Benchmarks end higher for second straight session

Extending northward journey for second straight session, Indian equity benchmarks ended Friday’s session with gains of over one and half percent each, propelled by stellar gains in index-heavyweight Reliance Industries amid positive sentiment in global markets and fresh foreign fund inflows. Key indices made positive start and managed to keep heads above water, as traders took some support with Prime Minister Narendra Modi’s statement that economic indicators show that India is ready for a swift bounce back as business activity and demand are back to the level seen before the Covid-19 pandemic. Buying further crept in as United Nations Conference on Trade and Development (UNCTAD) said that India’s economy could prove the most resilient in South Asia and its large market will continue to attract market-seeking investments to the country even as it expects a dramatic fall in global foreign direct investment (FDI).

Domestic indices extended their upside in late afternoon session, taking support from report that opening of the coal sector to private players will generate jobs, reduce dependence on fuel import, stimulate the economy and catalyse the country's path towards a $5-trillion economy. Adding to the optimism, State Bank of India’s (SBI) chairman Rajnish Kumar said that there is enough liquidity available in the system and also interest rates have moderated to a large extent. He further states that both the RBI and the government have taken measures to bring back the economy, derailed by the pandemic, back on track. Traders ignored Asian Development Bank (ADB) in a supplement to its Asian Development Outlook (ADO) has forecasted that the Indian economy is expected to contract by 4% during the current financial year, hit hard by the COVID-19 pandemic. It added that countries in ‘Developing Asia’ will ‘barely grow’ in 2020. However, it also said China is expected to record a positive growth of 1.8% in 2020, sharply down from 6.1% in 2019.

On the global front, Asian markets ended mostly higher on Friday, as optimism about a possible global economic recovery helped investors shrug off a second wave of coronavirus infections. European markets were trading in green, ahead of the European Council's meeting to negotiate the EU recovery fund. Back home, stocks related to textile sector were in focus as India Ratings expects a 'huge fall' in revenue of textile companies in the first half of 2020-21 due to the economic slowdown following lockdown to curb the spread of the COVID-19 pandemic. Sugar stocks were in also in watch with Food Secretary Sudhanshu Pandey’s statement that the government is considering a proposal to increase the minimum selling price (MSP) of sugar from Rs 31 per kg in order to help millers clear cane dues of about Rs 22,000 crore to farmers.

Finally, the BSE Sensex gained 523.68 points or 1.53% to 34,731.73, while the CNX Nifty was up by 152.75 points or 1.51% to 10,244.40.

The BSE Sensex touched high and low of 34,848.37 and 34,136.39, respectively and there were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.03%, while Small cap index was up by 1.37%.

The top gaining sectoral indices on the BSE were Realty up by 6.36%, Energy up by 5.05%, Oil & Gas up by 2.51%, Telecom up by 1.81% and Industrials up by 1.80%, while IT down by 0.40% and Consumer Durables down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 6.74%, Reliance Industries up by 6.23%, Power Grid up by 4.23%, ICICI Bank up by 3.38% and Maruti Suzuki up by 3.19%. On the flip side, Indusind Bank down by 2.94%, HCL Technologies down by 1.63%, ITC down by 1.37%, Mahindra & Mahindra down by 1.35% and HDFC down by 0.87% were the top losers.

Meanwhile, Securities and Exchange Board of India (SEBI) in its latest data has showed that the share of foreign portfolio investments (FPIs) in domestic capital markets through participatory notes (P-notes) increased to Rs 60,027 crore at the end of May, making it the second consecutive monthly increase.

Of the total Rs 60,027 crore invested through the route till May, Rs 49,160 crore was invested in equities, Rs 10,606 crore in debt, Rs 159 crore in the derivatives segment and Rs 103 crore in hybrid securities. P-notes investment stood at Rs 57,100 crore, Rs 48,006 crore and 68,862 crore at the end of April 2020, March 2020 and February 2020, respectively.

The investment level had fallen to an over 15-year-low of Rs 48,006 crore at the end of March. The figure at March-end was the lowest level of investment since October 2004, when the total value of P-note investments in Indian markets stood at Rs 44,586 crore. The lower figure in March came amid significant volatility in broader markets on concerns over coronavirus-triggered recession.

The CNX Nifty traded in a range of 10,272.40 and 10,072.65 and there were 33 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 9.17%, Bajaj Finance up by 6.55%, Reliance Industries up by 6.48%, Tata Motors up by 5.76% and Bharti Infratel up by 4.99%. On the flip side, Indusind Bank down by 2.20%, Mahindra & Mahindra down by 1.31%, Vedanta down by 1.26%, HCL Technologies down by 1.20% and ITC down by 1.13% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 81.47 points or 1.31% to 6,305.54, France’s CAC rose 58.80 points or 1.19% to 5,017.55 and Germany’s DAX was up by 104.05 points or 0.85% to 12,385.58.

Asian markets ended mostly higher on Friday as investors cheered on optimism about a possible global economic recovery outweighed concerns over a second wave of the corona virus infections. Japanese shares gained after the government lifted its domestic travel curbs that were imposed to halt the spread of the corona virus pandemic. Chinese shares ended higher after policymakers pledged to maintain ample financial system liquidity in the second half of the year. Sentiments were also bolstered after the chief epidemiologist of China's Center for Diseases Prevention and Control said that the outbreak in Beijing had been brought under control.