Indian equities add gains in late afternoon session

Indian equity markets added some more points in late afternoon session, with the Sensex and Nifty gaining above 250 and 50 points, respectively. Banking, PSU and capital goods have elevated with gains on their respective front line stocks. Traders remained optimistic with the Finance Ministry’s statement that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector impacted by slowdown caused by the coronavirus pandemic. Markets traded in  green territory even after RBI said that real gross domestic product (GDP) growth in 2020-21 is expected to be negative at (-) 9.5 per cent, with risks tilted to the downside: (-) 9.8 per cent in Q2:2020-21; (-) 5.6 per cent in Q3; and 0.5 per cent in Q4. Real GDP growth for Q1:2021-22 is placed at 20.6 per cent.

On the global front, Asian markets are trading mixed with Chinese markets leading regional gains as trading resumed after the Golden Week holidays. Renewed hopes of U.S. stimulus coupled with signs of recovery in China's services sector helped underpin investor sentiment. European markets were trading mostly in green on rosy earnings forecasts from retailers Pandora and Zalando as well as drugmaker Novo Nordisk, with investors keeping an eye out for signs of fresh U.S. stimulus.

The BSE Sensex is currently trading at 40489.67, up by 307.00 points or 0.76% after trading in a range of 40066.54 and 40568.91. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.33%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were Bankex up by 1.67%, Capital Goods up by 1.40%, PSU up by 0.84%, Metal up by 0.74% and Oil & Gas was up by 0.59%, while Realty down by 1.33%, Healthcare down by 1.01%, FMCG down by 0.83%, Consumer Discretionary down by 0.62% and Auto was down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.21%, ONGC up by 2.70%, HDFC Bank up by 2.53%, ICICI Bank up by 2.35% and Axis Bank up by 2.14%. On the flip side, Sun Pharma down by 2.13%, Asian Paints down by 1.93%, Nestle down by 1.77%, Ultratech Cement down by 1.13% and Hindustan Unilever down by 0.93% were the top losers.

Meanwhile, Reserve Bank of India (RBI) has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent.

The monetary policy committee (MPC) of RBI also decided to continue with the accommodative stance as long as necessary - at least during the current financial year and into the next financial year - to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the economic growth front, RBI said that real gross domestic product (GDP) growth in 2020-21 is expected to be negative at (-) 9.5 per cent, with risks tilted to the downside: (-) 9.8 per cent in Q2:2020-21; (-) 5.6 per cent in Q3; and 0.5 per cent in Q4. Real GDP growth for Q1:2021-22 is placed at 20.6 per cent. On the inflation front, CPI inflation is projected at 6.8 per cent for Q2:2020-21, at 5.4-4.5 per cent for H2:2020-21 and 4.3 per cent for Q1:2021-22, with risks broadly balanced.

The CNX Nifty is currently trading at 11911.45, up by 76.85 points or 0.65% after trading in a range of 11805.20 and 11935.75. There were 23 stocks advancing against 26 stocks declining on the index, while 1 stock remains unchanged.

The top gainers on Nifty were Larsen & Toubro up by 3.43%, HDFC Bank up by 3.19%, ICICI Bank up by 2.97%, Axis Bank up by 2.89% and ONGC up by 2.70%. On the flip side, Grasim Industries down by 3.39%, HDFC Life Insurance down by 2.25%, UPL down by 2.18%, Sun Pharma down by 2.18% and SBI Life down by 1.91% were the top losers.

Asian markets are trading mixed, Shanghai Composite gained 54.03 points or 1.68% to 3,272.08, Jakarta Composite soared 14.52 points or 0.29% to 5,053.66. On the flip side, Straits Times trembled 8.02 points or 0.32% to 2,535.09, Nikkei 225 slipped 27.38 points or 0.12% to 23,619.69 and Hang Seng was down by 74.22 points or 0.31% to 24,119.13.

European markets were trading mostly in green, UK’s FTSE 100 increased 36.76 points or 0.61% to 6,014.79, France’s CAC increased 12.49 points or 0.25% to 4,924.43. On the flip side, Germany’s DAX was down by 9.88 points or 0.08% to 13,032.33.