Key barometers firmed up once again in mid-morning trade amid high volatility. The Nifty was trading below the 9,900 mark. The sentiment was cautious after Moody's downgraded India's sovereign rating on Monday.
At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 248.13 points or 0.75% at 33,551.65. The Nifty 50 index gained 60.45 points or 0.62% at 9,886.60.
The broader market traded firm. The S&P BSE Mid-Cap index rose 0.86% while the S&P BSE Small-Cap index added 1.46%.
The market breadth was strong. On the BSE, 1439 shares rose and 641 shares fell. A total of 124 shares were unchanged. In the Nifty 50 index, 35 shares advanced while 15 stocks declined.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,575.46 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 459.25 crore in the Indian equity market on 1 June, provisional data showed.
Economy:
Moody's Investors Service on Monday downgraded India's rating to Baa3 and maintained the negative outlook. Moody's has downgraded India's local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local-currency rating to P-3 from P-2.
The decision to downgrade India's ratings reflects Moody's view that the country's policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period. Moody's expects prolonged period of slow growth to continue well beyond the pandemic. India's progress has been hamstrung by tardy implementation of reforms, it said.
Buzzing Index:
The Nifty Auto index rose 0.35% to 6,441.95, extending gains for tenth day. The index has added 18.6% in ten sessions while the benchmark Nifty 50 index has added 12.1% during the same period.
Tata Motors (up 2.23%) and Mahindra & Mahindra (up 1.01%) advanced. Escorts (down 1%) and Maruti Suzuki India (down 0.67%) declined.
Ashok Leyland added 0.22% to Rs 46.55. The company reported a 90% decline in total sales at 1,277 units for May 2020, as against 12,778 units in the same month last year. Medium and heavy commercial vehicles (M&HCV) total sales dropped by 97% at 266 units in May as against 8,946 units in the year-ago period. Light commercial vehicles (LCV) sales declined by 73% and stood at 1,154 units as against 4,226 units in May last year.
TVS Motor Company rose 3.72% to Rs 365.15. The two and three-wheeler manufacturer announced total sales of 58,906 units in May 2020, compared with sales of 3,07,106 units in the corresponding period last year. Total two-wheeler registered sales of 56,218 units and domestic two-wheeler registered sales of 41,067 units in May 2020. Three-wheeler registered sales of 2,688 units in May 2020.
Hero MotoCorp was up 0.53% to Rs 2339.70. The two-wheeler major recorded total sales of 1.12 lakh units in May 2020, down 82.71% as against 6.52 lakh units in May 2019. Domestic sales tanked 82.92% to 1.08 lakh units in May 2020 as against 6.37 lakh units in May 2019. Exports dropped 73.93% to 3,834 units in May 2020 from 14,709 units in May 2019.
Bajaj Auto gained 0.25% to Rs 2764. The company reported 70% decline in total vehicles sales to 1.27 lakh units in May 2020 as against 4.19 lakh units in May 2019. It registered a 69% fall in the two-wheeler sales to 1.12 lakh units in May 2020 over 3.65 lakh units in May 2019. Sale of commercial vehicles slumped 74% to 14,330 units in May 2020 as compared to 54,167 units in May 2019.
Eicher Motors rose 0.97% to Rs 17127.80. The company said total Royal Enfield sales dropped 69% to 19,113 units in May 2020 from 62,371 units in May 2019. Royal Enfield exports slumped 68% to 684 units in May 2020 as against 2,160 units in May 2019.
Total sales of VE Commercial Vehicles, an unlisted subsidiary of Eicher Motors, tanked 85.71% to 686 units in May 2020 compared with 4,801 units in May 2019.
Global Markets:
Asian Markets extended multi-day rallies today on optimism about an economic rebound from the coronavirus crisis. Markets started the week with the reopening of several regional economies. Investors also cheered signs of the economy picking up in China, the region's biggest trading partner.
The US equity market finished session higher on Monday, 1 June 2020, as optimism around economic reopening and better than expected US manufacturing data for May. However, market gains capped due to nationwide protests and new trade stresses between China and the US.
Investor sentiments received some support after US manufacturing activity eased off an 11-year low in May, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen. The Institute for Supply Management said its manufacturing index climbed to 43.1 last month from an 11-year low of 41.5 in April. Readings under 50 indicate more companies are shrinking instead of expanding.
However, market gains were somewhat capped due to fears of a resurgence of the coronavirus in the United States following a weekend of riots and protests in the US, including outside the White House, in the wake of the death of African American George Floyd in police custody last week.
Market participants also eyed tensions between the US and China, after Chinese government officials ordered companies to halt imports of US farm products. The purchases were a key component in the two countries' phase-one trade deal. The move came after President Donald Trump on Friday said his administration would take action to respond to China's crackdown on Hong Kong, including removing Hong Kong's preferential trade status with the US and requesting a working group study Chinese companies listed on US stock exchanges for potential unfair financial practices.
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