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Barometer gauges maintain gains
Mar-26-2020

Stock markets were trading in fine fettle in late afternoon session, both Sensex and Nifty were trading above three percent each. Traders were seen piling positions in Bankex, Telecom and Realty sector while selling was witnessed in Metal and Energy sector stocks. Boarder indices, mid cap and small cap index too equally participate into rally. Markets maintained to trade in green zone, as traders took support with a private report that the government is likely to agree an economic stimulus package of more than Rs 1.5 trillion ($19.6 billion) to fight a downturn in the country that is currently locked down to stem the spread of coronavirus. Besides,  the government has decided to increase monthly quota of subsidized foodgrains by 2 kg to 7kg per person through ration shops for 80 crore beneficiaries to ensure sufficient supply during the lockdown. Traders took note of Care Ratings’ report that if the 21-day long national lockdown leads to 80 per cent production loss, the economy will take a hit of Rs 35,000-40,000 crore on a daily basis, shaving off Rs 6.3-7.2 trillion cumulatively. It added that Q4 growth may not be negative but can go down to 1.5-2.5%. The economy was slated to grow by Rs 1.74 lakh crore in Q4 or by 4.7%. Sector wise, Metal stocks were trading in red despite World Steel Association (worldsteel) in its latest report stated that India’s crude steel output increased by 1.5% to 9.56 million tonnes (MT) in February this year. The country had produced 9.42 MT steel in the same month a year ago.

On the global front, European markets were trading lower amid concerns about the impact on unemployment from the coronavirus pandemic as investors still wait for a massive rescue package to pass through the U.S. political process. Back home, in scrip specific development, Union Bank of India jumped on setting up emergency funding line for corporates, MSMEs and Cipla zoomed on getting USFDA's nod for Esomeprazole for oral suspension.

The BSE Sensex is currently trading at 29543.33, up by 1007.55 points or 3.53% after trading in a range of 28566.34 and 30099.91. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 3.38%, while Small cap index was up by 3.88%.

The top gaining sectoral indices on the BSE were Bankex up by 7.44%, Telecom up by 6.79%, Realty up by 6.53%, Capital Goods up by 4.35% and Industrials was up by 4.28%, while Energy down by 1.62% and Metal was down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 41.02%, Axis Bank up by 15.94%, ICICI Bank up by 6.76%, Bharti Airtel up by 6.42% and Hero MotoCorp up by 6.20%. On the flip side, Maruti Suzuki down by 3.33%, NTPC down by 2.95%, Reliance Industries down by 2.56%, Tech Mahindra down by 0.89% and Sun Pharma down by 0.88% were the top losers.

Meanwhile, in order to improve capital base, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for continuation of the process of recapitalization of Regional Rural Banks (RRBs) by providing minimum regulatory capital to RRBs for another year beyond 2019-20, that is, up to 2020-21 for those RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India.

The CCEA also approved utilization of Rs 670 crore as central government share for the scheme of Recapitalization of RRBs (i.e. 50% of the total recapitalization support of Rs 1340 crore), subject to the condition that the release of Central Government’s share will be contingent upon the release of the proportionate share by the sponsor banks.As per RBI guidelines, the RRBs have to provide 75% of their total credit under PSL (Priority Sector Lending). RRBs are primarily catering to the credit and banking requirements of agriculture sector and rural areas with focus on small and marginal farmers, micro & small enterprises, rural artisans and weaker sections of the society.

In addition, RRBs also provide lending to micro/small enterprises and small entrepreneurs in rural areas. With the recapitalization support to augment CRAR, RRBs would be able to continue their lending to these categories of borrowers under their PSL target, and thus, continue to support rural livelihoods.

The CNX Nifty is currently trading at 8567.75, up by 249.90 points or 3.00% after trading in a range of 8304.90 and 8749.05. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 39.98%, Axis Bank up by 14.99%, UPL up by 7.65%, Bharti Infratel up by 7.29% and Bharti Airtel up by 7.10%. On the flip side, GAIL India down by 3.44%, Maruti Suzuki down by 2.95%, NTPC down by 2.89%, Reliance Industries down by 2.62% and JSW Steel down by 2.60% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 151.36 points or 2.66% to 5,536.84, France’s CAC decreased 108.42 points or 2.45% to 4,323.88 and Germany’s DAX was down by 255.66 points or 2.59% to 9,618.60.

 
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