IGI Logo

Indian equity benchmarks, after a reasonable weakness of the last few sessions, witnessed a sharp comeback on Monday and closed the day with hefty gains of over one and half percent, on the back of strong gains in heavyweights such as Indusind Bank, SBI, ICICI Bank and HDFC Bank. Market started the day on positive note and traded in fine fettle, as sentiments got a boost with the government data showing that India's exports in April jumped nearly three-fold to $30.63 billion from $10.36 billion in the same month last year. Imports too rose to $45.72 billion last month as against $17.12 billion in April 2020. Traders also took note of report that the average of daily cases has fallen for seven days in a row with India reporting 281,860 new cases in the last 24 hours. This is the first time since April 21 that India has recorded new cases below the 300,000 mark.

The indices extended gains and continued their upward rally in late afternoon session, taking support from the India Meteorological Department (IMD) stating that the southwest monsoon is likely to arrive over Kerala on May 31, a day earlier than its normal onset date. The normal onset date of the monsoon over Kerala is June 1. Traders also found some solace with RBI data showed that country's foreign exchange reserves increased by $1.444 billion to $589.465 billion in the week ended May 7, 2021. In the previous week ended April 30, 2021, the reserves had risen by $3.913 billion to $588.02 billion.  

Market participants paid no heed towards report that the wholesale price-based inflation shot up to an all-time high of 10.49 per cent in April, on rising prices of crude oil and manufactured items. Also, a low base of April last year contributed to the spike in inflation in April 2021. The street also overlooked that Care ratings’ latest survey stated that amid a raging second wave of COVID-19 and subsequent restrictions on business activities imposed by several states, economic recovery is beginning to lose steam and the country's GDP growth is likely to be below nine per cent for the current fiscal. 

On the global front, Asian markets ended mixed on Monday, while European markets were trading lower, as investors digested a slew of economic data from China and kept a wary eye on the COVID-19 surge across much of Asia. Traders also eyed the minutes from the Federal Open Market Committee's latest meeting, due out Wednesday, for further clues to officials' views on the recovery. Back home, on the sectoral front, oil industry’s stocks were in watch with a private report that India’s oil demand worsened in the first half of May as large parts of the nation remained under local lockdowns to battle the world’s worst outbreak of Covid-19. There was some buzz in pharma stocks with report that the fresh wave of Covid-19 in the country has pushed up sales of medicines and resulted in exponential growth for the pharmaceutical sector. Hotel industry stocks too were in focus as the Federation of Hotel & Restaurant Associations of India (FHRAI) said the Indian hotel industry has taken a hit of over Rs 1.30 lakh crore in revenue for the fiscal year 2020-21 due to the impact of the COVID-19 pandemic.

Finally, the BSE Sensex gained 848.18 points or 1.74% to 49,580.73, while the CNX Nifty was up by 245.35 points or 1.67% to 14,923.15. 

The BSE Sensex touched high and low of 49,628.42 and 48,923.13, respectively and there were 23 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.63%, while Small cap index was up by 1.61%.

The top gaining sectoral indices on the BSE were Bankex up by 3.98%, Finance up by 3.08, Metal up by 1.93%, Auto up by 1.90% and Power up by 1.86%, while Telecom down by 1.36%, Healthcare down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 7.27%, SBI up by 6.35%, ICICI Bank up by 4.41%, HDFC Bank up by 3.81% and Axis Bank up by 3.53%. On the flip side, Larsen & Toubro down by 2.02%, Bharti Airtel down by 1.96%, Nestle down by 0.97%, Sun Pharma down by 0.60% and Power Grid down by 0.26% were the top losers. 

Meanwhile, Care Ratings in its latest survey has said amid a raging second wave of COVID-19 and subsequent restrictions on business activities imposed by several states, economic recovery is beginning to lose steam and India’s GDP growth is likely to be below nine per cent for the current fiscal (FY22). It said at least 80 per cent of the respondents expect consumer demand for non-essential items as well as investment to be severely impacted due to the current COVID situation.

It mentioned ‘the economic recovery is beginning to lose steam with infection rates scaling record highs. Almost seven out of 10 respondents expect GDP (growth) to be below nine per cent for FY22.’ According to the survey, the majority of respondents expect the lockdown announced by several states will stay till May-end.

Altogether, 54 per cent of the people, who participated in the survey, believe that the lockdown is a solution to the current COVID-19 situation in the country. It added little more than three-fourth of the respondents feel that the current lockdown is not as stringent as the restrictions imposed last year.

The CNX Nifty traded in a range of 14,938.00 and 14,725.35 and there were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 7.54%, SBI up by 6.66%, ICICI Bank up by 4.45%, HDFC Bank up by 3.76% and Axis Bank up by 3.45%. On the flip side, Cipla down by 2.28%, Bharti Airtel down by 2.25%, Larsen & Toubro down by 1.91%, SBI Life Insurance down by 1.40% and Nestle down by 0.95% were the top losers. 

European markets were trading lower; UK’s FTSE 100 decreased 41.11 points or 0.58% to 7,002.50, France’s CAC fell 23.14 points or 0.36% to 6,362.00 and Germany’s DAX was down by 52.98 points or 0.34% to 15,363.66.

Asian markets ended mixed on Monday as investors cautiously kept an eye on the Covid-19 surge across in Asian region and outweighed strength in Wall Street overnight. Investors also eyed the minutes from the Federal Open Market Committee's latest meeting, which will be published on Wednesday, for further clues to officials' views on the recovery. Japanese shares ended lower as worries over the slow pace of the domestic vaccination drive along with expanded and extended state of emergency in more areas. Meanwhile, Taiwan and Singapore are also tightening new restrictions against the virus. Chinese shares ended higher, despite data showed that factory output slowed and retail sales missed expectations, indicating more pressure on the recovery in consumption.

Above views are of the author and not of the website kindly read disclaimer