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Indian equity benchmarks ended higher with gains of more than half percent on Tuesday, with Sensex and Nifty surpassing their crucial psychological levels of 52,750 and 15,800, respectively. The markets made a firm start to remain bullish throughout the session, as data released by the government showed that industrial production surged 29.3 per cent in May, mainly due to low-base effect and good performance by manufacturing, mining and power sectors, but remained below the pre-pandemic level. The manufacturing sector -- which constitutes 77.63 per cent of the Index of Industrial Production (IIP) -- grew 34.5 per cent in May this year. The mining sector output rose 23.3 per cent in May while power generation increased 7.5 per cent during the same month. Traders also found some support with a private report that the Indian economy is at the start of a virtuous cycle and on the path to becoming a $15 trillion economy over the next two decades.

Markets extended gains in late afternoon trading paced by buying interest in Banking and Energy shares. Some optimism also came as India Ratings and Research’s (Ind-Ra) report stated that loan collections on securitized portfolios, which had taken a hit because of the second wave of COVID-19 pandemic, are set to recover. It also said the collection efficiency on those loans had dropped to 69.2 per cent in May from 82.8 per cent in March. Some support also came with private report stated that business activity has climbed back to the pre-second wave levels with the seventh consecutive week of surge in levels as new coronavirus infection cases decrease. Traders overlooked the government data showed retail inflation remained above the RBI's comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect.

On the global front, Asian markets settled mostly higher on Tuesday as upbeat Chinese trade data boosted hopes of a quick economic rebound from the pandemic in major Asian economies. Investors also awaited cues from a slew of central bank decisions due this week. The Reserve Bank of New Zealand's decision is due Wednesday, while the Bank of Korea and Bank of Japan will announce their decisions on Thursday and Friday respectively. European markets were trading mostly in red as the global coronavirus caseload surged past 187 million and investors turned their focus to U.S. inflation data for June, due later in the day, for additional cues about the likely timing of policy tightening by the Federal Reserve. Back home, on the sectoral front, the Media and entertainment (ME) industry stocks were in focus with a private report that the country's ME sector will be the fastest growing globally in terms of both consumer and advertising spends, and will be an over-Rs 4-lakh-crore industry by 2025. There was some reaction in NBFCs stocks with Crisil’s report that Non-banking finance companies (NBFCs) are better placed currently on the liquidity front than they were a year ago, enabling them to service their near debt without much difficulty, despite a fall in collections because of the second wave of Covid-19.

Finally, the BSE Sensex rose 397.04 points or 0.76% to 52,769.73, while the CNX Nifty was up by 119.75 points or 0.76% to 15,812.35.   

The BSE Sensex touched high and low of 52,806.86 and 52,545.68, respectively and there were 22 stocks advancing against 8 stocks declining on the index.    

The broader indices ended in green; the BSE Mid cap index rose 0.01%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Bankex up by 1.41%, Energy up by 0.67%, Metal up by 0.67%, Basic Materials up by 0.66% and Oil & Gas up by 0.64%, while IT down by 0.30%, TECK down by 0.26% and FMCG down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.83%, HDFC up by 2.67%, Axis Bank up by 2.28%, Sun Pharma up by 2.12% and NTPC up by 1.70%. On the flip side, HCL Technologies down by 1.01%, Dr. Reddy's Lab down by 0.90%, Maruti Suzuki down by 0.60%, Tech Mahindra down by 0.57% and Hindustan Unilever down by 0.38% were the top losers.

Meanwhile, Rating agency  -- Crisil has said non-banking finance companies (NBFCs) are better placed currently on the liquidity front than they were a year ago, enabling them to service their near debt without much difficulty, despite a fall in collections because of the second wave of Covid-19. However, the pace of improvement in collection efficiency, the third of the wave of the pandemic, and access to funds need to be closely monitored.

It sated collections have once again been affected in the current fiscal by the second wave. The decline has been more pronounced in May (sequentially) because containment measures in most parts of the country kicked in only in the latter part of April. A gradual lifting of restrictions has resulted in an improvement in collections in June, but to a level still lower than March 2021.

Besides, an analysis by the rating agency indicated that under scenario-1, where it was assumed that collection in the next quarter would be 70 per cent of what it was in the past couple of quarters, almost 96 per cent of Crisil-rated NBFCs were found to have liquidity cover for three months of debt repayments. In the second scenario, where it was assumed that collection in the next quarter would be half of what it was in the past few quarters, it was found that almost 95 per cent of the NBFCs rated by the agency would have enough liquidity to cover three months of debt repayments.

The CNX Nifty traded in a range of 15,820.80 and 15,744.60 and there were 34 stocks advancing against 16 stocks declining on the index.   

The top gainers on Nifty were ICICI Bank up by 2.75%, Grasim Industries up by 2.66%, HDFC up by 2.63%, Axis Bank up by 2.31% and SBI Life Insurance up by 2.09%. On the flip side, Adani Ports & SEZ down by 1.91%, Dr. Reddy's Lab down by 0.99%, HCL Technologies down by 0.96%, Tata Consumer Products down by 0.63% and Tech Mahindra down by 0.59% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 18.62 points or 0.28% to 6,540.63 and Germany’s DAX fell 11.49 points or 0.07% to 15,779.02, while UK’s FTSE 100 increased 3.38 points or 0.05% to 7,128.80.

Asian markets settled mostly higher on Tuesday. Chinese shares ended higher after better-than-expected Chinese trade data. China’s customs data showed that Chinese exports rose 32.2% year-on-year, imports grew 36.7% year-on-year and the trade balance stood at $51.53 billion in June. Market sentiments improved further by tracking wall street gains overnight, while markets awaited the release of US inflation data for further clues about the global economic recovery. Investors also awaited cues from a slew of central bank decisions due this week. Japanese shares also gained on optimism over corporate earnings growth. However, lingering fears about the spread of the highly contagious corona-virus variants limited further gains in Asia.

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