Markets trade flat with positive bias in early deals

Indian equity benchmarks made positive start on Monday amid optimism over the unlocking of the economy. But, mixed global cues weighted down on the domestic markets which dragged the markets down. Domestic indices are trading flat with positive bias in early deals on account of buying in Utilities, Metal and Power counters. The rapid fall in fresh Covid-19 infection cases supported the markets. With a little over 100,000 new infections across India in the past 24 hours, daily cases in the country have dropped to the lowest level seen in over two months, marking a decline in the brutal second wave of Covid-19. India reported 101,232 new infections. Among major Indian states, Delhi, Tamil Nadu, Uttar Pradesh, Maharashtra and Gujarat have announced the partial lifting of restrictions from today. Adding more optimism, GST tax collections remained above Rs 1 lakh crore mark for the eighth straight month in May, indicating that the impact of the devastating second wave of Covid infections on the economy may have been limited. though, some cautiousness came in as the Reserve Bank of India’s (RBI’s) May round of survey showed consumer confidence has fallen to an all-time low as consumer perceptions on the general economic and employment situations have lowered further.

On the global front, Asian markets were trading mixed following the broadly positive cues from Wall Street on Friday as weak jobs data eased inflation concerns and prospects of additional fiscal stimulus, while COVID-19 infection concerns in several markets in the region kept the underlying mood cautious. Back home, banking stocks were in focus as RBI data showed bank credit grew by 5.98 percent to Rs 108.33 lakh crore while deposits rose by 9.66 percent to Rs 151.67 lakh crore in the fortnight ended May 21, 2021. In scrip specific development, Dewan Housing Finance Corporation (DHFL) traded higher on reporting a consolidated net profit of Rs 96.75 crore for the January-March quarter. During the same quarter of FY2019-20, the bankrupt NBFC had posted a consolidated net loss of Rs 7,507.01 crore.

The BSE Sensex is currently trading at 52119.63, up by 19.58 points or 0.04% after trading in a range of 52062.71 and 52279.55. 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 0.77%, while Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were Utilities up by 1.95%, Metal up by 1.64%, Power up by 1.59%, Basic Materials up by 1.20%, Telecom up by 1.08%, while there was no loser on BSE sectoral front.

The top gainers on the Sensex were NTPC up by 1.83%, Power Grid up by 1.75%, ITC up by 1.41%, Larsen & Toubro up by 1.26% and Ultratech Cement up by 1.21%. On the flip side, Bajaj Finance down by 4.66%, Bajaj Finserv down by 3.26%, HDFC down by 1.09%, Asian Paints down by 0.34% and HDFC Bank down by 0.04% were the top losers.

Meanwhile, after the second wave of Covid-19 pandemic had hit the country hard, which led the Reserve Bank of India (RBI) reduce its Gross Domestic Product (GDP) growth projection by 1 per cent in the current financial year (FY22), NITI Aayog Vice-Chairman -- Rajiv Kumar has said he is confident that every organisation will revise their growth projections to 10-10.5 per cent once they witness the growth rate by October. He said everyone will revise their growth projections once Indian economy will start recovering. The recovery will start from June itself and will get pace from July. He said ‘RBI has cuts GDP growth forecast for the financial year 2021-22 to 9.5 per cent from 10.5 per cent due to impact of the second wave, which is going to impact our economy in the first quarter. The economy will recover below than expected in the first quarter. Our economy will grow at a pace of 10 per cent-10.5 per cent in the financial year 2021-22.’

He is hopeful that pandemic will not have much impact on fiscal deficit and disinvestment targets. Further he mentioned ‘Covid-19 has forced the government to invest more, spend more on public infrastructure, but it will not have much impact as we have seen our GST collection has increased. In the budget also our revenue target were kept very conservative. So I think we will not have to worry much about our fiscal deficit target. If we see the data of the International Monetary Fund (IMF) which stated that fiscal deficit target globally is on an average of around 9.8 per cent. Our fiscal deficit is not more than others. I am confident that we will achieve our disinvestment target.’

Talking about the possibility of a third wave after a disastrous second wave created havoc in the country, Kumar said hope for the best, prepare for the worst. He stated ‘We are fully prepared for the third wave. Our health infrastructure is much better than earlier. If by any chance a third wave strikes, it will not impact as much as I have seen. People are not careless now. They are taking full precautions and are getting vaccinated also. Thus, I believe that a third wave will not make much impact.’

The CNX Nifty is currently trading at 15704.80, up by 34.55 points or 0.22% after trading in a range of 15678.10 and 15728.20. There were 43 stocks advancing against 6 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Coal India up by 3.33%, Tata Motors up by 2.46%, Tata Consumer Products up by 2.39%, Tata Steel up by 2.39% and Power Grid up by 2.06%. On the flip side, Bajaj Finance down by 4.50%, Bajaj Finserv down by 3.43%, HDFC down by 0.99%, HDFC Life Insurance down by 0.62% and Asian Paints down by 0.17% were the top losers.

Asian markets were trading mixed; Hang Seng declined 229.94 points or 0.80% to 28,688.16, Taiwan Weighted lost 26.29 points or 0.15% to 17,121.12, Jakarta Composite fell 3.07 points or 0.05% to 6,062.10 and Shanghai Composite was down by 7.66 points or 0.21% to 3,584.18. However, Nikkei 225 rose 96.83 points or 0.33% to 29,038.35, Straits Times gained 26.02 points or 0.83% to 3,177.06 and KOSPI added 4.25 points or 0.13% to 3,244.33.