Published on 25/03/2020 5:04:06 PM | Source: LKP Securities

Markets Extend Gains For Second Straight Session - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

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Indian equity benchmarks ended Wednesday’s trade on high note that marked a second straight day of gain for the markets, tracking bullish trend from global key indices as authorities world over stepped up efforts to fight the pandemic. Sensex ended above 28,500 Mark, while Nifty reclaimed 8,300 Mark. Key indices witnessed a fluctuating trade in the morning session, as Prime Minister Narendra Modi announced a complete lockdown of the country for 21 days to curb the spread of the deadly coronavirus pandemic that will have a bearing on businesses across the country. However, markets changed their gear in afternoon session and gained steadily, taking support Finance Minister Nirmala Sitharaman’s statement where she extended the deadline for filing tax returns by three months beyond March 31. She also announced a slew of regulatory and compliance measures across sectors to alleviate the hardships being faced by various businesses.

Markets continued their strong bullish momentum in late trade, as Securities and Exchange Board of India (SEBI) in its latest data showed that investments through participatory notes (P-notes) in the domestic capital market rose to Rs 68,862 crore at the end of February 2020, making it the second consecutive monthly increase. Domestic sentiments were also buoyed with Union Food Minister Ram Vilas Paswan’s statement that the government is monitoring the availability of essential commodities in the market amid nationwide lockdown for next 21 days to check the spread of coronavirus outbreak. He also warned manufacturers and traders against profiteering during this period.

On the global front, Asian markets ended higher on Wednesday, while European markets were trading in green, as investors bet on unprecedented stimulus measures to ease the economic pain on businesses and households from the coronavirus pandemic. Back home, Aviation stocks were in focus, as airlines have sought help from the government to help them pay employees’ salaries as the coronavirus disease (COVID-19) outbreak has forced the authorities to stop air transport till March 31.  Stocks related to construction sector also were in watch as Credit rating agency, Ind-Ra in its latest report said that COVID-19 outbreak is likely to impact the revenue growth of construction companies in the near term, as the lockdown imposed by the state governments of some of the large Indian cities would obstruct the execution of infrastructure construction in them.

Finally, the BSE Sensex gained 1861.75 points or 6.98% to 28,535.78, while the CNX Nifty was up by 516.80 points or 6.62% to 8317.85.  

The BSE Sensex touched high and low of 28,790.19 and 26,359.91, respectively and there were 25 stocks advancing against 05 stocks declining on the index.    

The broader indices ended in green; the BSE Mid cap index rose 3.53%, while Small cap index was up by 2.84%.

The gaining sectoral indices on the BSE were Energy up by 10.19%, Bankex up by 8.62%, Consumer Durables up by 6.00%, Telecom up by 5.71%, Capital Goods up by 5.67%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Reliance Industries up by 14.65%, Kotak Mahindra Bank up by 12.65%, Maruti Suzuki up by 12.23%, HDFC Bank up by 11.77% and HDFC up by 9.44%. On the flip side, Indusind Bank down by 3.57%, ONGC down by 1.60%, ITC down by 1.41% and Bajaj Auto down by 0.55% were the top losers.

Meanwhile, Securities and Exchange Board of India (SEBI) in its latest data has showed that investments through participatory notes (P-notes) in the domestic capital market rose to Rs 68,862 crore at the end of February 2020, making it the second consecutive monthly increase. The investment comes at a time when broader market witnessed significant downtrend amid fears of recession due to the coronavirus outbreak.

The value of P-note investments in Indian markets -- equity, debt, hybrid securities and derivatives -- stood at Rs 68,862 crore until February, while the same was at Rs 67,281 crore at the end of January. Of the total Rs 68,862 crore, Rs 53,902 crore was invested in equities, Rs 14,739 crore in debt, Rs 144 crore in the derivatives segment and Rs 77 crore in hybrid securities. Investment in January had increased after hitting a nearly 11-year low at the end of December 2019, when the total value of P-note investments in Indian markets stood at Rs 64,537 crore.

The fund inflow through P-notes in December 2019 was the lowest since February 2009, when the cumulative value of such investments stood at Rs 60,948 crore. This lower quantum of investment through P-notes route could be attributed to liberalised norms for foreign portfolio investors (FPIs) by SEBI. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

The CNX Nifty traded in a range of 8,376.75 and 7,714.75 and there were 38 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 13.84%, HDFC Bank up by 12.41%, Kotak Mahindra Bank up by 11.89%, UPL up by 11.43% and Maruti Suzuki India up by 10.56%. On the flip side, Indusind Bank down by 3.33%, Indian Oil Corporation down by 3.07%, Coal India down by 2.82%, Wipro down by 2.18% and GAIL (India) down by 2.09% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 219.17 points or 4.02% to 5,665.18, France’s CAC rose 187.02 points or 4.41% to 4,429.72 and Germany’s DAX was up by 384.80 points or 3.97% to 10,085.37.

Asian markets ended higher on Wednesday, with Japan's Nikkei 225 jumping by 8.04%, after US senators and Trump administration officials reached a deal on a massive economic stimulus package worth about $2 trillion to rescue the American economy from the assault of the corona virus pandemic. While, the Group of Seven (G7) finance ministers and central bank governors said they will continue to expand fiscal and monetary actions for as long as necessary to restore economic growth in the face of the pandemic. Chinese shares ended higher after mainland China reported a drop in new confirmed corona virus cases as imported infections fell and no locally transmitted infections were reported, including in central Hubei province, the epicentre of the outbreak in China. More than one fifth of American companies in China are back to normal operations after widespread disruptions caused by the corona virus epidemic. Japanese shares posted strong gains as aggressive buying from the Bank of Japan and pension money this week. The Indonesian market was closed for a public holiday.


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