Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in the morning session, on the back of value buying by fund and retail investors in the select blue chip counters amid firm global cues. Frontline gauges surged above their crucial 37,700 (Sensex) and 11,150 (Nifty) levels. Sentiments remained upbeat with report that the Finance Ministry is likely to provide capital support from the Rs 20,000 crore fund approved by Parliament in recently concluded session to some Public Sector Banks (PSBs) in the third quarter (Q3) itself. Parliament approved Rs 20,000 crore for PSB capital infusion as part of the first batch of Supplementary Demands for Grants for 2020-21 which sought additional spending of a record Rs 2.35 trillion primarily to meet expenses for combating the Covid-19 pandemic. Adding to the optimism, union Minister Pratap Chandra Sarangi has called for efforts by the local industry to capture the country's huge domestic market, in line with Prime Minister Narendra Modi's vision of 'Aatmanirbhar Bharat' or a self-reliant India. Traders overlooked Economic think-tank NCAER in its quarterly review of the economy stated that India’s gross domestic product (GDP) growth is likely to decline by 12.6 percent during the current financial year (FY21) on account of the impact of the coronavirus pandemic on the business activities.

On the global front, Asian markets were trading mostly in green, tracking a healthy lead from Wall Street as bargain-buyers moved in following a recent sell-off, though advances were limited by worries about fresh virus spikes and the re-imposition of economically damaging containment measures. Back home, pharma stocks remained in focus as investment information agency ICRA said the global demand scenario for Indian pharmaceutical industry is largely expected to remain stable due to inelastic nature of prescription drugs. It also said though some impact on volume growth will be felt owing to Covid-19 lockdowns and lower economic growth, the impact will be felt more in less developed countries, which are additionally negatively impacted owing to low crude oil prices.

The BSE Sensex is currently trading at 37732.07, up by 343.41 points or 0.92% after trading in a range of 37544.05 and 37810.37. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.56%, while Small cap index was up by 1.83%.

The top gaining sectoral indices on the BSE were Power up by 2.68%, PSU up by 2.53%, Oil & Gas up by 2.37%, Utilities up by 2.28% and Industrials up by 2.19%, while IT down by 0.29% and TECK down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 5.22%, Bajaj Finance up by 3.95%, NTPC up by 3.42%, Indusind Bank up by 2.67% and Bajaj Finserv up by 2.47%. On the flip side, Infosys down by 1.02%, TCS down by 0.70% and Bharti Airtel down by 0.52% were the top losers.

Meanwhile, global rating agency S&P in its latest report has said that India’s economy is likely to experience a record contraction in the current financial year (FY21) mainly due to the global Covid-19 pandemic, and the real GDP growth is expected to recover from next fiscal onwards. It said India’s weak fiscal settings will worsen further this year, constraining the government’s ability to aid the economy.

However, it said the country’s external settings have improved, helped by the rapid accumulation of foreign exchange reserves. It said ‘we are affirming our ‘BBB-’ long-term and ‘A-3’ short-term foreign and local currency sovereign credit ratings on India.’ It stated the stable outlook reflects our view that India’s contraction in fiscal 2021 will be followed by a significant recovery, which will stabilise the country’s broader credit profile’.

It mentioned the sovereign credit ratings on India reflect the economy’s above-average long-term real GDP growth, sound external profile and evolving monetary settings. India’s democratic institutions promote policy stability and compromise, and also underpin the ratings. It added that these strengths are balanced against vulnerabilities stemming from the country’s low per-capita income and weak fiscal settings, including consistently elevated general government deficits and indebtedness.

The CNX Nifty is currently trading at 11152.50, up by 102.25 points or 0.93% after trading in a range of 11099.85 and 11177.95. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.01%, Tata Motors up by 3.89%, Bajaj Finance up by 3.82%, Adani Ports &SEZ up by 3.73% and GAIL India up by 3.46%. On the flip side, Infosys down by 1.00%, Cipla down by 0.82%, TCS down by 0.59%, Bharti Airtel down by 0.59% and Wipro down by 0.03% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 193.82 points or 1.58% to 12,426.73, Hang Seng increased 170.89 points or 0.74% to 23,406.31, Nikkei 225 surged 140.40 points or 0.61% to 23,345.02, KOSPI rose 33.36 points or 1.46% to 2,312.15 and Straits Times advanced 10.12 points or 0.41% to 2,482.40.

On the flip side, Shanghai Composite declined 7.15 points or 0.22% to 3,212.27 and Jakarta Composite lost 22.03 points or 0.45% to 4,923.76.