Sensex, Nifty end volatile session higher

Indian equity benchmarks traded with volatility, but in green terrain, throughout the day and ended Friday's session with gains of around a percent on the back of buying by participants amid positive cues from global markets. The benchmarks staged a gap up opening, as traders took encouragement from Union Commerce Minister Piyush Goyal’s statement that India is keen to focus on certain sectors where it has competitive advantage, emphasising that the country cannot afford to remain dependent on low cost, low quality products. Some support also came with a report stated that India and the US will restart high level negotiations on a trade pact in the coming days.

However, volatility struck the markets in noon deals as they pared most of gains to come off intraday highs, as investors turned anxious with FIEO’s statement that the country's exports are likely to witness a 10-12% year-on-year decline during the ongoing fiscal, if the current trend persists, due to the contraction in global demand on account of the COVID-19 pandemic. Some concern also came with the US-India Business Council (USIBC) stating that the delay in clearance of shipments at customs would adversely affect the Make-In-India initiative, economic growth, and job creation amid increased vigilance at ports in view of border tension with China. But, key gauges strengthened once again in final hour of trade and settled near day’s high, taking support from report that Union Finance Minister Nirmala Sitharaman’s statement that the government was in talks with the Reserve Bank of India (RBI) for a one-time restructuring of loans to help companies which are under stressed due to the Covid-19 pandemic.

On the global front, Asian markets ended mostly higher on Friday, after U.S. regulators announced plans to ease restrictions on large banks' investments and a report showed U.S. orders for durable goods jumped in May by the most in nearly six years. European markets were trading higher after the European Central Bank reaffirmed its dovish stance in the minutes of its policy meeting while the dollar struggled at U.S. coronavirus infections surged. Back home, sugar stocks were buzzing with industry body ISMA’s statement that sugar output in India, the world's second largest producer after Brazil, is expected to increase by 17.69% to 32.01 million tonnes during the season beginning October 2020 on likely higher availability of sugarcane for crushing. Stocks related to defence sector also in focus with Minister of State for Defence Shripad Naik’s statement that strong indigenous defence-manufacturing capabilities would help India safeguard its prosperity generated over the last couple of decades. Naik emphasised on the huge opportunity the defence sector presents for the micro, small and medium enterprises (MSMEs).

Finally, the BSE Sensex gained 329.17 points or 0.94% to 35,171.27, while the CNX Nifty was up by 94.10 points or 0.91% to 10,383.00.

The BSE Sensex touched high and low of 35,254.88 and 34,910.34, respectively and there were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were IT up by 5.06%, TECK up by 4.02%, Oil & Gas up by 2.75%, Energy up by 1.76% and Utilities up by 1.07%, while FMCG down by 1.16%, Realty down by 1.10%, Healthcare down by 0.54%, Consumer Durables down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 6.94%, TCS up by 5.21%, Indusind Bank up by 3.64%, ONGC up by 2.87% and HDFC Bank up by 2.59%. On the flip side, ITC down by 3.54%, Bajaj Finance down by 3.33%, Kotak Mahindra Bank down by 3.00%, Sun Pharma down by 1.58% and Bajaj Finserv down by 1.11% were the top losers. 

Meanwhile, emphasizing that India cannot afford to remain dependent on low cost, low quality products, Union Commerce Minister Piyush Goyal said the country is very keen to focus on certain sectors where it has competitive advantage. Citing example, he said in the steel sector, India can expand significantly and boost exports. He added that with domestic skilled manpower, availability of certain raw materials, resources and minerals, India can achieve a good growth in certain sectors.

The minister said in sectors like oil and gas and medical devices, India and the US can do a lot of business. Talking about foreign investment, he said barring few sensitive areas, India permits FDI in almost all sectors under automatic route. Besides, he said ‘there are certain ... sectors where we do have constraints and we will not be able to open up anytime soon. If it is related with multi-brand retail, insurance...these are sectors where there have been sensitivities and very serious concerns.’

Further, Goyal said that India is taking steps to simplify procedures and make it online to enhance transparency and improve investment environment. On special economic zones, he said ‘we are seriously looking at how we can change from the earlier system of SEZs  more to industrial clusters and in manufacturing zones so that we are well within the rules of global engagement.’

The CNX Nifty traded in a range of 10,409.85 and 10,311.25 and there were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Infosys up by 6.64%, BPCL up by 6.50%, TCS up by 4.92%, Indian Oil Corporation up by 4.76% and Indusind Bank up by 3.76%. On the flip side, Bajaj Finance down by 3.09%, ITC down by 3.07%, Bharti Infratel down by 2.82%, Kotak Mahindra Bank down by 2.35% and Tata Motors down by 1.73% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 100.45 points or 1.63% to 6,247.59, France’s CAC rose 82.89 points or 1.69% to 5,001.47 and Germany’s DAX was up by 133.78 points or 1.1% to 12,311.65.

Asian markets ended mostly higher on Friday, tracking gains on Wall Street overnight after U.S. regulators eased bank rules that will free up billions of capital. The news helped offset worries about a continued surge in coronavirus cases in the United States. Though, Hong Kong shares ended lower as the US Senate passed a bipartisan bill by unanimous consent that would impose sanctions on China for its decision to implement national security laws in Hong Kong and Macau. Meanwhile, markets in Taiwan and China were closed for the Dragon Boat Festival.