Indian equity benchmarks cut some of their gains in late morning deals but remained higher, on the back of positive cues from other Asian markets. Traders remained positive, as credit rating agency ICRA in its latest report has said with decline in number of fresh COVID-19 cases and easing of restrictions, the country's gross domestic product (GDP) will grow at 8.5 percent in FY2021-22. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. It also said if vaccine coverage is accelerated following the re-centralised procurement policy, the GDP expansion in FY2022 may be as high as 9.5 percent, with a widening upside in Q3 and Q4 of FY2022.
However, gains got trimmed, after a US think-tank has observed that India's domestic challenges due to COVID-19 crisis have become a threat to its regional and global ambitions. It warned that unless it recovers with the help of allies like the United States, the pandemic could impact the geopolitical balance in the Indo-Pacific. It said as such, it is in the United States' best interests to help India retain its status as a pre-eminent power in South Asia, particularly in view of China's efforts to bolster its position at the expense of the US and India.
On the global front, Asian markets were trading mostly in green, after export prices in South Korea were up 12.3 percent on year in May, the Bank of Korea said on Friday - up from 11.1 in April. Individually, prices for exports of agricultural goods fell 2.4 percent on year and manufacturing products climbed 12.4 percent. Import prices jumped an annual 13.8 percent on year in April, slowing from the 15.3 percent gain in the previous month.
The BSE Sensex is currently trading at 52509.12, up by 208.65 points or 0.40% after trading in a range of 52472.90 and 52641.53. There were 16 stocks advancing against 14 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index was down by 0.06%, while Small cap index was up by 0.26%.
The top gaining sectoral indices on the BSE were IT up by 1.47%, TECK up by 1.27%, Energy up by 1.06%, Metal up by 0.68% and Auto up by 0.23%, while Realty down by 0.68%, Power down by 0.48%, Bankex down by 0.44%, Capital Goods down by 0.31% and FMCG down by 0.27% were the top losing indices on BSE.
The top gainers on the Sensex were Bajaj Finance up by 2.02%, TCS up by 1.81%, HCL Tech. up by 1.81%, Power Grid up by 1.43% and Infosys up by 1.34%. On the flip side, SBI down by 1.18%, ICICI Bank down by 0.88%, Indusind Bank down by 0.86%, Hindustan Unilever down by 0.62% and Axis Bank down by 0.61% were the top losers.
Meanwhile, the Centre for Monitoring Indian Economy (CMIE) in its report has stated that the gradual unlocking process across India is likely to restore about two-thirds of the 25 million non-farm jobs lost following the lockdown in May. That would be 17 million out of the 25 million non-farm jobs lost during the month. It said this relentless loss of employment can be expected to abate somewhat in the coming weeks as many parts of the country that were under a lockdown have started announcing cautious relaxations. CMIE's CEO Mahesh Vyas in a report said ‘These could provide some succour to the daily wage labourers who have suffered during the calibrated and localised lockdowns of May 2021’. He added as these restrictions on movement are relaxed, these workers can be expected to return in search of employment.
Vyas noted ‘We can expect a quick recovery of the informal jobs that were lost in the unorganised sectors because of the local lockdowns. But, there is also a steady fall in employment independent of the lockdowns’. As per the CMIE data, the total non-farm jobs lost since January 2021 works out to 36.8 million. Of this, daily wage labourers account for 23.1 million. Salaried employees account for 8.5 million and the rest are entrepreneurs. It would take a strong recovery of the India economy to recover the remaining jobs or revert to the employment levels of 2019-20. As per data, the unemployment rate that reached 11.9 per cent in May, continued to rise into early June. The 30-day moving average unemployment rate as of June 6 was 13 per cent.
Vyas added the Indian labour market is in its worst condition since the nation-wide lockdown months of April and May 2020. He mentioned that the last four weeks have seen a particularly sharp deterioration in labour market conditions. He noted ‘The downturn began in the week ended May 16. During this week, the labour participation rate was at 40.5 per cent, which was higher by a whisker than the average 40.4 per cent rate around which this ratio has been hovering for several months since the 2020 lockdown’. But the unemployment rate shot up suddenly to 14.5 per cent after remaining stable for several weeks at around 8 per cent. This implies that during this week of May 16, a number of people lost employment suddenly and they continued to look for jobs, albeit unsuccessfully.
The CNX Nifty is currently trading at 15793.90, up by 56.15 points or 0.36% after trading in a range of 15780.40 and 15835.55. There were 21 stocks advancing against 29 stocks declining on the index.
The top gainers on Nifty were Coal India up by 3.51%, HCL Tech up by 2.01%, TCS up by 1.84%, Bajaj Finance up by 1.78% and Infosys up by 1.63%. On the flip side, Adani Ports & SEZ down by 1.48%, SBI down by 1.18%, ICICI Bank down by 0.94%, SBI Life Insurance down by 0.92% and Indusind Bank down by 0.88% were the top losers.
Asian markets were trading mostly in green; Hang Seng increased 112.12 points or 0.39% to 28,851.00, Taiwan Weighted strengthened 71.25 points or 0.42% to 17,230.47, KOSPI rose 22.35 points or 0.69% to 3,246.99, Nikkei 225 surged 0.73 points to 28,959.29 and Straits Times advanced 0.39 points or 0.01% to 3,162.89. On the flip side, Jakarta Composite lost 3.33 points or 0.05% to 6,104.21 and Shanghai Composite declined 9.04 points or 0.25% to 3,601.82.