Markets pare most gains; end marginally higher

Indian equity benchmarks surrendered most of the day's gains but managed to end marginally in green on Monday, following positive cues from Asian peers. Trading for the day began on a higher note, as investors cheered the government's move to open places of worship, malls and restaurants. Traders took encouragement with report that foreign portfolio investors have pumped in a massive Rs 18,589 crore into the Indian markets the first week of June as sentiments improved amid graded lifting of lockdown curbs. Also, the Reserve Bank of India (RBI) said the country's foreign exchange reserves surged $3.43 billion to a fresh all-time high of $493.48 billion for the week ended May 29 on a handsome accretion of the core currency assets. Some support also came as the government has modified public procurement norms to give maximum preference to companies whose goods and services have 50 per cent or more local content, a move aimed at promoting 'Make in India' and making the country self-reliant. The revised Public Procurement (Preference to Make in India), Order 2017, has introduced a concept of Class-I, II and non-local suppliers, based on which they will get preference in government purchases of goods and services.

However, in late afternoon session, key indices gave up most of their gains to come off their intraday high points, as market-men got anxious with Income Tax Department’s statement that the actual gross direct tax collection during 2019-20 fiscal dipped by 4.92% to Rs 12.33 trillion on account on reduction in corporate tax rate, increased standard deduction and personal I-T exemption limit. Some pessimism also came with the private report that the prolonged period of growth slowdown is likely to adversely impact India's external sector which currently is comfortably placed on account of subdued prices of crude oil in the international market.

On the global front, Asian markets ended higher on Monday, amid improved risk appetite following the rally on Wall Street Friday after a U.S. Labor Department report showed an unexpected jump in non-farm payroll employment in the month of May. The data bolstered hopes of a quick economic recovery. While, European markets were trading mostly lower, as German industrial production declined at the fastest rate since the series began in 1991. Industrial output decreased 25.3 percent year-on-year in April, following an 11.3 percent fall in the previous month. This was the biggest fall on record. Back home, Power stocks were in focus with CRISIL Ratings’ report that power distribution utilities' debt will hit an all-time high of Rs 4.5 lakh crore by the end of the ongoing financial year. Coal stocks also in watch with a private report that the country's coal import dropped by 20 percent to 18.93 million tonnes (MT) in May.

Finally, the BSE Sensex gained 83.34 points or 0.24% to 34,370.58, while the CNX Nifty was up by 25.30 points or 0.25% to 10,167.45.

The BSE Sensex touched high and low of 34,927.80 and 34,211.83, 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 0.23%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.79%, PSU up by 2.02%, IT up by 1.69%, TECK up by 1.28%, Industrials up by 1.12% while, Basic Materials down by 0.90%, Healthcare down by 0.89%, Metal down by 0.56%, Consumer Disc down by 0.40%, Auto down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 6.89%, Axis Bank up by 6.18%, Bajaj Finance up by 4.78%, ONGC up by 4.60% and Titan Company up by 2.87%. On the flip side, Mahindra & Mahindra down by 2.73%, Ultratech Cement down by 2.36%, HDFC Bank down by 1.87%, Tata Steel down by 1.68% and Nestle down by 1.58% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest data has showed that bank credit rose by 6.25 percent to Rs 102.23 lakh crore, while deposits grew by 10.64 percent to Rs 138.30 lakh crore in the fortnight ended May 22, 2020. In the fortnight ended May 24, 2019, deposits were at Rs 124.99 lakh crore and advances stood at Rs 96.21 lakh crore.

On a fortnightly basis, bank advances de-grew by 0.3 percent or Rs 28,683.47 crore to Rs 102.23 lakh crore in the reporting period from Rs 102.51 lakh crore as on fortnight ended May 24, 2020. Deposits' growth remained stable on a fortnight basis. In April, the outstanding incremental non-food credit growth contracted by 1.2 percent to Rs 91 lakh crore from Rs 92.12 lakh crore in March. On a year-on-year basis, non-food credit growth decelerated to 7.3 percent in April 2020 from 11.9 percent in the same month last year.

Loan growth to agriculture and allied activities decelerated to 3.9 percent in April 2020 as compared to 7.9 percent in April 2019. Growth in advances to the services sector decelerated to 11.2 percent, from 16.8 percent in April 2019. Personal loans growth decelerated to 12.1 percent in April 2020, compared with 15.7 percent in April 2019.

The CNX Nifty traded in a range of 10,328.50 and 10,120.25 and there were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 7.51%, Indusind Bank up by 7.26%, BPCL up by 7.03%, Axis Bank up by 6.51% and ONGC up by 4.89%. On the flip side, Zee Entertainment down by 4.46%, Shree Cement down by 3.90%, Eicher Motors down by 3.40%, Mahindra & Mahindra down by 2.67% and Bharti Infratel down by 2.43% were the top losers.

European markets were trading mostly lower; France’s CAC decreased 20.31 points or 0.39% to 5,177.48, Germany’s DAX was down by 46.11 points or 0.36% to 12,801.57 and UK’s FTSE 100 increased 13.87 points or 0.21% to 6,498.17.

Asian markets ended higher on Monday, tracking last week’s rally in Wall Street after US government report showed an unexpected jump in employment in the month of May, fuelling optimism about a quick economic recovery. The US economy added 2.5 million jobs last month, pushing the unemployment rate down to 13.3 percent from 14.7 percent in April. Chinese shares ended with modest gains on hopes of further stimulus after the release of weak trade data, with China’s exports in May fell 3.3 percent compared to a year earlier to $206.8 billion and imports dropped 16.7 percent to $143.9 billion. Further, Japanese shares ended up as the safe haven yen weakened against greenback and other major currencies boosted export-oriented stocks. Investors also cheered an upward revision of Japan's gross domestic product in the first quarter, although the economy was still mired deep in recession. Meanwhile, markets in Malaysia were closed for a holiday.