Key indices add some gains in morning deals

Indian equity benchmarks added some gains in morning deals tracking gains in index heavyweights Power Grid Corporation, NTPC and Larsen & Toubro. Sentiments remained positive with NITI Aayog Vice-Chairman -- Rajiv Kumar stating that 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 the recovery will start from June itself and will get pace from July. He is hopeful that pandemic will not have much impact on fiscal deficit and disinvestment targets. Some support also came with Labour Minister Santosh Gangwar’s statement that India is committed to making all possible efforts to counter the impact of the pandemic and emerge stronger. He also said governments are required to deal with the pandemic and provide an effective response at policy levels, to balance business continuity, income security and above everything, the well-being of all. However, gains remain capped with new survey by the Reserve Bank of India (RBI) showing that consumer confidence has dipped to a new low as the second wave of Covid-19 pandemic continues to take a toll on lives and businesses across the country. The current perception compared with one-year ago fell to a record 48.5 in May from 53.1 in March, shows the survey where 100 is the level that divides pessimism from optimism. 

On the global front, Asian markets were trading mostly in red as relief over the benign U.S. jobs report was chilled by caution ahead of key inflation data later this week, while a coronavirus outbreak in Taiwan took an increasing toll on hard-pressed chip makers. Back home, on the sectoral front, MSME stocks were buzzing as Union minister Nitin Gadkari stressed on increasing the share of the MSME sector in the country's GDP to 40 per cent from 30 per cent currently. Gadkari said the world is now favouring India instead of China.

The BSE Sensex is currently trading at 52213.72, up by 113.67 points or 0.22% after trading in a range of 52054.76 and 52279.55. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose0.79%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were Utilities up by 2.70%, Power up by 2.32%, Telecom up by 1.73%, PSU up by 1.40% and Capital Goods up by 1.31%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.70%, NTPC up by 2.50%, Larsen & Toubro up by 1.72%, ITC up by 1.44% and Bharti Airtel up by 1.30%. On the flip side, Bajaj Finance down by 4.57%, Bajaj Finserv down by 3.08%, HDFC down by 0.85%, Dr. Reddys Lab down by 0.25% and Infosys down by 0.25% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that banks and non-banking financial companies (NBFCs) need to strengthen their capital position because there could be stress due to the second wave of COVID-19. He, however, added that in response to the RBI's call and based on their own assessment, private and public sector banks raised capital from the market throughout last year and so their overall capital position is at a very stable level currently. He said 'they are all hitting our regulatory requirements. Some of them are even much higher.'

RBI Governor also said he was confident that the non-performing loans of banks will be within the projections made in its Financial Stability Report (FSR) in January 2021. He noted that the FSR in January had projected the banks' gross non-performing assets (GNPAs) rising to 13.5 percent by September 2021, under a baseline stress scenario. He added that and if the macroeconomic environment worsens to a severe stress scenario, the GNPA ratio may escalate to 14.8 percent.

Asked whether the NPAs would remain within the range indicated in the FSR, Das said ‘our expectation is that whatever projection we have given earlier in the last FSR, it will be within that.’ The next FSR is due at the end of the current month. The RBI on June 4, 2021 left the repo rate unchanged at 4 percent and maintained an accommodative stance to revive and sustain growth on a durable basis.

The CNX Nifty is currently trading at 15720.50, up by 50.25 points or 0.32% after trading in a range of 15678.10 and 15729.70. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.14%, Tata Motors up by 3.03%, Adani Ports &Special up by 2.91%, NTPC up by 2.68% and Power Grid Corporation up by 2.68%. On the flip side, Bajaj Finance down by 4.55%, Bajaj Finserv down by 3.18%, HDFC down by 0.80%, HDFC Life Insurance down by 0.68% and Cipla down by 0.31% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 surged 102.08 points or 0.35% to 29,043.60, Straits Times advanced 27.17 points or 0.86% to 3,178.21, KOSPI rose 16.11 points or 0.5% to 3,256.19 and Jakarta Composite soared 1.24 points or 0.02% to 6,066.41.

On the flip side, Shanghai Composite declined 7.66 points or 0.21% to 3,584.18, Taiwan Weighted dropped 13.45 points or 0.08% to 17,133.96 and Hang Seng decreased 222.92 points or 0.77% to 28,695.18.