In a volatile session, Indian equity benchmarks climbed off their respective day’s high levels in the last leg of trade but ended with gains for the third straight day on Thursday, due to the gains in Auto, FMCG and Metal stocks. Key indices made a cautious start but quickly gained traction, as the union cabinet cleared Rs 3 lakh crore micro, small and medium enterprise (MSME) funding scheme to mitigate the economic distress being faced by the small businesses in the light of the COVID-19 pandemic. Buying further crept in as the Trade Promotion Council of India (TPCI) said that with the government taking steps in the agriculture and food sector, industry will be able to achieve export target of $100 billion worth in the next five years by focusing on untapped global markets like Africa, Latin America, Middle East and Oceania.
However, markets erased most of gains in late trade, as domestic rating agency ICRA warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 percent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. The agency also sharply revised downwards the growth contraction in Q1 to 25 percent as against the previous forecast of 16-20 percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously, which implies a recession. But, trade remained in green as some optimism remained among traders with the finance ministry’s monthly report on the macro economy stating that the government is ‘cautiously optimistic’ about the revival of growth later in this fiscal, despite the pandemic-induced lockdown, and the country’s current account may witness a small surplus in the June quarter.
On the global front, Asian markets ended mostly in red, as fears of U.S.-China tensions as well as deteriorating relations between Canberra and Beijing kept investors' risk appetite in check. European markets were trading lower as investors braced for the latest batch of business activity data to underline the blow to the euro zone economy from sweeping lockdown measures imposed to curb the virus spread. Back home, aviation stocks such as IndiGo and SpiceJet ended higher with report that India will resume domestic flights in a calibrated manner from May 25 as passengers follow prevention guidelines for coronavirus. Insurance stocks also were in watch with report that companies across sectors have been struggling to work out ways to cut costs to counter the impact of coronavirus (COVID-19). Life insurance companies for one are hoping to save on costs by reducing branch presence.
Finally, the BSE Sensex gained 114.29 points or 0.37% to 30,932.90, while the CNX Nifty was up by 39.70 points or 0.44% to 9,106.25.
The BSE Sensex touched high and low of 31,188.79 and 30,765.32, respectively and there were 16 stocks advancing against 13 stocks declining on the index.
The broader indices ended in green; the BSE Mid cap index rose 0.76%, while Small cap index was up by 0.72%.
The top gaining sectoral indices on the BSE were Auto up by 2.45%, Consumer Disc up by 2.09%, Metal up by 1.84%, FMCG up by 1.76% and Basic Materials up by 1.22%, while Power down by 1.18%, Capital Goods down by 1.05%, Finance down by 0.74%, Utilities down by 0.71% and Bankex down by 0.71% were the top losing indices on BSE.
The top gainers on the Sensex were ITC up by 7.48%, Asian Paints up by 4.97%, Hero MotoCorp up by 3.93%, Maruti Suzuki up by 3.14% and Bajaj Auto up by 2.57%. On the flip side, Indusind Bank down by 2.91%, NTPC down by 2.74%, Bajaj Finance down by 2.65%, HDFC down by 1.88% and Larsen & Toubro down by 1.75% were the top losers.
Meanwhile, the Reserve Bank of India’s data has showed India's overseas direct investment (ODI) in April 2020 dipped 62 per cent to $976.14 million. The fall in ODI can mainly be attributed to the coronavirus pandemic, which led to a global lockdown and halt in most of the business activities.
The data showed that of the total investment by Indian companies in April 2020-21, $586.42 million was in the form of loans, $230.81 million was equity infusion, while $158.91 million was in the form of issuance of guarantees.
Domestic firms had invested nearly $2.56 billion in their joint ventures/wholly-owned subsidiaries during April 2019. Indian firms had invested $2.70 billion in overseas businesses in March 2020.
The CNX Nifty traded in a range of 9,178.55 and 9,056.10 and there were 30 stocks advancing against 20 stocks declining on the index.
The top gainers on Nifty were ITC up by 7.08%, Hindalco up by 5.79%, Asian Paints up by 5.16%, Hero MotoCorp up by 4.02% and Maruti Suzuki up by 3.06%. On the flip side, Bajaj Finserv down by 3.60%, Bajaj Finance down by 2.90%, NTPC down by 2.85%, Indusind Bank down by 2.74% and Adani Ports &Special down by 2.04% were the top losers.
European markets were trading lower; UK’s FTSE 100 decreased 55.66 points or 0.92% to 6,011.50, France’s CAC fell 40.73 points or 0.91% to 4,456.25 and Germany’s DAX was down by 140.25 points or 1.25% to 11,083.46.
Asian markets ended mostly lower on Thursday as worries of Sino-US tensions kept investors' risk appetite in check. Chinese shares ended lower ahead of the country's postponed annual session of its parliament starting the next day, and after reports that US regulators are open to making changes to close a possible loophole in a new rule aimed at curbing global chip sales to Chinese firm Huawei Technologies. Further, Japanese shares ended lower, despite optimism about a state of emergency being lifted in western Japan later today. Meanwhile, investors also digested a slew of weak economic data. The manufacturing sector in Japan continued to contract in May, and at a faster pace, the latest survey from Jibun Bank revealed with a manufacturing PMI score of 31.7, down from 34.7 in April. The report also showed that the services PMI improved to 25.3 in May, up from the record low 21.5 in April but still well below the line for expansion. In April, exports declined by more than 21.9% while imports declined by more than 7.2%.
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