Benchmarks trade higher in early deals; IT stocks shine

Indian equity benchmarks made optimistic start on Thursday despite mixed global cues and ahead of expiry of the monthly futures & options (F&O) contracts scheduled for later in the day.  Markets are trading higher with notable gains in early deals on account of sustained buying in IT, TECK and Metal counters. Sentiments got a boost with data released by the Department for Promotion of Industry and Internal Trade (DPIIT) showing that India had attracted a total foreign direct investments (FDI) inflow of $6.24 billion in April, up by 38 per cent year-on-year. Meanwhile, India has recorded 54,319 cases in the last 24 hours, taking the country's total coronavirus caseload to 30,082,169. India also recorded a spike in new deaths with 978 fatalities being reported yesterday. The death toll now stands at 392,014.

On the global front, most of the Asian markets were trading higher following the mixed cues overnight from Wall Street amidst a lack of strong catalysts. Investors seem reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following recent volatility. Back home, the real estate industry stocks were in limelight with a private report that the housing sales during the April-June 2021 period stood at around 24,570 units across the top 7 cities, increasing by 93 percent annually but dropping by 58 percent QoQ. In scrip specific development, Reliance Industries remained in focus ahead of its annual general meeting.

The BSE Sensex is currently trading at 52583.09, up by 277.01 points or 0.53% after trading in a range of 52385.05 and 52590.92. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index added 0.02%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were IT up by 1.06%, TECK up by 0.97%, Metal up by 0.84%, Capital Goods up by 0.74%, Bankex up by 0.70%, while Power down by 1.06%, Utilities down by 0.86%, Oil & Gas down by 0.58%, Energy down by 0.25%, Consumer Durables down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.52%, TCS up by 1.38%, Infosys up by 1.26%, ICICI Bank up by 1.07% and Tata Steel up by 1.05%. On the flip side, Titan Company down by 0.47%, Power Grid down by 0.30%, NTPC down by 0.21%, Dr. Reddy’s Lab down by 0.16% and Bajaj Auto down by 0.15% were the top losers.

Meanwhile, ratings agency Crisil has said the tours and travel industry, which was beginning to recover before the second wave of Covid-19 infections began, will now see revenue this fiscal reaching only 35%-40% of the pre-pandemic levels. While companies have raised capital last fiscal and will continue with cost-control measures to cut cash losses, a significant decline in travel, and continued uncertainty about the pandemic will weigh negatively on their credit profiles.

This is as per Crisil's study of three sector majors that account for over half of the domestic tours and travel industry, with a reported revenue of Rs 11,300 crore in fiscal 2020. Tours and travel operators provide services such as air/bus ticketing, hotels/packages for both leisure and corporate travel within India and overseas. These companies saw their revenues plunge to Rs 2,300 crore last fiscal, which was only 20% of fiscal 2020 levels, after the nationwide lockdown and other restrictions led to a sharp reduction in travel.

The industry was brought to a standstill in the first quarter of last fiscal -- the peak travel season because of summer holidays -- which eroded revenue 95% on-year. However, fortunes started to mend gradually thereafter, with improving air traffic and demand for short domestic holidays lifting revenue to 55% of the pre-pandemic level by the fourth quarter. Then the second wave set in. Under its impact, the first quarter of this fiscal is expected to be almost a washout once again, this time because of state-level lockdowns.

The CNX Nifty is currently trading at 15744.60, up by 57.65 points or 0.37% after trading in a range of 15702.70 and 15762.75. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 1.34%, Infosys up by 1.23%, TCS up by 1.17%, JSW Steel up by 0.98% and Tata Steel up by 0.95%. On the flip side, Adani Ports & SEZ down by 0.72%, Cipla down by 0.62%, Titan Company down by 0.59%, Eicher Motors down by 0.57% and Power Grid down by 0.43% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 rose 4.92 points or 0.02% to 28,879.81, Straits Times increased 7.01 points or 0.22% to 3,125.63, Hang Seng added 11.76 points or 0.04% to 28,828.83, Taiwan Weighted surged 38.41 points or 0.22% to 17,375.12 and KOSPI gained 10.78 points or 0.33% to 3,286.97. On the other hand, Jakarta Composite fell 13.81 points or 0.23% to 6,020.73 and Shanghai Composite was down by 5.21 points or 0.15% to 3,561.01.