Global cues, dip in covid cases lifts Sensex by 233 points; Nifty above 15,250

Benchmark Indian equity indices continued their upward trajectory for the third straight day and opened with a gap up on Tuesday tracking Asian peers that rallied after technology shares spurred a Wall Street rally as Federal Reserve officials tried to soothe concerns about inflation. That apart steady decline in covid cases with the daily toll falling below the 200,000-mark made investors sentiments more buoyant. In opening trades, Sensex spurts 233 points or 0.46% to 50,885, while the Nifty 50 index is at 15,273 soaring 76 points or 0.50%.

Barring HDFC Bank all other 29 constituents of Sensex were trading in the green. ONGC, M&M, Nestle India, Titan & Asian Paints rose up to 1.55%.

“Two trends – one positive and one negative- need close monitoring. The negative is the likely huge shortfall in government revenues and its potential impact on macro stability. GST compensation to states is likely to be around Rs 2.5 trillion against the compensation cess estimated at Rs 1trillion in the budget leaving a gap of around Rs 1.5 trillion. This will have implications for deficit, borrowings and macro stability. But the problem can be mitigated if lockdowns are lifted soon. There is room for optimism on this front since fresh cases have fallen to 1.95 lakh cases during the last 24 hrs and recoveries are at 3.25 lakhs. So, anticipating progressive unlocking starting June, the Indian market is likely to join the current risk-on in global markets. Nifty is moving towards an all-time high. Nifty bank index has more room on the upside,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

All sectoral indices were trading in the green with the Nifty Metal index leading the pack with gains of over 1.5%, Nifty Auto & Nifty FMCG rose 0.93% and 0.87% respectively. Nifty Realty jumped 0.69%, Nifty IT up 0.39% and Nifty Bank was marginally up 0.12%.

The broader markets outperformed benchmark indices with the BSE MidCap & BSE SmallCap rallying 0.64% and 0.77% respectively. Bulls had the upper hand in the market as 1,365 shares advanced compared to 402 stocks declining and 483 scrips remained unchanged.

Earnings today

TTK Prestige, Computer Age Management Services, Ajmera Realty & Infra India, Alkem Laboratories, AstraZeneca Pharma India, Bajaj Electricals, Bayer Crop Science, Emami, GATI, Indoco Remedies, Newgen Software Technologies, Thermax, VIP Industries amongst others will be announcing their quarterly earnings today.

Stocks in spotlight

Grasim Industries’ net profit jumped 14% to Rs 1,715 crore on 26% increase in revenue from operations to Rs 24,398.92 crore in Q4 March 2021 over Q4 March 2020.

Bank of India said that the bank has decided to exercise call option on Bank of India Tier II Bonds Series XIII and declare 6 June as the Record Date for this purpose. The bonds were issued on 7 July 2016 and carry a coupon rate of 8.57% pa, payable annually with a call option on 7 July 2021.

GMM Pfaudler (GMMP) has announced that it has commenced manufacturing operations at its facility at Vatva near Ahmedabad on May 24, 2021. The new facility will immediately enhance the company’s capacity in Heavy Engineering while freeing up capacity in Karamsad to expand our Glass Lining business.

Amara Raja Batteries will be in focus as Clarios ARBL Holding is reportedly likely to sell 1.71 crore shares or a 10% stake in the company for an aggregate of $174 million. The floor price fixed at Rs 746 per share.

Bal Pharma announced the launch of Favipiravir formulation into the Indian market, under the brand name BALflu. Favipiravir is an emerging antiviral drug used for patients with mild to moderate Covid-19 infection.

Global markets

Overseas, Asian stocks are trading higher on Tuesday after technology shares spurred a Wall Street rally as Federal Reserve officials tried to soothe concerns about inflation.

In Southeast Asia, Singapore’s economy expanded by 1.3% year-on-year in the first quarter, data from the Ministry of Trade and Industry released Tuesday showed. The ministry also announced it would maintain Singapore’s GDP growth forecast for 2021 at “4 to 6%.”

U.S. stocks climbed on Monday as the technology sector and shares benefiting the most from the economic reopening led the advance. All eyes are on the US inflation measure, the personal consumption index, to be revealed this week.