Markets end on higher note

Snapping two-day losing streak, Indian equity benchmarks ended Wednesday’s session on higher note with gains of over two percent, led by gains in banking and financial sectors. Domestic bourses opened with massive gap-up, as Prime Minister (PM) has announced a stimulus package totalling Rs 20 lakh crore, with an aim to rescue the Indian economy reeling under the impact of coronavirus. This amounts to nearly 10 percent of India's Gross Domestic Product (GDP). PM said that economic package is for all classes of society, for all Indians and industry. The markets, nevertheless, gave up greater than half of these positive aspects within the first hour of trade, amid heavy sell off in global markets. Some concern also came as India's industrial output, measured in Index of Industrial Production (IIP), contracted by 16.7% in March 2020 mainly on account of poor show by mining, manufacturing and electricity sector due to the nationwide lockdown. The IIP had grown by 2.7% in March 2019. The IIP in the last fiscal contracted by 0.7% from 3.8% expansion in the 2018-19.

But, domestic bourses still traded steady in the afternoon session, with gains of over 2 percent each, as sentiments remained up-beat with the World Economic Forum (WEF) stating that India has moved up two positions to rank 74th on a global ‘Energy Transition Index’ with improvements on all key parameters of economic growth, energy security and environmental sustainability. Markets held on to gains in late trade, as the New Development Bank of the BRICS countries has fully disbursed $1 billion emergency assistance loan to India to help it contain the spread of COVID-19 and reduce human, social and economic losses caused by the coronavirus pandemic.

On the global front, Asian markets ended mixed on Wednesday, while European markets were trading in red, as investors feared that a resurgence in Covid-19 cases would quash hopes of a swift recovery in the global economy, while rising US-China tensions also dented sentiment. Back home, auto component industry stocks ended higher despite Ind-Ra’s report that auto component industry is likely to witness a second consecutive year of a double-digit de-growth this fiscal mainly on account of disruption in operations due to coronavirus pandemic and the subsequent lockdown. 

Finally, the BSE Sensex gained 637.49 points or 2.03% to 32,008.61, while the CNX Nifty was up by 187.00 points or 2.03% to 9,383.55.

The BSE Sensex touched high and low of 32,845.48 and 31,901.92, respectively and there were 26 stocks advancing against 4 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.49%, while Small cap index was up by 1.97%.

The top gaining sectoral indices on the BSE were Capital Goods up by 5.08%, Industrials up by 3.98%, Bankex up by 3.88%, Realty up by 3.57%, Finance up by 3.32%, while Healthcare down by 0.82%, FMCG down by 0.61% and Telecom down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 7.02%, Ultratech Cement up by 6.15%, Larsen & Toubro up by 5.98%, ICICI Bank up by 5.04% and SBI up by 4.44%. On the flip side, Nestle down by 5.38%, Sun Pharma down by 2.47%, Hindustan Unilever down by 0.80% and Bharti Airtel down by 0.70% were the top losers.

Meanwhile, praising the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi, the Society of Indian Automobile Manufacturers (SIAM) has said that the stimulus package will provide boost to demand and growth of India's economy once again. The industry body also hoped that a focused package to support the Indian automotive industry would be announced by Finance Minister Nirmala Sitharaman, when she announces the details of the package.

Drawing attention to the Indian automotive industry, SIAM President Rajan Wadhera said the sector is a strong pillar of Make in India with huge contributions to GDP (gross domestic product) and employment and relies on its highly indiginised supply chain.

Meanwhile, with the auto sector suffering one of the longest slowdowns in the past one year followed by the impact of the coronavirus pandemic, SIAM has been seeking government support to help the industry. It has called for reduction in goods and services tax (GST) on automobiles and bringing the scrappage policy among others to help spur demand.

The CNX Nifty traded in a range of 9,584.50 and 9,351.10 and there were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 7.71%, Axis Bank up by 7.01%, Ultratech Cement up by 6.41%, Larsen & Toubro up by 6.28% and Adani Ports &SEZ up by 5.99%. On the flip side, Nestle down by 5.22%, Sun Pharma down by 2.16%, Bharti Airtel down by 1.04%, Britannia Industries down by 0.78% and TCS down by 0.26% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 70.19 points or 1.17% to 5,924.58, France’s CAC fell 78.94 points or 1.77% to 4,393.56 and Germany’s DAX was down by 160.78 points or 1.49% to 10,658.72.

Asian markets ended mixed on Wednesday, tracking overnight losses on Wall Street as rising concerns about a second wave of corona virus infections around the world prompted investors to book some profits, while leading US infectious disease expert Dr. Anthony Fauci warned of additional death and other serious consequences if the US re-opens the country too soon, added some pressure on market sentiment. Japanese shares ended lower as simmering US-China tensions after a leading US Republican senator proposed legislation that would authorize President Donald Trump to impose sanctions on China if it fails to give a full account of events leading to the corona virus outbreak. Chinese shares ended higher as the epicentre of the deadly virus Wuhan city, which announced plans to test its entire population of 11 million people within a 10-day timeframe, has confirmed no new corona virus infection on Tuesday.