The benchmark stock indices, which have rallied in recent weeks, are witnessing some resistance as investors look to book profits.

Another global rating agency has passed a negative judgment on India's growth prospects owing to the lack of sufficient fiscal stimulus.

Join us as we follow the top business news through the day.

Cathay Pacific, major shareholders Swire and Air China halt trading in Hong Kong

Some interesting development coming from East Asia this morning as the Hong Kong government decides to bail out a major airline.

Reuters reports: "Cathay Pacific Airways Ltd and its major shareholders Swire Pacific Ltd and Air China Ltd halted trading in their shares in Hong Kong on Tuesday pending announcements.

Cathay's management team on Friday met with the leaders of pilot unions at Cathay Pacific and its regional arm Cathay Dragon to brief them on condition of confidentiality ahead of an announcement expected on Tuesday, three sources with knowledge of the matter told Reuters.

A fourth person said Hong Kong's Cathay was poised to announce a new chief executive at Dragon along with some other senior management changes. The sources declined to be identified because they were not authorised to speak with media.

Swire owns a 45% stake in Cathay and Air China owns 30%.

Cathay has grounded most of its planes because of falling demand amid coronavirus-related travel curbs, flying only cargo and a skeleton passenger network to major destinations such as Beijing, Los Angeles, Singapore, Sydney, Tokyo and Vancouver.

The airline last month said it made an unaudited loss of HK$4.5 billion ($580.64 million) at its full-service airlines over January-April and flagged a “very bleak” outlook."

Sensex opens over 100 points higher, turns choppy on profit-booking

The rally in stocks over the last few weeks seems to be meeting some overhead resistance.

PTI reports: "Equity benchmark Sensex jumped over 100 points in early trade on Tuesday on optimism over reopening of the economy and unabated foreign fund inflows.

The gains were, however, capped as profit-booking at higher levels restrained benchmarks from strengthening further, traders said.

After opening at 34,520.79, the 30-share index turned choppy. It was trading 59.04 points, or 0.17 per cent, lower at 34,311.54.

Similarly, NSE Nifty slipped 17.55 points, or 0.17 per cent, to 10,149.90.

HDFC Bank was the top laggard in the Sensex pack, falling around 2 per cent, followed by M&M, Maruti, Bajaj Finance, SBI, Reliance Industries and ICICI Bank.

On the other hand, Sun Pharma, Asian Paints and ITC were among the gainers.

In the previous session, the BSE barometer settled 83.34 points, or 0.24 per cent, higher at 34,370.58, and the broader Nifty closed 25.30 points, or 0.25 per cent, up at 10,167.45.

On a net basis, foreign institutional investors bought equities worth Rs 813.27 crore in the capital market on Monday, provisional exchange data showed.

According to analysts, market opened with a positive bias due to fresh fund inflows through foreign direct investment (FDI) and foreign portfolio investors (FPIs), and a general optimism emanating from the benefits of the reversal of the lockdown."

Economy to shrink 5% this year, fiscal stimulus not enough to support growth

Another global rating agency has given a thumbs down to the Centre's stimulus programme.

PTI reports: "S&P Global Ratings on Monday said Indian economy will shrink 5 per cent in the current fiscal, saying the fiscal stimulus worth 1.2 per cent of GDP will not be enough to provide significant growth support.

In a report on emerging markets titled ‘Financial Conditions Reflect Optimism, Lockdown Fatigue Emerges’, S&P said the services sectors, which are large employers, have been severely affected, leading to widespread job losses.

“Migrant workers have been geographically displaced, and we expect it will take some time to unwind this process. There will be supply chain disruptions over the transition period,” S&P said.

The rating agency forecast Indian economy to shrink by 5 per cent in the current fiscal and said growth will rebound to 8.5 per cent in 2021-22. It projected growth to be 6.5 per cent in 2022-23.

India’s GDP growth slumped to a 11-year low of 4.2 per cent in 2019-20.

“The central bank has cut policy rates by 115 basis points since February, but policy traction remains low as banks remain unwilling to lend. New direct fiscal stimulus worth 1.2 per cent of GDP won’t be enough to provide significant growth support,” S&P said.

S&P had earlier said that the government’s stimulus package, with a headline amount of 10 per cent of GDP, has about 1.2 per cent of direct stimulus measures, which is low relative to countries with similar economic impacts from the pandemic. The remaining 8.8 per cent of the package includes liquidity support measures and credit guarantees that will not directly support growth."

Stimulus has not helped MSMEs: AIMO survey

Over 78% of the 60 million MSMEs and 83% of self-employed have expressed unhappiness over the financial stimulus announced by the Centre recently as they have not seen the direct benefits of it over the last three weeks, according to a survey conducted by the All India Manufacturers Organisation (AIMO).

“When the FM announced the details, everyone believed it was more than sufficient to tide over and rebound from the crises. However, over the last three weeks, the positive mindset has turned into a confused mindset for many of those who responded as they have not experienced the direct benefits of the package despite many visits to the banks,” said Harish Metha, national vice-president, AIMO said.