Benchmarks trade firm in early deals

Indian equity benchmarks made optimistic start on Tuesday mirroring firm cues from other global markets as investors cheered positive results of a potential vaccine to treat coronavirus. Markets are trading firm in early deals with gains of around a percent each, supported by buying in all sectoral indices except realty. Some support also came in with Minister for MSMEs and road transport and highways Nitin Gadkari’s statement that the recent steps announced by the government to boost liquidity and credit flows would also bolster the purchasing power of the people via employment creation and help accelerate the wheels of the economy. Traders took note of Expenditure secretary TV Somanathan’s statement that this is a challenging year for the central government due to the serious revenue impact of the coronavirus crisis, but added that the Centre had no plan of carrying out poorly calibrated expenditure cuts. Meanwhile, the Worldometer data showed that the total number of coronavirus cases in India has topped the 100,000 mark. As many as 3,156 people have died from the disease in the country, while a little over 39,000 have recovered.

On the global front, all the Asian markets are trading higher following the overnight rally on Wall Street after biotechnology company Moderna reported ‘positive’ phase one results for a potential coronavirus vaccine, saying that the vaccine produced antibodies in all 45 trial participants. Optimism about an economic recovery as more countries reopen their economies as well as a jump in crude oil prices also lifted stocks.

Back home, power stocks were in focus with global ratings agency Standard & Poor's (S&P) statement that the government's stimulus measures will only provide a temporary lifeline to state-owned power distribution companies as the coronavirus pandemic has increased liquidity pressure for these firms. In scrip specific development, Bharti Airtel rose after reporting increased average revenue per user in the fourth quarter ended March. Apollo Tyres and Bajaj Finance gained ahead of their quarterly earnings results. On the other hand, InterGlobe Aviation and SpiceJet fell despite reports that some airlines have started bookings for flights from June onwards.

The BSE Sensex is currently trading at 30312.68, up by 283.70 points or 0.94% after trading in a range of 30187.77 and 30541.34. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.63%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Telecom up by 3.53%, Oil & Gas up by 1.78%, Auto up by 1.27%, Power up by 1.15%, TECK up by 1.08%, while Realty down by 0.08% was the sole losing index on BSE.

The top gainers on the Sensex were ONGC up by 5.49%, Bharti Airtel up by 4.33%, HDFC up by 2.52%, Power Grid up by 1.75% and Hero MotoCorp up by 1.59%. On the flip side, Indusind Bank down by 3.20%, SBI down by 1.16%, Axis Bank down by 0.46%, Asian Paints down by 0.41% and Bajaj Finance down by 0.26% were the top losers.

Meanwhile, auto industry body -- Industry body Society of Indian Automobile Manufacturers (SIAM) has said that the government's economic stimulus package will not create demand. Finance Minister Nirmala Sitharaman over May 13-17 announced in five tranches details of the Rs 20 lakh crore package. It said while noting that the agriculture focused package may benefit the automobile sector indirectly, the auto sector needed an immediate stimulus to boost demand which has not happened.

It added ‘we could see a de-growth between 22-35 percent in FY21.’ Further, it said that there is a need for direct intervention to stop job losses and create demand. Dealers need financial support and should be included in the MSME definition.

In order to help the economy battling global slowdown and the coronavirus pandemic, Prime Minister Narendra Modi on May 12 had announced that the government would outline an Rs 20 lakh crore package.

The CNX Nifty is currently trading at 8921.15, up by 97.90 points or 1.11% after trading in a range of 8866.80 and 8968.40. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.90%, Bharti Airtel up by 5.06%, JSW Steel up by 3.06%, Hindalco up by 2.86% and Tata Motors up by 2.67%. On the flip side, UPL down by 6.07%, Indusind Bank down by 3.20%, SBI down by 1.09%, Vedanta down by 0.43% and Asian Paints down by 0.24% were the top losers.

All the Asian markets are trading in green; NIKKEI 225 surged 358.59 points or 1.78% to 20,492.32, Straits Times jumped 45.06 points or 1.77% to 2,584.34, Hang Seng soared 436.21 points or 1.82% to 24,370.98, Taiwan Weighted rose 107.23 points or 1.00% to 10,847.78, KOSPI gained 35.51 points or 1.83% 1,972.62, Jakarta Composite added 89.59 points or 1.99% to 4,600.65 and Shanghai Composite was up by 15.14 points or 0.53% to 2,890.56.