Post Session: Quick Review

Indian equity benchmarks ended with strong gains on Thursday. After a positive start, indices remained higher for the whole day, as fall in daily coronavirus cases aided the sentiments in markets. Fresh infections continued to fall as it has been seven days since cases have not breached 200,000-mark. India reported 134,105 fresh Covid-19 infections, taking the caseload to 28,440,988. Also, the Union health ministry said India has achieved a significant milestone as the cumulative Covid-19 vaccination coverage has crossed the 22 crore-mark. Some support came in as Minister of State for Finance Anurag Thakur said the Indian economy is resilient, and will rebound based on reforms that have ensured strong fundamentals.  However, some gains got trimmed over the Dalal street during afternoon deals, after India's services sector activities slumped into contraction territory for the first time in eight months, amid renewed decline in new work intakes due to the escalation of the pandemic and the reintroduction of restrictions. The seasonally adjusted India Services Business Activity Index fell to 46.4 in May, down from 54.0 in April, as the intensification of the COVID-19 crisis caused renewed declines in new business and output.

In the last hours of the trade, key indices again added gains to end near their intraday high points, as sentiments remained positive with Credit ratings agency Crisil in its latest report stating that the expanded Emergency Credit Line Guarantee Scheme (ECLGS) will help businesses like hotels, civil aviation and tour operators, which are the hardest hit by the second wave of COVID-19. It will also support build-up of healthcare infrastructure, mainly oxygen availability, in tier-2 and beyond cities and the hinterland. Traders took a note of Assocham’s report in which it has recommended the government to extend relief measures such as regulatory easing, wage support, and interest subsidy for the Micro Small and Medium Enterprises (MSMEs) which are reeling under the severe impact of COVID-19.  As the states are in the process of easing lockdowns, it said the trade and industry would need all-around support to pick up their business thread again.

On the global front, European markets were trading lower, as investors awaited U.S. economic data to gauge the future path of monetary policy, while rating actions and ex-dividend trading knocked UK shares lower. Asian markets ended mostly higher on Thursday, after the private sector in Singapore continued to expand in May, and at a faster pace, the latest survey from Markit Economics showed on Thursday with a services PMI score of 54.4. That's up from 51.8 in April and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Both manufacturing and services registered stronger performances in May, but the construction sector saw a sharp downturn. The finance and insurance sub-sector registered another rapid rate of expansion in activity.

The BSE Sensex ended at 52232.43, up by 382.95 points or 0.74% after trading in a range of 51942.20 and 52273.23. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.04%, while Small cap index was up by 1.04%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 4.44%, Realty up by 3.95%, Capital Goods up by 1.46%, Industrials up by 1.43% and Consumer Disc up by 1.38%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Titan Co up by 6.69%, ONGC up by 4.16%, Larsen & Toubro up by 2.64%, Axis Bank up by 1.82% and Kotak Mahindra Bank up by 1.80%. On the flip side, Indusind Bank down by 2.15%, Power Grid down by 0.68%, Mahindra & Mahindra down by 0.51%, Bajaj Auto down by 0.51% and Dr. Reddy’s Lab down by 0.50% were the top losers. (Provisional)

Meanwhile, India’s service sector fell into contraction territory in the month of May, with the intensification of the COVID-19 crisis causing renewed declines in new business and output. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 46.4 in May from 54.0 in April. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also eased to 48.1 in May from 55.4 in April.

The report said that growth of new work intakes ground to a halt in May, with companies noting the first decline in sales since September 2020. Survey participants indicated that demand was dampened by the intensification of the COVID-19 crisis. International demand for Indian services also worsened, with new export business falling at the quickest rate in six months. The drop was attributed to international travel restrictions and business closures.

Besides, pandemic-related worries and falling sales led services companies to reduce workforce numbers again during May. The decline was modest, but the quickest in the current six-month sequence of job shedding. Further, amid reports of higher prices for a wide range of inputs and fuel, operating expenses at services firms continued to increase in May. The rate of inflation remained sharp and above its long-run average, despite slowing to the weakest since January.

The CNX Nifty ended at 15690.35, up by 114.15 points or 0.73% after trading in a range of 15611.00 and 15705.10. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Titan Co up by 6.65%, ONGC up by 4.03%, Eicher Motors up by 3.36%, Larsen & Toubro up by 2.71% and Axis Bank up by 1.85%. On the flip side, Indusind Bank down by 2.16%, Wipro down by 0.73%, Cipla down by 0.68%, Dr. Reddy’s Lab down by 0.56% and Mahindra & Mahindra down by 0.51% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 48.02 points or 0.68% to 7,059.98, France’s CAC decreased 4.86 points or 0.07% to 6,516.66 and Germany’s DAX was down by19.27 points or 0.12% to 15,583.44.

Asian markets ended mostly higher on Thursday, even as investors are cautious ahead of the monthly US jobs report due on Friday that could offer cues on the US economic recovery and near-term Federal Reserve policy action. Meanwhile, the Fed's Beige Book survey showed that the US economic growth increased at a ‘moderate pace’ from early April to late May, and the overall price pressure further increased. Japanese shares ended higher, boosted up by optimism over the nation's vaccine rollout. However, Chinese shares dropped after a private survey showed that Chinese services activity growth slowed in May. The Caixin/ Markit services Purchasing Managers’ Index for May came in at 55.1, down from 56.3 in April.