Mumbai: Benchmark equity indices recovered on Monday following a bloodbath in the previous trading session, amid buying in FMCG, auto and private bank stocks.
Investors digested the disappointment surrounding the Union Budget presented by Finance Minister Nirmala Sitharaman on Saturday.
A fall in crude oil prices and an expansion in India’s January manufacturing activity to near eight-year high also kept the sentiment upbeat.
Brent crude prices fell to their lowest in more than a year, dragged down by worries about lower demand in China, the world’s largest oil importer, following a coronavirus outbreak there, Reuters reported. Brent crude was at $56.44 a barrel, down 18 cents, or 0.3 per cent.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, jumped to 55.3 last month from 52.7 in December. It was the highest reading since February 2012 and above the 50-mark separating growth from contraction for the 30th straight month.
The 30-share Sensex rose 0.34 per cent or 137 points to settle at 39,872, while the 50-share Nifty rose 0.53 per cent or 62 points to 11,724.
Markets at a glance:
Even as the benchmark indices closed higher, the market breadth was weak, with losers beating the gainers in the ratio of nearly 3:2.
BSE Midcap and BSE Smallcap indices rose 1.05 per cent and 0.08 per cent respectively.
Among sectoral indices, BSE Consumer Discretionary and BSE Basic Materials were the top gainers, advancing 1.75 per cent and 1.37 per cent respectively.
Nineteen of the 30 Sensex stocks ended in the green.
The country’s largest consumer goods maker Hindustan Unilever (up 71.23 points) rallied 4.89 per cent on hopes of a revival in the consumption story and contributed the most to Sensex’s gains. Top private lender ICICI Bank (up 67.69 points) followed next, as it rose 2.20 per cent.
Asian Paints, Nestle India, HUL, Bajaj Auto and IndusInd Bank were the top Sensex gainers.
On the other hand, ITC was the biggest loser. The stock continued its journey downwards and shed another 5.09 per cent after the Finance Minister proposed to hike excise duty on cigarettes and other tobacco products in the Budget.
TCS and HCL Tech, Hero MotoCorp and Tech Mahindra were among other top losers.
Shares of Info Edge gained 3.83 per cent after the company said it has acquired stake in Qyuki Digital Media.
Life insurers closed mixed after seeing steep declines on Saturday, as the Finance Minister offered an option of sharp reduction in tax rates for those who do not avail of any exemptions. ICICI Prudential Life fell nearly 2 per cent, while SBI Life and HDFC Life dropped 1.73 per cent and 0.49 per cent respectively.
Bharat Petroleum Corporation Ltd (BPCL) rose 4.04 per cent after a senior government official said the government will come out with the expression of Interest (EoI) inviting bidders for privatisation of the state-run oil marketing company within a few days.
Godrej Properties advanced 8.29 per cent after the realty firm posted a 9.27 per cent year-on-year rise in consolidated net profit.
Analysts’ views:
“We believe absence of any major announcements in the budget may weigh on the investor sentiments in the short-term and we may continue to witness volatility. On the global front too, while liquidity boost of $173 billion by China’s central bank is a good sign, rising concerns regarding coronavirus may continue to cause uncertainty in the markets.
– Ajit Mishra, VP – Research, Religare Broking
“Market is finding some sanity after the setback of not meeting high expectations from the budget, hereon the focus will be on corporate results and global trend. With valuations on the higher side, the on-going results reported has been mostly inline with estimates. Manufacturing PMI shows notable rebound providing a breather that the economy will stabilize as mentioned in the budget.”
– Vinod Nair, Head of Research at Geojit Financial Services
Global markets:
Asian shares stumbled, oil skidded and commodities on Chinese exchanges plunged on their first trading day after a long break on fears the coronavirus epidemic will hit demand in the world’s second-largest economy, Reuters reported.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 per cent, on track for its eighth straight day of losses.
European shares opened a tad higher on Monday as investors were relieved that the UK finally exited the EU, although concerns over the growing Chinese coronavirus dampened enthusiasm, according to a Reuters report. The pan-European STOXX 600 index rose 0.3 per cent.
Source: Economic Times
