Sensex, Nifty end 6-day losing streak

Indian equity benchmarks snapped the 6-day losing run, and ended the choppy session up nearly half a per cent on Monday, on the back of gains in Telecom, Realty and Auto counters. Markets made cautious start but soon gained traction, as traders took encouragement with Commerce and Industry Minister Piyush Goyal’s statement that the comprehensive trade agreement between India and the UAE will help in creating huge job opportunities and boost growth of the domestic economy. The bilateral pact is expected to increase the bilateral trade in goods to over $100 billion and trade in services to over $15 billion within five years. Some support also came in as data provided by the Centre for Monitoring Indian Economy (CMIE) showed that in one of the largest expansions in the labour market since the beginning of the pandemic, 8.8 million people joined the country's workforce in April.

However, benchmarks cut most of their initial gains in afternoon session, as some pessimism came with Reserve Bank of India (RBI) data showed that India’s forex reserves declined by $1.774 billion to $595.954 billion for the week ended May 6 on the back of a fall in the core currency assets. Some concern also came as sounding a red alert on India's CPI inflation at an 8-year high print of 7.79% YoY in April, Acuite Ratings has said it may trigger quicker rate hikes. Adding some worries, a private report stated that cryptocurrencies can lead to 'dollarisation' of a part of the economy which would be against India's sovereign interest.

But, key gauges once again entered into green terrain to end higher, as global markets supported the trading sentiment. Some support also came from Retailers Association of India (RAI) in its latest survey stated that retail businesses across India grew 23 per cent in April 2022 in terms of sales as compared to pre-pandemic levels of the same month in 2019 with customers coming back to stores. Besides, the Reserve Bank of India has said that public sector banks reported over 51 per cent dip in the amount involved in frauds to Rs 40,295.25 crore during the financial year ended March 2022.

On the global front, European markets were trading mostly in red as the European Commission cut its growth forecast for the 19 countries sharing the euro to 2.7 percent this year from 4.0 percent predicted in February, citing the impact of the Ukraine war and soaring inflation. GDP growth is expected to slow to 2.3 percent next year, below the 2.7 percent seen before. Data showed earlier in the day that German wholesale price inflation advanced to 23.8 percent in April from 22.6 percent in March. This was the biggest rate since records began in 1962. Asian markets settled mostly higher on Monday as a senior official from the National Bureau of Statistics (NBS) has said China's long-term economic fundamentals remain sound and the continued momentum of economic recovery has not changed. However, traders remained concern about persistent inflation, looming interest rate hikes, Ukraine war and the COVID-19 lockdowns in China.

Back home, insurance industry stocks were in focus as data from IRDAI showed the gross premium income of non-life insurance companies grew nearly 24 per cent to Rs 21,326.58 crore in April. The non-life insurance companies had a gross premium business worth Rs 17,251.10 crore in April 2021. Besides, stocks related to tourism industry were buzzing as Union Tourism and Culture Minister G Kishan Reddy said that the government is working towards a comprehensive national tourism policy to give an impetus to the tourism industry.

Finally, the BSE Sensex rose 180.22 points or 0.34% to 52,973.84 and the CNX Nifty was up by 60.15 points or 0.38% to 15,842.30.  

The BSE Sensex touched high and low of 53,428.28 and 52,632.48, respectively. There were 18 stocks advancing against 12 stocks declining on the index.         

The broader indices ended in green; the BSE Mid cap index rose 1.51%, while Small cap index was up by 1.15%.

The top gaining sectoral indices on the BSE were Telecom up by 2.85%, Realty up by 2.59%, Auto up by 2.20%, Utilities up by 2.17% and Power up by 2.10%, while IT down by 0.58%, TECK down by 0.45% and FMCG down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.05%, Bajaj Finance up by 2.37%, SBI up by 2.27%, Maruti Suzuki up by 2.14% and HDFC up by 1.96%. On the flip side, Ultratech Cement down by 3.01%, Asian Paints down by 2.15%, ITC down by 1.78%, Tech Mahindra down by 1.22% and TCS down by 1.08% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the comprehensive trade agreement between India and the UAE will help in creating huge job opportunities and boost growth of the domestic economy. The bilateral pact is likely to increase the bilateral trade in goods to over $100 billion and trade in services to over $15 billion within five years. It came into effect from May 1. The agreement opens the door for many sectors, particularly labour-intensive ones such as textiles, gems and jewellery, pharmaceuticals and agriculture.

The ministers launched ‘India-UAE Start-up Bridge’ at the India-UAE Partnership Summit. The India UAE Start Up bridge is part of CEPA to strengthen collaboration to promote startups through exchange of best practices, and strengthened relations between accelerators, incubators, and other such ecosystem stakeholders. The bridge will act as a one-stop platform where information regarding the Indian and UAE startup ecosystem will be easily accessible to entrepreneurs and stakeholders from both countries.

He added that the pact would not only open doors for Indian businesses to the UAE but also to other countries as well as UAE is a transit point for large parts of Africa, CIS (Commonwealth of Independent States) countries, and the Gulf region. CIS countries include Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, and Tajikistan. Further, Goyal said Indian pharma products will get immediate access to the UAE market as CEPA has given a pathway for fast-track approval for these products in the UAE.

According to the minister, the framework is expected to add a million jobs in India and provide opportunities to the startup ecosystem in the country and has huge potential for engagement on skill development and education. He noted that there are a large number of startups which have emerged in the last six years, with more than 65,000 registered with the ministry. He added India also has over 100 unicorns with the third largest startup ecosystem in the world.

The CNX Nifty traded in a range of 15,977.95 and 15,739.65. There were 33 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.         

The top gainers on Nifty were Eicher Motors up by 7.95%, Apollo Hospital up by 4.21%, UPL up by 2.82%, NTPC up by 2.81% and SBI up by 2.55%. On the flip side, Ultratech Cement down by 3.01%, Shree Cement down by 2.48%, Asian Paints down by 1.74%, ITC down by 1.64% and Divi's Laboratories down by 1.57% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 14.58 points or 0.23% to 6,348.10 and Germany’s DAX decreased 71.80 points or 0.51% to 13,956.13, while UK’s FTSE 100 increased 5.00 points or 0.07% to 7,423.15.

Asian markets settled mostly higher on Monday tracking strong gains in Wall Street last Friday, despite concerns about elevated inflationary pressures and aggressive monetary policy tightening. Hong Kong shares rose after reports that Shanghai was relaxing some of its lockdown restrictions. Chinese central bank PBoC kept the interest rate of the one-year medium-term lending facility unchanged at 2.85%, while injecting 100 billion yuan of liquidity into the banking system via the MLF. PBOC also maintained the interest rate of the seven-day reverse repurchase agreement at 2.1% while injecting CNY10 billion of funds via the monetary tool, data showed. Further, Japanese shares gained as weaker yen offered some support to exporters. However, Chinese shares slipped after retail sales and industrial production data for April came in far worse than expected. Meanwhile, Malaysia, Indonesia and Singapore markets were closed for Vesak Day holiday.