Benchmarks turn positive in late afternoon session

Indian benchmarks erased all their losses to turn positive in late afternoon session despite weak European markets. The broader indices, Mid-caps and Small-caps, are also trading in green. Sentiment on the street  improved with a Ficci-Dhruva Advisors industry survey report stating that the opening up of India's economy post lockdown and implementation of the economic package unveiled by the government have started showing results on the ground with initial signs of improvement in the performance of businesses now visible. Some optimism also came with Finance Ministry’s Economic Affairs Department in its latest Macroeconomic Report for June said that early green shoots of economic revival have emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up. It also said economy will grow further on the back of a conducive policy environment, nudging the coronavirus-hit economy to move on the path of recovery and growth.

On the global front, European markets were trading lower, as investors booked profits after a strong rally in the previous session, with a surge in U.S. coronavirus cases also weighing on sentiment. Back home, sector wise, MSMEs sector remained in focus as World Bank and the Government of India (GoI) have signed the $750 million agreement for the MSME Emergency Response Programme.

The BSE Sensex is currently trading at 36565.34, up by 78.06 points or 0.21% after trading in a range of 36271.09 and 36660.35. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.44%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Bankex up by 1.31%, IT up by 1.23%, TECK up by 0.83%, Consumer Discretionary up by 0.44% and Auto was up by 0.28%, while Oil & Gas down by 2.26%, Utilities down by 2.03%, Energy down by 1.96%, Metal down by 1.38% and PSU was down by 1.32% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 6.47%, Indusind Bank up by 4.03%, ICICI Bank up by 3.33%, Bajaj Finserv up by 3.19% and Infosys up by 3.07%. On the flip side, ITC down by 2.70%, Power Grid down by 2.53%, NTPC down by 2.31%, Tata Steel down by 2.18% and Reliance Industries down by 1.99% were the top losers.

Meanwhile, with an aim to support increased flow of finance into the hands of micro, small, and medium enterprises (MSMEs), the World Bank and the Government of India (GoI) have signed the $750 million agreement for the MSME Emergency Response Programme.

The World Bank’s MSME Emergency Response Programme will address the immediate liquidity and credit needs of some 1.5 million viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs. This is the first step among a broader set of reforms that are needed to propel the MSME sector over time.

Meanwhile, the Government of India is focused on ensuring that the abundant financial sector liquidity available flow to NBFCs, and that banks which have turned extremely risk averse, continue taking exposures in the economy by lending to NBFCs. This project will support the Government in providing targeted guarantees to incentivize NBFCs and banks to continue lending to viable MSMEs to help sustain them through the crisis.

The CNX Nifty is currently trading at 10769.40, up by 5.75 points or 0.05% after trading in a range of 10689.70 and 10803.60. There were 21 stocks advancing against 28 stocks declining on the index, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Bajaj Finance up by 6.50%, Indusind Bank up by 4.05%, ICICI Bank up by 3.27%, Bajaj Finserv up by 3.25% and Infosys up by 2.97%. On the flip side, Adani Ports by 3.76%, BPCL down by 2.90%, ITC down by 2.70%, Grasim Industries down by 2.63% and Power Grid down by 2.47% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 66.39 points or 1.06% to 6,219.55, France’s CAC decreased 52.53 points or 1.03% to 5,028.98 and Germany’s DAX was down by164.65 points or 1.29% to 12,568.80.