Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in the afternoon session, following gains in metal, basic materials and bankex stocks. Healthy buying was observed in blue-chip stocks like Bajaj Finance, Tata Steel and Bajaj Finserv. Besides, broader indices were trading mixed with the BSE Mid cap index lost 0.02%, while Small cap index was up by 0.41%. Sentiments perked up as the Cabinet approved the development of affordable rental housing complexes (ARHCs) for urban migrants and poor as a sub-scheme under the Pradhan Mantri (PM) Awas Yojana. This initiative was first announced by Finance Minister Nirmala Sitharaman as part of the Atmanirbhar Bharat package in May. Meanwhile, Prime Minister Narendra Modi will be addressing the India Global Week 2020 today via video conferencing. His address is likely to focus on India's trade and foreign investment prospects.

On the global front, Asian markets were trading mostly in green, buoyed on the expectations for economic recovery and as investors looked ahead to earnings season. Back home, the market breadth on BSE was positive, out of 2607stocks traded, 1314 stocks advanced, while 1136 stocks declined on the BSE, while 157 stocks remain unchanged.

The BSE Sensex is currently trading at 36568.46, up by 239.45 points or 0.66% after trading in a range of 36422.30 and 36636.48. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.02%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Metal up by 2.16%, Basic Materials up by 1.13%, Bankex up by 0.88%, Utilities up by 0.55% and Energy was up by 0.46%, while FMCG down by 0.60%, Capital Goods down by 0.39%, Consumer Durables down by 0.36%, Auto down by 0.28% and Telecom was down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 3.96%, Tata Steel up by 3.19%, Bajaj Finserv up by 2.70%, HDFC up by 2.38% and Axis Bank was up by 1.97%. On the flip side, Tech Mahindra down by 1.40%, Titan Company down by 0.87%, ITC down by 0.84%, Maruti Suzuki down by 0.83% and ONGC was down by 0.55% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that fundamentals of India’s telecom sector improved during Q4 (January-March) of 2019-20, on the back of price hikes in December, ability among telcos to reduce the churn of customers and more subscribers opting for 4G. It believed that the lockdown due to coronavirus pandemic has provided another strong fillip to the ongoing trend of 2G and 3G customers for telcos transitioning to 4G, driven by the needs of higher data download speed and limits. 

It can be noted that the aggressive play by Reliance Jio since its 2016 entry into the market has left a deep impact on the telecom sector resulting in heavy losses being reported by companies and some market exits. Overall, it said operational trends continued to improve for the telecom sector in Q4 FY20 with Average Revenue Per User (ARPUs) for Bharti, Vodafone-Idea and Reliance Jio rising 14 percent, 11 percent and 2 percent, respectively, quarter on quarter. It also stated that the rise in ARPU was driven by a 20 percent tariff hike undertaken by the telcos in December 2019 and continued transition of customers from 2G/3G to 4G.

According to the report, Reliance Jio continued to gain in the subscriber market share even in Q4 FY20 but the pace of market share acquisition has slowed markedly in recent quarters amid declining competitive intensity in the sector. About future trends, it said internet traffic has seen an 11 percent increase in April, which will augur well on the data usage front for the telcos. It added that the jump in data usage was due to a higher activity on aspects like movies and gaming during the COVID-19 related lockdowns.

The CNX Nifty is currently trading at 10771.90, up by 66.15 points or 0.62% after trading in a range of 10733.00 and 10792.10. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.19%, GAIL India up by 3.99%, Bajaj Finance up by 3.75%, Tata Steel up by 3.20% and Bajaj Finserv was up by 2.57%. On the flip side, Bharti Infratel down by 2.89%, Hero MotoCorp down by 1.44%, Tech Mahindra down by 1.29%, UPL down by 1.11% and ITC was down by 0.94% were the top losers.

Most of the Asian markets were trading higher; Jakarta Composite soared 4.67 points or 0.09% to 5,080.84, Taiwan Weighted strengthened 22.50 points or 0.18% to 12,192.69, Shanghai Composite gained 22.82 points or 0.67% to 3,426.26, KOSPI rose 9.02 points or 0.42% to 2,167.90 and Nikkei 225 was up by 90.64 points or 0.4% to 22,529.29.

On the other hand; Straits Times trembled 11.16 points or 0.42% to 2,658.33 and Hang Seng was down by 8.89 points or 0.03% to 26,120.29.