Published on 19/05/2020 1:06:52 PM | Source: LKP Securities Ltd

Sensex, Nifty Maintain Gains In Moon Deals - LKP Securities

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

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Tracking positive Asian markets, Indian equity benchmarks were maintaining their gains in afternoon deals, on the back of heavy buying at Telecom, Banking and Metal counters. In line with the larger peers, the broader indices were too holding strong gaining momentum. The street overlooked a private report stating that American brokerage Goldman Sachs expects the Indian economy to contract by 5 per cent in FY21, making it the worst performance by the country ever.  The brokerage said the GDP will contract by a mind-boggling 45 per cent in the June quarter as compared to the January-March period on an annualised basis, because of the continuing lockdown which is chilling economic activity, before recovering later.

On the global front, Asian markets were trading in green, despite Japan industrial production declined in March as initially estimated. The final data from the Ministry of Economy, Trade and Industry showed that industrial production fell a seasonally adjusted 3.7 percent month-on-month in March. This was in line with initial estimate. Shipments fell 5.8 percent in March. According to initial estimate, shipments was down 5.0 percent.

The BSE Sensex is currently trading at 30582.14, up by 553.16 points or 1.84% after trading in a range of 30187.77 and 30739.96. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.27%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Telecom up by 7.68%, Bankex up by 2.68%, Metal up by 2.26%, Power up by 2.12% and Oil & Gas up by 2.08%, while there were no losing sectoral indices on the BSE.
The top gainers on the Sensex were Bharti Airtel up by 8.79%, ONGC up by 7.00%, Kotak Mahindra Bank up by 4.47%, Tata Steel up by 4.35% and Ultratech Cement up by 3.87%. On the flip side, Hindustan Unilever down by 0.59%, Nestle down by 0.31% and Asian Paints down by 0.12% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the construction equipment industry, which was already going through a slowdown due to headwinds on several fronts before coronavirus (Covid-19) outbreak, is likely to witness a 15-20 percent fall in revenues in calendar year (CY) 2020, impacted by the extended the ongoing nationwide lockdown. 

The report noted that while construction activity on projects under execution was on, new project awarding activity was muted in the 12 months pre-Covid also. In particular, it said weak road project awards in the past few quarters severely reduced equipment demand prospects, as the single biggest driver for construction equipment demand in the past three years has been the roads sector. It said currently, the rate of awards is far slower than execution, leading to moderation in pipeline. In addition, problems like land acquisition delays, cost escalations and weak contractor liquidity affected demand. 

According to the report, factors like weakened state government finances, diversion of government support to healthcare at the cost of all other capital spends; new structural changes incorporating social distancing in several industries like construction; movement of labour; and the cost of restarting the economy - all these make the construction equipment industry forecast rather uncertain. Moreover, it said unforeseen headwinds in coming months cannot be ruled out.

The CNX Nifty is currently trading at 8986.10, up by 162.85 points or 1.85% after trading in a range of 8866.80 and 9030.35. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 8.94%, ONGC up by 6.93%, JSW Steel up by 5.36%, Adani Ports & SEZ up by 5.01% and Tata Motors up by 4.53%. On the flip side, UPL down by 6.51%, Vedanta down by 1.73%, Hindustan Unilever down by 0.62%, Cipla down by 0.61% and Nestle down by 0.50% were the top losers.

All Asian markets were trading in green; NIKKEI 225 surged 358.59 points or 1.78% to 20,492.32, Straits Times jumped 45.06 points or 1.77% to 2,584.34, Hang Seng soared 436.21 points or 1.82% to 24,370.98, Taiwan Weighted rose 107.23 points or 1.00% to 10,847.78, KOSPI gained 35.51 points or 1.83% 1,972.62, Jakarta Composite added 89.59 points or 1.99% to 4,600.65 and Shanghai Composite was up by 15.14 points or 0.53% to 2,890.56.

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