Markets trade in fine-fettle in early deals; Nifty reclaims 10,300 mark

Indian equity benchmarks made optimistic start on Monday following firm global cues coupled with gradual re-opening of the economy. Hotels, restaurants, malls, and places of worship are re-opening from June 08 after 75 days of lockdown. Markets are trading firm with notable gains of over one and half percent each in early deals supported by strong buying in all the sector indices except healthcare. Support came 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. Besides, the government of India has effectively suspended fresh bankruptcy proceedings against persons impacted because of COVID-19 for at least six months, up to a maximum of one year. Meanwhile, India has registered over 10,500 new coronavirus cases in a single day, taking its spot as the 5th worst-hit nation across the global.

On the global front, Asian markets are trading higher amid improved risk appetite following the rally on Wall Street Friday after a US 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. Besides, the Cabinet Office said in Monday's final reading that Japan's gross domestic product was bumped down to 2.2 percent on year in the first quarter of 2020, placing the country firmly in recession.

Back home, banking stocks were buzzing with the Reserve Bank of India’s (RBI’s) data showing that bank credit and deposits grew 6.25% and 10.64% YoY to Rs 102.23 lakh crore and Rs 138.30 lakh crore, respectively, in the fortnight ended May 22. In scrip specific developments, state-owned oil firms BPCL, HPCL and IOC climbed after hiking petrol and diesel prices by 60 paisa per litre. On the other hand, Karnataka Bank tumbled as it reported a 56 percent decline in its March quarter net profit.

The BSE Sensex is currently trading at 34892.45, up by 605.21 points or 1.77% after trading in a range of 34775.60 and 34927.80. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.22%, while Small cap index was up by 1.86%.

The top gaining sectoral indices on the BSE were Bankex up by 3.17%, Consumer Durables up by 2.98%, PSU up by 2.93%, Realty up by 2.73%, Capital Goods up by 2.40%, while Healthcare down by 0.61% was the sole losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 7.48%, Titan Co up by 5.45%, Axis Bank up by 5.07%, Bajaj Finance up by 4.80% and ICICI Bank up by 4.53%. On the flip side, Sun Pharma down by 0.80% and Nestle down by 0.34% were the only losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has said that India’s gross direct tax collection in  financial year 2020 (FY20) dipped 4.92 per cent to Rs 12.33 lakh crore on account of reduction in corporate tax rate, increased standard deduction and personal I-T exemption limit. The CBDT said the fall in tax collection is on expected line and temporary in nature. The gross direct tax collection in FY19 fiscal stood at Rs 12,97,674 crore.

The government had lowered the net direct tax collection target for FY20 to Rs 11.70 lakh crore in the Revised Estimates, from Rs 13.3 lakh crore projected in Budget presented in July 2019. Although CBDT has not made public the actual net direct tax collection in FY20, adjusting the gross collection (Rs 12.33 lakh crore) with refunds (Rs 1.84 lakh crore) show net collection of around Rs 10.49 lakh crore during the fiscal. Net collection is gross collection minus income tax refunds.

The actual gross corporate tax and Personal Income Tax (PIT) revenue mop up stood at Rs 6.78 lakh crore and Rs 5.55 lakh crore, respectively, in FY20, taking the actual gross direct tax collection to Rs 12,33,720. In FY20, refunds worth Rs 1.84 lakh crore were given by CBDT, a 14 per cent increase over Rs 1.61 lakh crore given in FY19. However, gross collection would have clocked a 8 per cent growth to Rs 14.01 lakh crore in FY20 if revenue foregone in corporate tax and PIT is taken into account.

The CNX Nifty is currently trading at 10316.75, up by 174.60 points or 1.72% after trading in a range of 10288.45 and 10328.50. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 7.64%, Titan Co up by 5.28%, Axis Bank up by 5.16%, IOC up by 5.09% and Bajaj Finance up by 5.01%. On the flip side, Bharti Infratel down by 1.74%, Cipla down by 1.49%, Dr. Reddy’s Lab down by 1.34%, Sun Pharma down by 0.99% and Britannia Industries down by 0.80% were the top losers.

All the Asian markets are trading higher; Nikkei 225 surged 250.51 points or 1.10% to 23,114.24, Straits Times jumped 33.39 points or 1.21% to 2,784.89, Hang Seng rose 42.17 points or 0.17% to 24,812.58, Taiwan Weighted soared 136.60 points or 1.19% to 11,616.00, KOSPI gained 0.11 points or 0.01% to 2,181.98, Jakarta Composite climbed 118.80 points or 2.40% to 5,066.58 and Shanghai Composite was up by 8.33 points or 0.28% to 2,939.13.