Sensex jumps 143 points at open, Nifty scales fresh high; pharma stocks rally

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Indian benchmark equity indices opened in the green on Wednesday following consistent decline in Covid cases and lifting of lockdown restrictions. In opening trade, Sensex advanced 143 points or 0.27% to 52,418, while Nifty 50 advanced 47 points or 0.30% to hit a fresh high of 15,789.

Gainers & losers ONGC was top Sensex gainer followed by PowerGrid (up 0.58%), Infosys (up 0.50%), HCL Tech (up 0.42%) and HUL (up 0.41%).

Ultratech Cement (down 0.82%), Kotak Mahindra Bank (down 0.79%), ICICI Bank (down 0.72%), IndusInd Bank (down 0.51%) and Axis Bank (down 0.46%) were among the laggards.

Barring Nifty Bank (down 0.48%) all major sectoral indices opened in the green. Nifty Pharma gained 1.17%, Nifty Realty advanced 1.08% and  Nifty FMCG index rose 0.25%. Nifty IT & Nifty Auto marginally rose by 0.06% & 0.08% respectively.

In the broader market BSE MidCap & BSE SmallCap indices continued the uptrend. BSE MidCap index advanced 0.45% and is trading near new peak of 22,877 while BSE Smallcap index was at 24,925 up 0.67% after hitting a fresh high 24,992.

“There are conflicting signals for the market. Softening US 10-year bond yield (now at 1.53%, significantly down from the recent peak of 1.74%), rising FII inflows (Rs 1422 cr yesterday) and more importantly steadily falling fresh Covid-19 cases and daily deaths are clear positives. But robust US jobs data and rising crude are negatives from the market perspective. IT is outperforming Banking this month. Huge delivery volumes in IT majors indicate high institutional investor confidence in this segment. A disturbing trend in the market is the sharp rise in the prices of many mid and small-caps of unproven track record. Many retail investors are over-doing the unlock trade,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Economy

World Bank on June 8 projected India’s economy to grow at 8.3 per cent in 2021. Earlier, the World Bank had estimated Indian economy to grow at a pace of 10.1 percent in FY 2021-22. Citing the reason to slash the FY22 growth of Indian economy, the global lending and monitoring body said that India has been hampered by the largest outbreak of coronavirus cases that any country has seen since the beginning of the pandemic.

“In India, an enormous second covid-19 wave is undermining the sharper-than-expected rebound in activity seen during the second half of FY2020/21, especially in services. With surging covid-19 cases, foot traffic around work and retail spaces has again slowed to more than one-third below pre-pandemic levels since March, in part due to greater restrictions on mobility, World Bank said in its latest Global Economic Prospects report.

The World Bank on Tuesday upgraded its growth forecast, with the global economy now expected to grow 5.6% in 2021. That compared against an earlier forecast in January for a 4% global economic expansion in 2021.

Earnings today

GAIL India, Bata India, Bajaj Healthcare, BCL Industries, Dynamic Cables, Gayatri Highways, GSS Infotech, Indian Metals & Ferro Alloys, Indraprastha Medical Corporation, Munjal Auto Industries, Shivam Autotech, Star Cement, Taneja Aerospace, and TeamLease Services will announce their quarterly earnings today.

Stocks in spotlight

Tata Motors said that a new wholly owned subsidiary named ‘TML CV Mobility Solutions Limited’ has been incorporated as a wholly owned subsidiary of Tata Motors. TML CV Mobility Solutions was incorporated to provide end to end services of operating, repair and maintenance including annual maintenance contracts (AMC) and Fleet Management Services (FMS) for the automotive including electric mobility/electric vehicles, electric buses, Fuel Cell buses, all types of commercial vehicles etc.

Adani Enterprises has incorporated a wholly-owned subsidiary namely, Mundra Windtech on 7th June, 2021 to carry on business as manufacturers of Wind Turbine Generators and other auxiliaries.

INOX Leisure said announced opening of QIP on June 8. The floor price is Rs 315.25 per equity share. The board will meet on June 11 to determine the QIP issue price.

Religare Enterprises said the board of directors of the company has considered and approved approved raising of funds to the tune of Rs 570 crore by preferential issue.

Welspun Corp said the company has received multiple orders of approximately 164 KMT valuing close to INR 1,725 crore.

Thangamayil Jewellery informed that the Tamilnadu Government has extended the total lockdown till 14 June 2021. Hence all showrooms and offices will remain closed till such date.

Global markets

Overseas, Asian stocks are trading mostly lower on Wednesday, as investors reacted to the release of Chinese inflation data.

China’s factory gate prices increased at the fastest pace since September 2008, official data showed on Wednesday, while consumer inflation also accelerated but at a slower-than-expected rate.

The producer price index (PPI) rose 9.0% from a year earlier in May, according to a statement from the National Bureau of Statistics.

Wall Street stocks finished a choppy session little changed Tuesday as markets digested data showing a lower US trade deficit.

The US trade deficit dipped by $6.1 billion to $68.9 billion in April, slightly larger than expected, as exports rose and imports fell, according to Commerce Department data.