IGI Logo

Key indices manage to end Thursday’s session marginally in green

Indian equity benchmarks wiped off most of their intraday gains but managed to end Thursday’s session marginally in green, paced by gains in metal, basic materials, consumer durables and industrials shares. The benchmarks opened higher and extended gains in noon deals, taking support from Chief Economist of the International Monetary Fund (IMF) Gita Gopinath’s statement that the Reserve Bank of India (RBI)’s quantitative easing measures are a welcome move. Gopinath also said that this fiscal stance is also appropriate for India overall and that it is good that support isn’t being pulled back. She added there is evidence of normalisation of economic activities in India. Sentiments remained up-beat with report stating that growth is of paramount importance now the Reserve Bank of India said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy. Investors remained optimistic with the corporate affairs ministry stating that the latest amendments to the insolvency law by way of an ordinance are aimed at providing an efficient alternative resolution framework for Micro, Small and Medium Enterprises (MSMEs). Pre-packaged insolvency resolution process has been introduced for stressed MSMEs. 

However, selling pressure in power, utilities and banking shares in the last hour of trade led to indices come off intraday highs. Concerns over rising coronavirus infections and resultant restrictions across the country also kept investors on the edge. Traders also got anxious with Fitch Ratings’ statement that India's non-bank financial institutions (NBFIs) face renewed asset quality and liquidity risks amid the second wave of coronavirus infections. These challenges are likely to increase if recent restrictions to contain the pandemic are expanded or prolonged, leading to greater economic and operational disruption. Meanwhile, the Reserve Bank of India announced an extension of interim ways and means advances (WMAs) limit of Rs 51,560 crore to state governments till September, to help them tide over the financial stress posed by the second wave of COVID-19.

On the global front, European markets were trading higher, while Asian markets finished mostly in green on Thursday after the Federal Reserve minutes from the March meeting indicated that officials were united on the need to see more progress on the recovery before scaling back their massive bond-buying program. Back home, on the sectoral front, auto component industry’s stocks were in watch as rating agency ICRA said the auto component industry is likely to see a lower contraction in revenue at 6-8 per cent for last fiscal as against earlier forecast of 12-15 per cent, aided by better-than-expected demand pick up across most of the sectors.

Finally, the BSE Sensex rose 84.45 points or 0.17% to 49,746.21, while the CNX Nifty was up by 54.75 points or 0.37% to 14,873.80. 

The BSE Sensex touched high and low of 50,118.08 and 49,581.61, respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.60%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Metal up by 4.44%, Basic Materials up by 3.00%, Consumer Durables up by 2.58%, Industrials up by 1.01% and IT up by 0.96%, while Power down by 1.04%, Utilities down by 0.64%, Bankex down by 0.61%, Energy down by 0.24% and PSU down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 4.24%, Titan Company up by 3.95%, Tech Mahindra up by 2.52%, Nestle up by 1.66% and TCS up by 1.40%. On the flip side, Indusind Bank down by 1.07%, ONGC down by 1.05%, Sun Pharma down by 1.05%, Bajaj Auto down by 1.01% and HDFC Bank down by 0.95% were the top losers.

Meanwhile, the corporate affairs ministry has said that the latest amendments to the insolvency law by way of an ordinance are aimed at providing an efficient alternative resolution framework for corporate persons classified as Micro, Small and Medium Enterprises (MSMEs) under the Code, for ensuring quicker, cost-effective and value maximising outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of MSMEs businesses and which preserves jobs.

It said pre-packaged insolvency resolution process has been introduced for stressed MSMEs. The initiative is based on a trust model and the amendments honour the honest MSME owners by trying to ensure that the resolution happens and the company remains with them. The ordinance to amend the Insolvency and Bankruptcy Code (IBC) was promulgated on April 4. The Union Cabinet approved a proposal to amend the IBC on March 31.

According to the ministry, it is expected that the incorporation of pre-packaged insolvency resolution process for MSMEs will alleviate the distress faced by them due to the impact of the pandemic Other expected benefits from the amendments include lesser burden on adjudicating authority, assured continuity of business operations for corporate debtor, less process costs and maximum assets realisation for financial creditors.

The CNX Nifty traded in a range of 14,984.15 and 14,821.10. There were 31 stocks advancing against 18 stock declining, while 1 stock remain unchanged on the index.     

The top gainers on Nifty were JSW Steel up by 9.21%, Tata Steel up by 4.98%, Shree Cement up by 4.47%, Titan Company up by 3.78% and Hindalco up by 3.69%. On the flip side, Indusind Bank down by 1.13%, Sun Pharma down by 1.09%, SBI Life Insurance down by 1.09%, HDFC Bank down by 1.00% and ONGC down by 1.00% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 190.54 points or 2.84% to 6,904.17, France’s CAC rose 54.06 points or 0.89% to 6,157.02 and Germany’s DAX was up by 62.88 points or 0.42% to 15,170.05.

Asian markets finished mostly in green on Thursday, as the ultra-dovish stance of US Federal Reserve after its  latest monetary policy meeting despite massive stimulus packages and a rising US Treasury yields reaffirmed chance of a swift economic recovery. Shanghai shares finished higher with the major gains from the healthcare sector amid ramp-up of vaccination efforts in the country due to spread of new variant covid-19. China reported 24 new Covid-19 cases on April 7, with 11 of the new cases were local infections reported in the southwestern Yunnan province. The country had administered a total of 149.07 million Covid-19 vaccine doses, as of Wednesday. Even though, Japanese shares retreated amid concerns over spike in new covid cases and on uncertainty over global economic rebound.

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