Benchmarks trim gains in morning session

Indian equity benchmarks trimmed gains in the morning session but were still trading in green, on emergence of buying by funds and retail investors amid positive cues from global markets. Sentiments got some support with Union minister Mahendra Nath Pandey’s statement 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. However, gains got trimmed as 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. Meanwhile, investors also keenly watched for the government's guidelines for second phase of Unlock and PM Narendra Modi's address to the nation at 4 pm. On the sectoral front, stocks related to ports and shipping industry were in focus with rating agency ICRA stating that the Indian port sector has been adversely impacted due to the COVID-19 pandemic and the subsequent lockdown, and it is likely to witness 5-8 per cent contraction in cargo volumes.

On the global front, Asian markets were trading in green after data showed China's manufacturing sector grew more than expected in June, a hopeful sign for a global economy still struggling to recover from the sweeping impact of the coronavirus crisis. Back home, the BSE Sensex is currently trading at 35121.50, up by 159.98 points or 0.46% after trading in a range of 35091.92 and 35233.91. There were 19 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.05%.

The top gaining sectoral indices on the BSE were Metal up by 1.94%, Realty up by 1.35%, Basic Materials up by 1.08%, Bankex up by 0.68% and PSU up by 0.56%, while Healthcare down by 0.45%, TECK down by 0.04% and IT down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.19%, ICICI Bank up by 2.62%, NTPC up by 2.00%, HDFC up by 2.00% and Ultratech Cement up by 1.35%. On the flip side, Sun Pharma down by 1.16%, HDFC Bank down by 0.74%, Power Grid down by 0.34%, Infosys down by 0.33% and Bajaj Auto down by 0.23% were the top losers.

Meanwhile, on a review of current and evolving liquidity and market conditions, the Reserve Bank of India (RBI) has decided to conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crore each on July 2.

The RBI said it will buy government securities including 6.79 per cent, 7.26 per cent, 6.68 per cent and 6.57 per cent maturing on May 15, 2027, January 14, 2029, September 17, 2031 and December 5, 2033.

On the other hand, it will sell securities that mature between October 2020 and April 2021. The RBI said that it reserves the right to decide on the quantum of purchase or sale of individual securities, accept bids or offers for less than the aggregate amount, purchase or sell marginally higher or lower than the aggregate amount due to rounding off and to accept or reject any or all the bid/offers either wholly or partially without assigning any reasons.

The CNX Nifty is currently trading at 10361.30, up by 48.90 points or 0.47% after trading in a range of 10354.50 and 10401.05. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.38%, Hindalco up by 3.05%, ICICI Bank up by 2.64%, UPL up by 2.22% and HDFC up by 2.06%. On the flip side, GAIL India down by 1.64%, Sun Pharma down by 1.17%, HDFC Bank down by 0.72%, Dr. Reddys Lab down by 0.44% and Power Grid down by 0.42% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 404.70 points or 1.84% to 22,399.74, Taiwan Weighted strengthened 52.49 points or 0.45% to 11,595.11, KOSPI rose 36.93 points or 1.76% to 2,130.41, Straits Times advanced 29.62 points or 1.15% to 2,603.72, Shanghai Composite gained 17.04 points or 0.58% to 2,978.56, Jakarta Composite soared 17.12 points or 0.35% to 4,918.94 and Hang Seng increased 215.16 points or 0.89% to 24,516.44.