Tracking global cues, markets end on positive note

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June 27, 2020 5:00 AM

The biggest gainers on Nifty were Infosys, BPCL, TCS, Indian Oil Corporation, and IndusInd Bank, which were up by 6.64%, 6.5%, 4.92%, 4.76% and 3.76%, respectively.

According to provisional data on exchanges, FPIs on Thursday sold stocks worth $138.9 million and domestic institutional investors sold stocks worth $33.67 million.

India’s stock markets made gains on Friday and ended the week in the positive territory, thanks to the positive global cues Indian benchmarks were tracking. Foreign portfolio investors have remained buyers in June so far pumping in $2.87 billion into Indian equities.

The benchmark Sensex, which was up by 329.17 points or 0.94%, closed at 35,171.27 whereas Nifty, which was up by 94.1 points or 0.91%, closed at 10,383 led by information technology stocks. For this week, the benchmark indices — Sensex and Nifty — are up by 1.3%. The Indian markets were up on Friday tracking global cues which were positive on expectations of economic recovery, however the gains were capped due to a rise in coronavirus cases in countries such as the US and China.

Nifty on Friday remained firmly in the positive territory touching the high point of 10,407.5 during the trading hours but ended the session off the day’s highs. Stock markets in Germany, the UK and France were up between 1% and 1.63%. Asian markets also had a productive session with bourses in China, Taiwan and South Korea, up between 0.3% and 1.05%.

According to provisional data on exchanges, FPIs on Thursday sold stocks worth $138.9 million and domestic institutional investors sold stocks worth $33.67 million. Even though FPIs were sellers in the previous day’s trading session, their total monthly inflow continues to remain positive with flows till June 24 standing at $2.87 billion. This is a result of the rush of liquidity through global markets because of the measures taken by central banks around the world. The FPIs have turned buyers in the Indian market after selling for three straight months from March till May due to panic-selling caused by the spread of Covid-19.

According to a report by Kotak Institutional Equities, the monetary actions taken by central banks was simply a way to tempt economic participants to take more risks. “The monetary actions of central banks (cut in repo rates, limited or unlimited purchases of all sorts of bonds) are simply their ways to tempt economic participants (corporates, households) to take more risks and thus, revive the economy.”

After Thursday’s monthly expiry, the start of the July series was positive as markets ended their day making gains. The futures and options segment saw volumes of `8.52 lakh crore on Friday, against the six month average of `13.9 lakh crore.

The banking stocks, however, did not contribute to the market’s gains on Friday as Nifty Bank rose 0.4%, underperforming the benchmarks.  According to a report by HDFC Securities, the economic impact of Covid-19 in context of banks will be with respect to liability franchises and potential asset quality outcomes. “Even as the nationwide lockdown gradually lifts, there is more than enough evidence to suggest the economic impact of Covid-19 is set to continue. Contextually, for banks, liability franchises and potential asset quality outcomes have come to be of paramount importance, and rightly so,” it said in its report.

It added that Kotak Mahindra Bank is likely to report the lowest increase in the gross non-performing assets.
The biggest gainers on Nifty were Infosys, BPCL, TCS, Indian Oil Corporation, and IndusInd Bank, which were up by 6.64%, 6.5%, 4.92%, 4.76% and 3.76%, respectively. The biggest losers were Bajaj Finance, ITC, Bharti Infratel, Kotak Mahindra Bank, and Tata Motors, down by 3.09%, 3.07%, 2.82%, 2.35% and 1.73%, respectively. Sectorally, the biggest gainer was Nifty IT, up by 4.05%. The Nifty Midcap and Nifty Smallcap were up by 0.23% and 0.3%, respectively.

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