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Indices pare some gains in noon trade

Markets pared some initial gains but continued to trade in green in afternoon session amid buying in blue chip stocks from across various sectors. Buying in utilities, power and basic materials stocks helped markets to trade higher. Traders were taking support with government data showing that the country's exports jumped by 60.29 per cent to $34.45 billion in March even as the outbound shipments contracted by 7.26 per cent during the full 2020-21 fiscal to $290.63 billion. Imports too grew by 53.74 per cent to $48.38 billion in March, but dipped by 18 per cent to $389.18 billion during April-March 2020-21. However, markets trimmed some of its gains with report that record single-day rise of 2,17,353 new coronavirus infections took India's total tally of COVID-19 cases to 1,42,91,917, while active cases surpassed the 15-lakh mark, according to the Union Health Ministry data updated on Friday. Meanwhile, India Meteorological Department (IMD) forecasts that India will probably experience normal monsoon rainfall this year as La Nina or El Nino weather conditions, which impact rain patterns, are likely to be absent.

On the global front, Asian markets were trading firm amid strong U.S. and Chinese economic data cemented expectations of a solid global recovery from the coronavirus-induced slump. Back home, the overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1747:977; while 142 shares remained unchanged.

The BSE Sensex is currently trading at 48868.03, up by 64.35 points or 0.13% after trading in a range of 48694.49 and 49068.90. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.24%, while Small cap index was up by 1.24%.

The top gaining sectoral indices on the BSE were Utilities up by 1.67%, Power up by 1.66%, Basic Materials up by 1.65%, Auto up by 1.59% and Metal was up by 1.58%, while Bankex down by 0.31% was the only losing index on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.96%, Mahindra & Mahindra up by 2.83%, Asian Paints up by 2.77%, Power Grid up by 2.65% and HCL Tech was up by 2.02%. On the flip side, ICICI Bank down by 1.39%, Bajaj Finance down by 0.95%, TCS down by 0.76%, Hindustan Unilever down by 0.57% and Axis Bank was down by 0.52% were the top losers.

Meanwhile, CRISIL Ratings has said that lower domestic air traffic compared with pre-pandemic level coupled with high fuel prices and only a gradual recovery in international operations may lead to domestic airlines posting around Rs 9,500-10,000 crore losses this fiscal. However, these losses will still be 35-40 per cent lower compared to Rs 14,000-15,000 crore estimated losses in the previous financial year. It said the indicative losses are based on a study of the top three airlines, which account for around 78 per cent of total passenger traffic.

It said a 25-30 per cent increase in debt (excluding lease liabilities) last fiscal and continuing net losses in the current fiscal will keep their balance sheets under pressure, added that high leverage will also result in continued negative outlook for the sector. Noting that a resurgence of Covid-19 infections across the country, especially in Mumbai and Delhi, which account for 36 per cent of the overall air traffic, is expected to stall the recovery seen over the past six months, it said, the average daily domestic passenger air traffic has fallen in April by almost 20 per cent to around 2.35 lakh compared to February this year.

Domestic traffic, which accounts for around 75 per cent of airline revenues, is expected to surge 120-130 per cent this fiscal on a low base (68 per cent decline in fiscal 2021), though it will still be significantly lower at around 70 per cent of FY 2020 level. Gautam Shahi, Director, CRISIL Ratings said ‘Domestic traffic fell 85 per cent in the first half of last fiscal due to lockdowns and restrictions on operations. Despite the second wave-induced fresh curbs, which will temper recovery, domestic traffic in the first half of this fiscal is likely to be 3.5-4 times higher on-year, on a low base’. He also said ‘the second half should see good recovery in traffic, supported by acceleration in the vaccination drive and people gradually taking to travel after prolonged stay at home’.

He added that a gradual recovery in international operations in the second half of fiscal 2022 will also boost traffic. However, airlines have also seen their cost of operations spurt due to a rise in the price of aviation turbine fuel (ATF), a key cost head for them. The price, which remained low until November 2020, limiting their losses, has shot up 30% since then. This will offset the benefits from some of the initiatives the carriers undertook to reduce cost - employee costs, rentals, among others, in the last fiscal, and which are being carried forward into the current fiscal.

The CNX Nifty is currently trading at 14635.70, up by 54.25 points or 0.37% after trading in a range of 14559.00 and 14689.85. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Wipro up by 9.06%, Hindalco up by 5.78%, BPCL up by 3.62%, Mahindra & Mahindra up by 2.86% and Ultratech Cement was up by 2.86%. On the flip side, ICICI Bank down by 1.39%, Bajaj Finance down by 0.95%, TCS down by 0.83%, Hindustan Unilever down by 0.71% and Axis Bank was down by 0.70% were the top losers.

All Asian markets were trading firm, Straits Times advanced 13.89 points or 0.44% to 3,198.66, Nikkei 225 surged 40.68 points or 0.14% to 29,683.37, KOSPI rose 4.29 points or 0.13% to 3,198.62, Taiwan Weighted strengthened 82.08 points or 0.48% to 17,158.81, Hang Seng increased 207.57 points or 0.72% to 29,000.71, Shanghai Composite gained 32.21 points or 0.95% to 3,431.20 and Jakarta Composite was up by 2.12 points or 0.03% to 6,081.62.

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