Markets continue to trade in high spirit

Indian equity benchmarks continued to trade in high spirit in afternoon session, on account of broad based buying in blue chip counters amid positive Asian cues. Robust fourth quarter of 2020-21 earnings and favourable commentaries from companies' managements aided to lift sentiments. Additional support came as CII stated that the healthy flow of foreign direct investments (FDI) into the country corroborates India’s status as a preferred investment destination among global investors. FDI into the country grew 19 per cent to $59.64 billion during 2020-21. Meanwhile, foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 959.77 crore on May 25. On the global front, Asian markets were trading mostly higher as inflation worries ease, while vaccine and reopening optimism reinforce expectations for a strong global recovery.

The BSE Sensex is currently trading at 50988.46, up by 350.93 points or 0.69% after trading in a range of 50620.45 and 50998.69. 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 0.31%, while Small cap index was up by 0.91%.

The top gaining sectoral indices on the BSE were Realty up by 1.92%, IT up by 1.39%, TECK up by 1.31%, Consumer Discretionary up by 0.85% and Industrials was up by 0.80%, while Metal down by 1.79%, Power down by 1.04%, Utilities down by 0.84% and Basic Materials was down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.95%, Bajaj Finance up by 2.11%, Infosys up by 1.87%, Titan Company up by 1.64% and Tech Mahindra was up by 1.51%. On the flip side, Power Grid down by 2.06%, Nestle down by 0.59%, ONGC down by 0.57%, Dr. Reddys Lab down by 0.22% and HCL Tech was down by 0.09% were the top losers.

Meanwhile, with the world's worst outbreak of COVID pandemic stalling a nascent economic recovery, the government has begun assessing the impact of the second wave of COVID-19 infections on different sectors and may look at providing support at an appropriate time to segments requiring fiscal help. Some of the economic indicators, including the Goods and Services Tax (GST) collections, still provide confidence and incoming data will throw some more light on the state of the economy.

Services sectors like hospitality, tourism and aviation which had just started recovering were hit hard by the second wave of COVID, and these segments might need some support on an urgent basis from the government. Besides, MSME sector, the second highest employer after agriculture, has been impacted very much and would require financial assistance. The government might tweak the existing Emergency Credit Line Guarantee Scheme to provide immediate help to the sector.

Currently, around 6.5 crore Micro, Small and Medium Enterprises (MSMEs) contribute 30 per cent of the GDP. Recently, the RBI also announced a loan restructuring scheme for small borrowers amid the pandemic. However, fiscal stimulus would be effective only once local lockdowns ease and restrictions on business due to curfews are lifted.

The CNX Nifty is currently trading at 15293.55, up by 85.10 points or 0.56% after trading in a range of 15194.95 and 15304.75. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.95%, Bajaj Finance up by 2.29%, Grasim Industries up by 2.21%, Infosys up by 1.85% and Titan Company was up by 1.81%. On the flip side, Tata Steel down by 2.37%, JSW Steel down by 2.30%, Power Grid down by 2.10%, Hindalco down by 1.35% and Britannia Industries was down by 0.57% were the top losers.

Asian markets were trading mostly higher; Shanghai Composite gained 12.84 points or 0.36% to 3,594.18, Taiwan Weighted strengthened 48.02 points or 0.29% to 16,643.69, Nikkei 225 surged 88.21 points or 0.31% to 28,642.19 and Hang Seng was up by 210.50 points or 0.73% to 29,121.36.

On the flip side; KOSPI was down by 2.89 points or 0.09% to 3,168.43.