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Indian equity benchmarks traded volatile and ended marginally in the green on Monday, helped by gains in heavyweight financial stocks such as SBI, Larsen & Toubro and Axis Bank. Traders took some support as India reported Covid-19 cases below the 250,000-mark for the second consecutive. The fresh caseload stood at 2.4 lakh. Amid a drop in cases, a few states have hinted at the possibility of easing lockdown from next month onwards. Some support also came in with a private report stating that the RBI surprised the Centre with a record Rs 99,122 crore in surplus transfer for FY21 and this will help the government tide over the revenue losses from lockdowns and extend more support to the pandemic hit industries and to the poor people. Traders also got relief after industry body Assocham has demanded from the government a 'concentrated and right kind' of relief package for MSME sector, which was most affected by covid-19 pandemic. Besides, RBI data showed the country's foreign exchange reserves rose by $563 million to reach $590.028 billion in the week ended May 14.

However, gains remain capped as some concern came with rating agency ICRA stating that slackening economic momentum driven by the second wave of Covid-19 infections in India has emerged as a concern with bruised sentiment, high healthcare costs and fuel expenses likely to limit discretionary purchases in the immediate term. Some anxiety also came as overseas investors withdrew Rs 4,444 crore from Indian markets in May so far amid concerns over the second wave of the coronavirus pandemic and its possible impact on the Indian economy. Traders also took a note of report that the GST Council is its upcoming meeting, scheduled to be held on May 28, is likely to take a call on levy of 12 per cent tax on import of oxygen concentrators for personal use.

On the global front, Asian markets ended mostly higher on Monday, while European markets were trading higher, as investors awaited several central bank rate decisions in the region as well as key U.S. inflation readings for guidance on monetary policy. Back home, on the sectoral front, power stocks were in watch as total dues owed by electricity distribution companies to power producers fell 3.4 per cent to Rs 78,379 crore in March 2021 as compared to the year-ago period, showing a reversal of discoms' growing outstandings. Oil and Gas sector stocks too were in focus as the government data released India's natural gas production jumped 22.7 per cent in April after Reliance Industries and its partner BP Plc ramped up output from their eastern offshore KG-D6 block.

Finally, the BSE Sensex rose 111.42 points or 0.22% to 50,651.90, while the CNX Nifty was up by  22.40 points or 0.15% to 15,197.70.      

The BSE Sensex touched high and low of 50,857.59 and 50,465.90, respectively and there were 15 stocks advancing against 14 stocks declining, while 1 stock remain unchanged on the index.     

The broader indices ended in green; the BSE Mid cap index rose 0.86%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were PSU up by 1.91%, Power up by 1.89%, Oil & Gas up by 1.72%, Utilities up by 1.52% and Realty up by 1.47%, while Telecom down by 0.93%, Metal down by 0.60%, FMCG down by 0.28%, Consumer Durables down by 0.27% and Energy down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.73%, Larsen & Toubro up by 1.74%, Axis Bank up by 1.40%, Power Grid up by 1.21% and ITC up by 1.17%. On the flip side, Titan Company down by 1.22%, Indusind Bank down by 1.20%, Mahindra & Mahindra down by 1.09%, Hindustan Unilever down by 1.03% and Ultratech Cement down by 1.00% were the top losers.

Meanwhile, rating agency ICRA said slackening economic momentum driven by the second wave of Covid-19 infections in India has emerged as a concern with bruised sentiment, high healthcare costs and fuel expenses likely to limit discretionary purchases in the immediate term. ICRA’s Chief Economist Aditi Nayar said contact-intensive services can expect cutback in spending. As expected, the shrunken base of nationwide lockdown in April 2020 boosted the pace of year-on-year expansion of several high-frequency indicators in April this year, resulting in a widespread improvement compared to the performance in March.

However, she said the optimism generated by this trend is limited as 8 of the 13 non-financial indicators last month remained below their pre-Covid levels. Moreover, indicators such as GST e-way bills, electricity generation, vehicle registrations and rail freight traffic displayed a slowing sequential momentum, reflecting the rise in Covid-19 cases and imposition of localised restrictions. She stated early data available for May confirms that this trend is continuing as the lockdowns have both been extended and spread to other states to curb the second wave of Covid-19.

She mentioned the sharply higher daily infections in second wave of Covid-19 will have a prolonged negative impact on consumer sentiment. Substantial healthcare expenses along with high retail prices of fuels are likely to squeeze disposable incomes in urban as well as rural areas. Moreover, after the satiation of pent-up demand seen during festive season in 2020, demand for many varieties of consumer durables may be low.

The CNX Nifty traded in a range of 15,256.25 and 15,145.45 and there were 26 stocks advancing against 24 stocks declining on the index.  

The top gainers on Nifty were Indian Oil Corporation up by 4.89%, BPCL up by 2.77%, SBI up by 2.44%, Larsen & Toubro up by 1.76% and Eicher Motors up by 1.47%. On the flip side, Shree Cement down by 2.51%, JSW Steel down by 2.25%, Tata Steel down by 1.94%, Britannia Industries down by 1.49% and %, Indusind Bank down by 1.38% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 20.82 points or 0.3% to 7,038.87, France’s CAC rose 10.29 points or 0.16% to 6,396.70 and Germany’s DAX was up by 67.25 points or 0.44% to 15,437.51.

Asian markets ended mostly higher on Monday as bets on a robust global economic recovery continued to support market sentiments, while investors are awaiting several central bank rate decisions in the Asian region as well as key US inflation readings for guidance on monetary policy. Japanese shares gained, even as the Japanese government prepares to extend a state of emergency beyond the initial ending date of May 31 because of worries over corona-virus outbreaks ahead of the Olympic Games in Tokyo, set to begin in July. However, Chinese shares rose, supported by signs of ample liquidity and low interest rates.

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