Markets cheer as govt begins unlocking the economy

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Published: June 2, 2020 9:57 AM

Sectorally, Nifty PSU Bank rallied the most followed by Nifty Metal, Nifty Financial Services, Nifty Media and Nifty Bank. There were no sectoral losers during the day’s trading session.

stock markets, stock markets in India, coronavirus lockdown ease, coronavirus unlock 1.0, lockdown 5.0The F&O segment on Nifty witnessed volumes worth Rs 11 lakh crore against the six-month average of Rs 13.9 lakh crore.

The stock markets on Monday rallied for the fourth straight session as the government further eased lockdown norms to revive the economy.

The 50-share Nifty was up by 2.57% or 245.85 points to close at 9826.15. The benchmark Sensex was up by 2.71% or 879.42 points to close at 33,303.52. Financial stocks contributed 50% to Nifty’s gains whereas firm global cues also supported the market.

According to market experts, as long as there aren’t more problems with respect to the economy and the Covid-19 pandemic, the markets will continue to maintain some sense of stability.

Sanjeev Hota, head of research, Sharekhan by BNP Paribas, said, “It is a good start that the economy is opening up. The markets have been factoring in this opening up of the economy, they have also factored that fiscal (FY) 21 will be a complete washout year for corporate earnings and that normalcy would start to return in the second half of FY 21. If there is no incremental negative news from now on, then the market will see some stability.”

On May 30, the central government announced certain measures for easing the lockdown that has been extended till June 30. In its order, the government gave phase-wise details about the lifting the lockdown. In the first phase from June 8, all hotels, restaurants, malls and places of worship will be open to the public. In the second phase in July, the schools and colleges will start reopening on the feedback of state governments and UTs. In the third phase for which no timeline has been given, international air travel, gymnasiums, pools, entertainment parks among others could open.

According to a report by Motilal Oswal Institutional Equities, the key monitorable would be demand trends. “While these relaxations would help improve the supply-side situation and potentially defray fixed costs, it would also drive consumption at the margin. However, demand trends in respective categories are the key monitorables,” it said in a report.

Financials contributed the most to the gains made by the benchmarks during the day’s trading session. Nifty bank surged by 3.43% on Monday and its biggest gainers were Bank of Baroda, Punjab National Bank, IDFC First Bank, RBL Bank and State Bank of India. Shares of Bank of Baroda and Punjab National Bank rose by 9.37% and 8.41%. Stocks of IDFC First Bank, RBL Bank and State Bank of India rose by 7.47%, 6.68%, and 5.33%, respectively. According to the provisional data on the exchanges, foreign portfolio investors (FPIs) bought equities worth $208.85 billion whereas domestic institutional investors sold equities worth $60.79 million. The FPIs have been sellers for three straight months, pulling out $8.3 billion in May, $30.5 million in April and $703.1 million in May.

The F&O segment on Nifty witnessed volumes worth Rs 11 lakh crore against the six-month average of Rs 13.9 lakh crore. The cash market witnessed volumes worth Rs 63,252 crore against the six-month average of Rs 43,047.1 lakh crore. The biggest gainers on Nifty were Bajaj Finance, Bajaj Finserv, Titan, Tata Steel as well as M&M. The biggest losers were Dr Reddy’s, Bharti Infratel, UltraTech Cement, Nestle India and Sun Pharma.

Sectorally, Nifty PSU Bank rallied the most followed by Nifty Metal, Nifty Financial Services, Nifty Media and Nifty Bank. There were no sectoral losers during the day’s trading session. The broader markets continued to outperform Nifty with Nifty Midcap rising 3.1% and Nifty Smallcap rising 3.21% during the day’s trading session.

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