Key gauges inch higher in morning session

Indian equity benchmarks inched higher in morning session, following sustained buying in Power, Telecom, Energy and Realty sectors, despite weakness in Asian equities. Traders were taking support with Federation of Indian Export Organisations (FIEO) President S K Saraf’s statement that the ongoing India-China border tensions may not have any immediate impact on the bilateral trade relations. Some support also came with rating agency Crisil’s report stated that the liquidity cover for non-banking financial companies (NBFCs) has not been affected much in April and May, as they managed partial collections and on lack of fresh disbursements. However, there was some cautiousness too as border tensions between India and China continued to simmer while COVID-19 infections surged. On the sectoral front, stocks related to Tyre sector remained in focus as Automotive Tyre Manufacturers Association (ATMA) said restrictions on import of tyres will pave the way for increased domestic production while accelerating exports besides unlocking job creation potential. 

On the global front, Asian markets are trading mostly in red after a choppy Wall Street session as spiking coronavirus cases and prospects of new lockdowns erased earlier confidence about a global economic recovery. Back home, the BSE Sensex is currently trading at 33585.74, up by 77.82 points or 0.23% after trading in a range of 33371.52 and 33585.99. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.75%, while Small cap index was up by 1.22%.

The top gaining sectoral indices on the BSE were Power up by 1.13%, Telecom up by 0.93%, Industrials up by 0.82%, Energy up by 0.66% and Realty up by 0.58%, while Oil & Gas down by 0.13% and Bankex down by 0.12% were the only losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.34%, Power Grid up by 1.66%, Bajaj Finance up by 1.12%, Tata Steel up by 1.01% and Infosys up by 0.90%. On the flip side, ONGC down by 2.31%, NTPC down by 0.98%, TCS down by 0.88%, HCL Technologies down by 0.70% and Larsen & Toubro down by 0.68% were the top losers.

Meanwhile, Federation of Indian Export Organisations (FIEO) President S K Saraf has said that the ongoing India-China border tensions may not have any immediate impact on the bilateral trade relations. He added that there are huge trade opportunities for businesses of both the countries to explore in each others' market. Further, Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel also hinted that trade may take a hit if both the countries would not be able to resolve the issues soon.

Sakthivel said ‘if the situation get worsened then there will be a problem. We do not export apparel in huge numbers but we import lot of fabrics from China’. Meanwhile, Ludhiana-based Hand Tools Association President Subhash Chander Ralhan said that China is a big market for Indian exporters and there is a need to look at ways to boost exports to the neighbouring country to bridge the widening trade deficit.

He mentioned putting any kind of restrictions on imports from China may impact India’s exports. But if the tensions at the borders would get aggravated then it may impact the bilateral trade relations. India's exports to China stood at $15.54 billion during April-February 2019-20, while imports aggregated at $62.38 billion during the same period. Exports and imports in 2018-19 were $16.75 billion and $70.32 billion respectively.

The CNX Nifty is currently trading at 9910.65, up by 29.50 points or 0.30% after trading in a range of 9845.05 and 9910.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.18%, Bharti Infratel up by 2.35%, ITC up by 2.32%, UPL up by 1.97% and Bajaj Finserv up by 1.97%. On the flip side, ONGC down by 2.32%, Adani Ports & SEZ down by 1.51%, TCS down by 0.94%, JSW Steel down by 0.89% and NTPC down by 0.87% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 82.14 points or 0.37% to 22,373.62, Hang Seng decreased 53.87 points or 0.22% to 24,427.54, Taiwan Weighted dropped 10.06 points or 0.09% to 11,524.53, Jakarta Composite lost 6.28 points or 0.13% to 4,981.50, KOSPI fell 4.14 points or 0.19% to 2,136.91 and Straits Times trembled 3.44 points or 0.13% to 2,666.18.

On the flip side, Shanghai Composite gained 1.01 points or 0.03% to 2,936.88.