Benchmarks end volatile day in red terrain

Indian equity benchmarks ended highly volatile trade in red terrain with losses of over half percent on Thursday, with Sensex and Nifty closing below their crucial 31,450 and 9,200 levels, respectively. Markets commenced the session with gap-down opening, as traders remain concerned with Chief economic adviser KV Subramanian’s statement that India’s gross domestic product (GDP) will contract in the first quarter, but is likely to grow 2% for the full financial year. But, markets soon tried to cut losses, taking support from Niti Aayog CEO Amitabh Kant’s statement that the government is working on a package of structural reforms across sunrise sectors to convert India into a global manufacturing and exporting hub. Some support also came as markets regulator Sebi gave certain relaxations to companies from compliance with procedural norms pertaining to rights issues opening up to July 31 amid the coronavirus lockdown.

But, key indices failed to hold recovery and resumed selling activity in early noon deals, as anxiety remained among the traders with coronavirus cases in the country crossed 50,000 in a steady rise despite weeks-long lockdown, which has also hampered the economic growth of the country. Traders failed to take any senses of relief from former union minister Suresh Prabhu’s statement that focusing on district level growth in post-COVID period will help creating huge employment opportunities, contain migration from villages and push India's GDP. He said that increasing district level growth by additional 3 per cent will help increase the national GDP. Meanwhile, the government has extended the last date for filing annual GST return for financial year 2018-19 by three months till September 2020.

On the global front, Asian markets ended mostly lower on Thursday, tracked by losses in Wall Street overnight after fresh US labour data showed another spike in joblessness in April 2020. Also, a private survey showed China's services firms wallowed in contraction in April as layoffs hit a record and export orders plunged after signs of improvement in March, dashing hopes of a quick recovery from the coronavirus blow. European markets were trading in green, as a surprise rise in China's exports overshadowed another set of grim results and a warning from Air France-KLM that demand could take 'several years' to recover. Back home, stocks related to footwear sector ended lower as domestic rating agency ICRA in its latest report stated that India’s footwear sector is likely to witness a 10-15 percent decline in revenues in the current financial year (FY21), on the back of closure of retail outlets coupled with weak consumer sentiment due to ongoing Covid-19 nationwide lockdown. Sugar stocks were also in watch with CRISIL Ratings’ statement that the operating profitability of domestic sugar mills is expected to decline by 150-300 basis points (bps) to 7.5-9.5 percent due to reduction in industrial usage of sugar, lower demand for ethanol, and fall in exports following the ongoing crisis of COVID-19 pandemic.

Finally, the BSE Sensex lost 242.37 points or 0.76% to 31,443.38, while the CNX Nifty was down by 71.85 points or 0.78% to 9,199.05.

The BSE Sensex touched high and low of 31,705.25 and 31,362.87, respectively and there were 5 stocks advancing against 25 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.53%, while Small cap index was down by 0.14%.

The lone gaining sectoral index on the BSE was Energy up by 1.82%, while Power down by 2.47%, Utilities down by 2.27%, Consumer Durables down by 2.24%, Telecom down by 2.06%, PSU down by 1.84% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 6.58%, Mahindra & Mahindra up by 3.45%, Reliance Industries up by 3.12%, Axis Bank up by 2.33% and Tech Mahindra up by 1.73%. On the flip side, ONGC down by 4.54%, NTPC down by 4.49%, Kotak Mahindra Bank down by 3.69%, Bharti Airtel down by 3.34% and Titan Company down by 3.16% were the top losers.

Meanwhile, with an aim to convert India into a global manufacturing and exporting hub, Niti Aayog CEO Amitabh Kant has said the government is working on a package of structural reforms across sunrise sectors. He listed healthcare, education, mobility, genomics, AI, 5G network, fintech and manufacturing as high priority areas for rapid and radical structural reforms. 

He further said that manufacturing would be a key focus area for the government in the post-COVID-19 period, as India wants to take advantage of the supply chain disruptions in China. He said the government has contacted about 1,450 companies across the world for manufacturing in India, and adding that facilities need to be created for global manufacturers to invest quickly and move forward.   

He pointed out that the plan includes creating 2-3 autonomous zones without regular labour and land laws and stressed that India also needs to make its ports more efficient.  Besides, to promote manufacturing, he suggested that the states should fix electricity and land rates which would not escalate for the next 25 years. He also suggested that for the next three years, every single tender of the government must be given only to Indian companies. 

The CNX Nifty traded in a range of 9,277.85 and 9,175.90 and there were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 7.15%, Indusind Bank up by 6.58%, Adani Ports &SEZ up by 4.39%, JSW Steel up by 4.04% and Mahindra & Mahindra up by 3.68%. On the flip side, NTPC down by 4.33%, BPCL down by 4.25%, ONGC down by 4.16%, Kotak Mahindra Bank down by 3.69% and GAIL (India) down by 3.59% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 42.63 points or 0.73% to 5,896.39, France’s CAC increased 35.12 points or 0.79% to 4,468.50 and Germany’s DAX increased 108.28 points or 1.02% to 10,714.48.

Asian markets ended mostly lower on Thursday, tracked by losses in Wall Street overnight after fresh US labour data showed another spike in joblessness in April 2020. The ADP jobs report showed that US companies lost 20.2 million jobs in April. The government's April jobs report is due Friday. Chinese shares ended lower, despite data showed China's exports grew unexpectedly by 3.5 percent in US dollar terms for the month of April stoking speculation that China could recover from its corona virus lockdown quicker than first thought and supporting global growth. Though, Japanese shares closed modestly higher as trading resumed after Golden Week holidays. Meanwhile, markets in Singapore, Indonesia and Malaysia were closed in observance of Vesak Day.