up by 5.69%, Axis Bank up by 4.68%, Bajaj Finance up by 4.48% and ICICI Bank up by 4.15%. On the flip side, NTPC down by 2.65%, Vedanta down by 2.61%, Sun Pharma down by 2.48%, Cipla down by 2.31% and Nestle down by 2.20% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 24.25 points or 0.41% to 5,871.04, France’s CAC increased 23.78 points or 0.53% to 4,529.04 and Germany’s DAX was up by 74.18 points or 0.7% to 10,734.17.