Sensex, Nifty manage to keep head above water

Indian equity benchmarks were managing to keep their heads above water in late morning deals, on the back of positive cues from other Asian markets. In line with the larger peers, the broader indices also maintained to trade in green terrain in late morning session. However, upside remained capped, amid a private report stating that as many as 159 companies listed on the BSE cumulatively saw a decline of Rs 22,538 crore in their EBITDA in the three months ended March 2020 compared to the December quarter, reflecting an early impact of the coronavirus pandemic. EBITDA stands for earnings before interest, tax, depreciation and amortisation.

On the global front, Asian markets were trading mostly in green, even after Japan's gross domestic product plummeted an annualized 27.8 percent on year in the second quarter of 2020. That missed expectations for a decline of 27.2 percent following the 2.2 percent drop in the previous three months. On a seasonally adjusted quarterly basis, GDP sank 7.8 percent - again missing forecasts for a fall of 7.6 percent following the 0.6 percent slide in the three months prior.

The BSE Sensex is currently trading at 37888.53, up by 11.19 points or 0.03% after trading in a range of 37734.14 and 38119.38. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Power up by 2.13%, Utilities up by 1.87%, Auto up by 1.78%, Realty up by 1.40% and Consumer Discretionary up by 1.29%, while Energy down by 1.28%, Oil & Gas down by 0.49% and Bankex down by 0.39% were the few losing indices on BSE.

The top gainers on the Sensex were NTPC up by 5.60%, Bajaj Auto up by 3.28%, Tech Mahindra up by 2.74%, Larsen & Toubro up by 1.83% and Power Grid up by 1.65%. On the flip side, SBI down by 1.81%, Reliance Industries down by 1.58%, Axis Bank down by 1.44%, ICICI Bank down by 0.66% and Bharti Airtel down by 0.59% were the top losers.

Meanwhile, in bid to revive economic activity, Niti Aayog Vice Chairman Rajiv Kumar has said the next few months will be ‘critical’ for India and further fiscal measures may be warranted to ensure that recovery gathers pace. He also noted that while early signs of economic recovery are encouraging, sustainability of this recovery will be key. He said ‘the downside risks are still very real. Further fiscal measures may be warranted to ensure that the recovery gathers pace and does not peter out’.

On a year-on-year basis, most of the high frequency indicators are still in negative territory, Kumar said, adding that the fiscal deficit is expected to widen significantly. He said yet, data for June seems to suggest there are some green shoots visible. He noted that a global economic contraction is on the cards, the magnitude of which is undergoing constant revision. He said ‘the same is true for India. Economic activity was at a virtual standstill in April and May. And this was reflected in all high frequency indicators of the economy’.

Kumar also pointed out that India has taken several decisive steps apart from monetary and fiscal easing to boost the economy. He highlighted ‘An ambitious vision of an Aatmanirbhar Bharat has been laid out by the Prime Minister. Realising this vision will entail leveraging India's advantages relative to the world’. Further, Kumar said that countries are also taking on more and more debt as they announce stimulus packages to battle the economic crisis.

He said ‘With government debt levels at historic highs, and interest rates at historic lows, credit-driven growth is likely to be modest at best’. However, Kumar said the price of gold indicates a flight to safe asset choices to protect wealth. He said ‘As prices of gold continue to rise, we also need to watch out for inflation in asset prices relative to consumer prices, as the market is currently awash with liquidity. The world can ill afford a financial crisis on top of an economic one.’

The CNX Nifty is currently trading at 11199.40, up by 21.00 points or 0.19% after trading in a range of 11144.50 and 11248.90. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were NTPC up by 5.71%, Eicher Motors up by 4.82%, Zee Entertainment up by 3.60%, Hero MotoCorp up by 3.56% and Bajaj Auto up by 3.31%. On the flip side, Grasim Industries down by 2.54%, SBI down by 1.83%, Reliance Industries down by 1.60%, Axis Bank down by 1.48% and BPCL down by 1.42% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 358.53 points or 1.42% to 25,541.54, Taiwan Weighted strengthened 133.44 points or 1.04% to 12,928.90 and Shanghai Composite gained 76.20 points or 2.27% to 3,436.30. On the flip side, Straits Times trembled 2.33 points or 0.09% to 2,578.99 and Nikkei 225 slipped 144.14 points or 0.62% to 23,145.22.