Benchmarks trade flat with negative bias in early deals

Indian equity benchmarks made cautious start on Friday, after a day’s halt as markets were closed yesterday on account of Eid al-Fitr. Domestic indices are trading flat with negative bias in early deals amid worries over the economic impact of the second wave of COVID-19 and lockdowns and restrictions in various states. The Maharashtra government has extended the lockdown-like restrictions in the state till June 1 to break the chain of COVID-19. However, drop in Covid cases limit the downside. India reported a dip in fresh Covid cases to below 3.5 lakh mark at 3,43,122. This was lower than Wednesday's figure of 3,62,720 cases. Market participants also react to the IIP and CPI numbers. India’s factory output climbed 22.4 per cent in March, benefiting from the base effect of the lockdown-marred month a year back as well as a turnaround in the manufacturing sector, while retail inflation slipped to a three-month low of 4.29 per cent in April. Investors are eyeing WPI inflation data for April slated to be declared later in the day.

On the global front, most of the Asian markets were trading higher after three straight sessions of losses, following the broadly positive cues overnight from Wall Street on better-than-expected weekly labor market data. Markets in Indonesia and Malaysia are closed for Eid al-Fitr holiday.

Back home, FMCG stocks were in focus with a private report indicating that the April-June period remains largely volatile and dynamic for the country's Rs 4.3-trillion fast-moving consumer goods (FMCG) industry as the second Covid-19 wave rages on. In scrip specific development, Dr Reddy's Lab gained ahead of its March quarter earnings to be out later in the day. UPL traded jubilantly as it reported a 73.6% growth in consolidated net profit at Rs 1,361 crore for the March quarter.

The BSE Sensex is currently trading at 48676.33, down by 14.47 points or 0.03% after trading in a range of 48485.85 and 48898.93. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.27%, while Small cap index was down by 0.25%.

The top gaining sectoral indices on the BSE were FMCG up by 0.72%, Consumer discretionary up by 0.68%, Healthcare up by 0.50%, Capital Goods up by 0.34%, while Metal down by 2.20%, Utilities down by 1.37%, Auto down by 1.10%, Realty down by 1.07%, IT down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 9.69%, ITC up by 1.35%, Dr. Reddy’s Lab up by 1.21%, Sun Pharma up by 1.13% and Axis Bank up by 0.87%. On the flip side, Mahindra & Mahindra down by 1.89%, ONGC down by 1.30%, TCS down by 1.21%, Maruti Suzuki down by 0.99% and Bajaj Auto down by 0.91% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that renewing stalled real estate projects will significantly improve economic sentiment in the country grappling with a second wave of Covid-19. She said this will also boost the portfolios of banks and non-banking financial companies (NBFCs). The Mumbai-based project, which had been stalled for some time, was completed under the Centre’s special liquidity window - Special Window for Affordable & Mid-Income Housing (SWAMIH-I). This is the first residential project completed by SWAMIH, which was created in 2019 to fund stuck affordable housing projects.

She mentioned ‘the government had stepped in to provide funding to the stressed affordable and mid-income housing projects, thereby giving relief to the home buyers who had invested their hard-earned savings. The government believes that once these homes are constructed and completed, a large amount of capital locked up in these projects will be released.’ It will generate employment for construction workers and will provide impetus to allied industries such as steel and cement. Further, it will improve the portfolios of banks and NBFCs and significantly boost the economic sentiment in the nation.

SWAMIH is a category-II alternative investment fund, announced by Finance Minister Sitharaman in September 2019 and approved by the Cabinet in November that year. It is currently the largest real estate private equity team in the country, having scaled up from a two-member team at the time of launch to 37 members now.

The CNX Nifty is currently trading at 14677.75, down by 18.75 points or 0.13% after trading in a range of 14618.80 and 14749.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 9.53%, UPL up by 6.67%, Cipla up by 1.98%, ITC up by 1.40% and Dr. Reddy’s Lab up by 1.05%. On the flip side, Tata Steel down by 2.39%, Hindalco down by 2.33%, Grasim Industries down by 2.01%, Mahindra & Mahindra down by 1.89% and Wipro down by 1.67% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 565.72 points or 2.06% to 28,013.73, Hang Seng jumped 263.03 points or 0.95% to 27,981.70, Taiwan Weighted soared 222.36 points or 1.42% to 15,892.46, KOSPI advanced 28.57 points or 0.92% to 3,150.68 and Shanghai Composite was up by 41.63 points or 1.21% to 3,471.17, while Straits Times fell 4.44 points or 0.14% to 3,118.82.