Benchmarks extend gains in morning session

Indian equity benchmarks extended gains in morning session with frontline gauges surpassing their crucial 49,190 (Sensex) and 14,800 (Nifty) levels, on the back of strong gains in heavyweights such as Indusind Bank, SBI, Bajaj Finserv and ICICI Bank. Sentiments got a boost with the India Meteorological Department (IMD) stating that the southwest monsoon is likely to arrive over Kerala on May 31, a day earlier than its normal onset date. The normal onset date of the monsoon over Kerala is June 1. Some encouragement also came with the government data showing that India's exports in April jumped nearly three-fold to $30.63 billion from $10.36 billion in the same month last year. Imports too rose to $45.72 billion last month as against $17.12 billion in April 2020. Meanwhile, in order to ensure timely support to depositors of stressed banks, the government may bring an amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover.

On the global front, Asian markets were trading mostly in red as optimism about the global recovery was offset by concerns about a spike in new infections in several countries that have officials battling to avert new lockdowns. Back home, on the sectoral front, Pharma industry’s stocks were in focus with Commerce and Industry Minister Piyush Goyal’s statement that the pharma industry, especially oxygen producers, will be given priority to resume operations once the severe cyclonic storm subsides.

The BSE Sensex is currently trading at 49195.86, up by 463.31 points or 0.95% after trading in a range of 48923.13 and 49256.52. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.97%, while Small cap index was up by 1.10%.

The top gaining sectoral indices on the BSE were Bankex up by 2.26%, Realty up by 1.44%, Power up by 1.13%, Auto up by 1.10% and PSU up by 0.93%, while Telecom down by 0.92%, Consumer Durables down by 0.74% and Metal down by 0.69% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.84%, SBI up by 3.25%, Bajaj Finserv up by 3.15%, ICICI Bank up by 2.65% and Kotak Mahindra Bank up by 2.03%. On the flip side, Larsen & Toubro down by 1.57%, Bharti Airtel down by 1.17%, Titan Company down by 0.85%, Sun Pharma down by 0.72% and NTPC down by 0.49% were the top losers.

Meanwhile, in order to ensure timely support to depositors of stressed banks, the government may bring an amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover.

Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to providing support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank too came under stress leading to restructuring by the regulator and the government.

The amendment to the DICGC Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet. Once the Bill becomes law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks. As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and the liquidation process starts.

The CNX Nifty is currently trading at 14,812.95, up by 135.15 points or 0.92% after trading in a range of 14725.35 and 14824.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were UPL up by 5.00%, Indusind Bank up by 4.00%, Bajaj Finserv up by 3.37%, SBI up by 3.22% and Adani Ports &SEZ up by 2.86%. On the flip side, Cipla down by 2.81%, Tata Steel down by 1.82%, Larsen & Toubro down by 1.38%, Bharti Airtel down by 1.28% and SBI Life Insurance down by 1.19% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 469.19 points or 2.96% to 15,357.90, Nikkei 225 slipped 254.46 points or 0.91% to 27,830.01, Jakarta Composite lost 75.07 points or 1.26% to 5,863.28 and KOSPI fell 15.63 points or 0.5% to 3,137.69. On the flip side, Straits Times advanced 6.13 points or 0.2% to 3,061.15, Shanghai Composite gained 35.71 points or 1.02% to 3,526.09 and Hang Seng increased 109.52 points or 0.39% to 28,137.09.