Domestic indices trade higher in early deals amid fall in daily Covid-19 cases

Indian equity benchmarks made gap-up opening on Monday following firm trend in global peers. Markets are trading higher with gains of over half a percent each in early deals, supported by buying in Metal, PSU and Healthcare counters. A fall in the daily Covid-19 cases aided the market sentiments. With 366,499 fresh infections, India recorded a significant drop in the number of daily Covid-19 cases. Its cumulative caseload now stands at 22,662,410, while 246,146 people have died from the deadly virus. Sentiments also got boost as the Union Health Ministry said more than 72 lakh COVID-19 vaccine doses are still available with states and union territories, while over 46 lakh doses will be received by them within the next three days. Adding more optimism, data of the commerce ministry showed continuing a positive growth, India's exports grew by 80 per cent to $7.04 billion during the first week of this month. Exports during May 1-7 last year stood at $3.91 billion and $6.48 billion in the same week of May 2019.

On the global front, Asian markets are trading mostly higher, following the broadly positive cues from Wall Street on Friday as surging commodity prices and weaker than expected US job growth in April allayed fears about higher inflation, interest rates and a cutback in stimulus. However, the upside is limited amid the continued surge in daily coronavirus cases in the region, particularly in Japan and India, as well as the related lockdowns in economic activity in several markets.

Back home, pharma stocks were in focus with a private report stating that the domestic pharmaceuticals market has seen a rebound in April, with sales growing 51.5 per cent over last year, thanks to the low base of April 2020 and a pick-up in demand for Covid-19 drugs. In scrip specific developments, Cadila Healthcare advanced as it plans to submit trial data for its COVID-19 vaccine by end of May and is looking for an approval in June. However, Bandhan Bank fell after reporting an 80% dip in its March quarter net profit.

The BSE Sensex is currently trading at 49487.09, up by 280.62 points or 0.57% after trading in a range of 49441.48 and 49590.43. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.49%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 2.45%, PSU up by 1.65%, Healthcare up by 1.62%, Oil & Gas up by 1.54%, Basic Materials up by 1.31%, while IT down by 0.18%, TECK down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.26%, ONGC up by 2.15%, HDFC up by 2.01%, Sun Pharma up by 1.66% and Mahindra & Mahindra up by 1.39%. On the flip side, Ultratech Cement down by 1.23%, Infosys down by 0.56%, Bajaj Finance down by 0.32% and Nestle down by 0.02% were the top losers.

Meanwhile, S&P Global Ratings has said India's credit rating will be retained at the current level for the next two years, and the country will see a slightly faster pace of growth in the next couple of years that will support its sovereign rating. S&P, which had in March seen the Indian economy growing by 11 per cent in the fiscal year to March 2022, saw GDP growth rate dropping to 9.8 per cent under the 'moderate' scenario, where infections peak in May, and falling to as low as 8.2 per cent in 'severe' scenario under which caseload would peak only in late June.

Further, S&P Global Ratings Director - Sovereign and Public Finance Ratings - Andrew Wood said in the moderate downside scenario there would not be any major impact on the government's fiscal position. There could be upside pressure on general government fiscal deficit forecast of 11 per cent as revenue generation would be weaker, but debt stock would remain roughly stable just above 90 per cent of GDP.

He noted in the severe scenario, there could be more additional fiscal spending from the government and revenue growth would be weaker. This would mean that debt stock would stabilise only in the next financial year. He mentioned ‘India's rating remains stable on a 'BBB-' rating. We do not expect there to be a change in the rating level over the next 2 years...Of course, there are going to be some near term ramification on India's economy stemming from the severe second wave of COVID-19 and that may peep through into our sovereign credit metrics.’

The CNX Nifty is currently trading at 14915.10, up by 91.95 points or 0.62% after trading in a range of 14904.55 and 14951.25. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.39%, Coal India up by 2.81%, Tata Steel up by 2.41%, IOC up by 2.16% and Divis Lab up by 2.13%. On the flip side, Ultratech Cement down by 1.63%, Britannia Industries down by 0.59%, Infosys down by 0.56%, Bajaj Finance down by 0.51% and Hero MotoCorp down by 0.40% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 186.63 points or 0.64% to 29,544.45, KOSPI advanced 41.39 points or 1.29% to 3,238.59, Jakarta Composite jumped 44.15 points or 0.74% to 5,972.46 and Shanghai Composite was up by 2.03 points or 0.06% to 3,420.90.  On the other hand, Straits Times fell 20.48 points or 0.64% to 3,179.78, Hang Seng declined 148.69 points or 0.52% to 28,461.96 and Taiwan Weighted slipped 23.38 points or 0.14% to 17,261.62.