Bourses manage to keep heads in green terrain

Indian equity benchmarks managed to keep heads in green terrain in morning session, as economic activities in the country are getting back to the pre-Covid level although infection cases continue to rise. Sentiments also remained positive with report stating 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. Some support also came as the government is working on steps to reduce import dependence on China and boost domestic manufacturing. However, gains remain capped with Icra’s report that earnings of India Inc fell by nearly a fourth in January-March as compared to the year-ago period due to legacy problems, warning of deeper impact in the June quarter due to Covid-19-induced lockdown. Absolute earnings of the corporate India contracted by 22% and 12% in Q4FY20 and FY20, respectively. On the sectoral front, stocks related to textile sector remained 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.

On the global front, Asian markets were trading mostly in green despite lingering concerns about a fresh spike in coronavirus cases. Back home, the BSE Sensex is currently trading at 34300.41, up by 92.36 points or 0.27% after trading in a range of 34136.39 and 34440.26. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 1.14%.

The top gaining sectoral indices on the BSE were Realty up by 3.67%, Energy up by 1.48%, Industrials up by 1.18%, Oil & Gas up by 1.15% and Telecom up by 1.12%, while IT down by 0.65% and TECK down by 0.30% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.02%, Reliance Industries up by 1.74%, ONGC up by 1.61%, Axis Bank up by 1.55% and Maruti Suzuki up by 1.54%. On the flip side, Infosys down by 1.41%, HDFC down by 1.40%, Mahindra & Mahindra down by 1.28%, HCL Technologies down by 1.17% and ITC down by 0.96% were the top losers.

Meanwhile, the rating agency -- Icra has said that earnings of India Inc dropped by nearly a fourth in January-March of 2020 as compared to the year-ago period due to legacy problems. The agency warned deeper impact in the June quarter due to Covid-19-induced lockdown. It said that absolute earnings of the corporate India contracted by 22 per cent and 12 per cent in Q4FY20 and FY20, respectively.  It mentioned that the financial performance of the Indian Corporate sector in Q4 FY20 was primarily hurt by consumer and commodity-linked sectors, both of which were impacted significantly as the pandemic started spreading rapidly.

Tepid realisations driven by softening commodity prices, coupled with subdued volumes in light of the pandemic outbreak and macroeconomic slowdown, resulted in revenue contraction for major commodity sectors, including oil and gas entities, metals & mining and iron & steel. The major impact on revenues came from commodity-linked sectors, which witnessed a contraction of 15 per cent in revenues on account of tepid realisations and subdued volumes. It added revenues in the consumer-oriented sectors fell by 9 per cent.

Besides, it said India was under lockdown for the past two months. It analysed 184 companies, excluding the ones in the financial sector, for the study. The study showed a 2.9 per cent revenue contraction during the March quarter when compared to the year-ago same period, and a 0.30 per cent dip in the operating profit margins to 16.8 per cent. It can be noted that with the onset of the pandemic, the investor class had got apprehensive about corporate earnings which resulted in a massive sell-off in equities.

The CNX Nifty is currently trading at 10112.15, up by 20.50 points or 0.20% after trading in a range of 10072.65 and 10162.20. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.94%, Bajaj Finserv up by 2.70%, Adani Ports & SEZ up by 2.41%, BPCL up by 2.04% and Reliance Industries up by 1.69%. On the flip side, HDFC down by 1.58%, Infosys down by 1.51%, Mahindra & Mahindra down by 1.44%, ITC down by 1.18% and Wipro down by 1.17% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 138.47 points or 0.62% to 22,493.93, Taiwan Weighted strengthened 25.75 points or 0.22% to 11,574.08, Jakarta Composite soared 16.88 points or 0.34% to 4,942.13, Shanghai Composite gained 11.42 points or 0.39% to 2,950.74 and KOSPI rose 0.26 points or 0.01% to 2,133.74.

On the flip side, Hang Seng decreased 16.78 points or 0.07% to 24,448.16 and Straits Times trembled 20.05 points or 0.75% to 2,645.61.