Benchmarks trade higher in early deals on positive global cues

Indian equity benchmarks made optimistic start on Tuesday mirroring positive global cues. Markets are trading higher in early deals after the announcement of Unlock 2 - phase of the reopening of the economy. Investors are looking ahead to the Prime Minister Narendra Modi's address at 4 PM today in which he is expected to speak on the Unlock 2 - phase as well as the government's decision to ban 59 Chinese mobile apps amid border tensions with China. Traders took encouragement with report that the Reserve Bank of India (RBI) will be conducting a buy and sell open market operations (OMO) in bonds worth Rs 10,000 crore. Adding optimism, Union minister Mahendra Nath Pandey said that the government has approved the third phase of skill development scheme, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), with an increased focus on digital technology and industry 4.0. Meanwhile, India recorded over 18,000 Covid-19 cases in the last 24 hours, taking its total count to 567,536. Around 16,900 people have succumbed to the disease.

On the global front, all the Asian markets are trading higher following the strong gains overnight on Wall Street as investors’ sentiment was bolstered by upbeat US housing data and hopes of more stimulus measures, which offset worries about the sharp spikes in new coronavirus cases in the US and other parts of the world. Data showing that China's manufacturing sector expanded more than expected in June also boosted stocks.

Back home, telecom stocks are in limelight after the Trai released mobile subscriber data for the month of February. In scrip specific development, Tata Steel gained despite reporting net loss of Rs 1,615.35 crore for the quarter ended March 31. Raymond India lost on reporting a net loss of Rs 69 crore in the quarter ended 31 March 2020 against a profit of Rs 68 crore in the quarter of the preceding fiscal.

The BSE Sensex is currently trading at 35220.36, up by 258.84 points or 0.74% after trading in a range of 35108.50 and 35233.91. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.83%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Metal up by 2.69%, Realty up by 2.14%, Basic Materials up by 1.61%, Telecom up by 1.54%, Auto up by 1.31% while, IT down by 0.50%, TECK down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.84%, ICICI Bank up by 2.58%, Axis Bank up by 2.29%, NTPC up by 2.11% and Indusind Bank up by 1.87%. On the flip side, TCS down by 1.12%, Sun Pharma down by 0.78%, Infosys down by 0.68% and HDFC Bank down by 0.25% were the few losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the gross state domestic product (GSDP) of all states in India is likely to contract in the range of 1.4 to 14.3 percent in the current financial year (FY21) due to the impact of Covid-19-induced lockdown on economic activities. It also said the states that will witness a double-digit contraction in GSDP growth in FY21 are Assam, Goa, Gujarat and Sikkim. It noted that the top five major states where the impact of lockdown was the most pronounced are Karnataka, Jharkhand, Tamil Nadu, Kerala and Odisha. Similarly, the five major states where impact of lockdown was the least pronounced are Madhya Pradesh, Punjab, Bihar, Andhra Pradesh and Uttar Pradesh.

The report stated that despite the nation-wide lockdown enforced on March 25, 2020, several economic activities defined as essentials remained operational. It said the impact of the lockdown on sectors namely agriculture, industry and services were differently. It also said that since agricultural activities were less impacted, the states having a higher share of agriculture are expected to have suffered less compared to the one where the share of agriculture is low. 

According to the report, some sub-sectors especially in the services such as banking and financial services, IT and IT-enabled services were less impacted, because they were able to readjust their operations remotely owing to the high penetration of digital platform in their business operations. It added that the states in which the share of these services is high are expected to have suffered less during the lockdown compared to the one where share of these services is low. 

The CNX Nifty is currently trading at 10397.20, up by 84.80 points or 0.82% after trading in a range of 10365.35 and 10401.05. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.39%, Hindalco up by 3.12%, ICICI Bank up by 2.62%, UPL up by 2.57% and Axis Bank up by 2.27%. On the flip side, TCS down by 1.02%, Sun Pharma down by 0.91%, Infosys down by 0.77%, HDFC Bank down by 0.12% and GAIL India down by 0.05% were the top losers.

All the Asian markets are trading in green; Nikkei 225 surged 370.33 points or 1.68% to 22,365.37, Straits Times jumped 29.28 points or 1.14% to 2,603.38, Hang Seng gained 209.38 points or 0.86% to 24,510.66, Taiwan Weighted increased 47.24 points or 0.41% to 11,589.86, KOSPI rose 34.18 points or 1.63% to 2,127.66, Jakarta Composite advanced 19.88 points or 0.41% to 4,921.70 and Shanghai Composite was up by 17.04 points or 0.58% to 2,978.56.