Below is the View On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
“Indian equity markets recorded gains for the fourth straight session, led by Financials, Metals and Auto. The domestic sentiments were buoyant as the government began the process of unlocking the economy. Nifty50 rallied 246 points (+2.6%) to close at 9826 levels while Sensex rallied 879 points to close at 33,304 level (+2.7%). The broader market outperformed the benchmark with Nifty Midcap 100/Nifty Smallcap 100 up 3.1%/3.2%. All the sectors ended in green with PSU Banks recording the maximum gain of 7.6%. Except IT, FMCG and Pharma, all the sectors gained more than 3%.
Investors ignored the weak GDP data for the March quarter as well as muted factory activity for the month of May and cheered phased out opening of economy. 'Unlock-1' will be initiated in India from June 8 under which the nationwide lockdown effectuated on March 25 will be relaxed to a great extent, including the opening of shopping malls, restaurants and religious places. Investors ignored the weak GDP data for the March quarter as well as muted factory activity for the month of May. Global cues were also positive today as investors shrugged off political unrest in the U.S. and worries about a second wave of the coronavirus. Positive sentiments were also supported after US President Donald Trump avoided reigniting a trade war with China amidst tension over Hong Kong and Chinese PMI data showed fresh signs of economic recovery. Further President Donald Trump avoided reigniting a trade war with China amid tension over Hong Kong which further lifted the sentiments.
Positive global cues, expectations of economic activity coming back to normal and forecast of a normal monsoon lifted investor sentiment. As per IMD, India is likely to receive 102% rainfall of a long-term average this year, thus raising expectations for higher farm output in India, which is struggling with Covid’s impact. Further, the Union Cabinet today cleared equity infusion for MSMEs through a Fund of Funds, and a subordinate debt scheme, among other decisions. It also hiked the MSP for 14 kharif crops by 50-83% over cost and extended the deadline for farmers to repay loans till 31 August. Thus given these positive global and domestic cues, the markets may continue its positive momentum for next couple of days.”
Above views are of the author and not of the website kindly read disclaimer