Indices snap 2-day losing run

The BSE Mid cap index rose 1.26%, while Small cap index was up by 1.73%

The bulls made a comeback on the D-Street after two straight days of decline, with Sensex and Nifty settling above their crucial psychological levels of 52,300 and 15,700, respectively. The benchmarks opened in green and traded firmly higher for most part of the day, as traders took encouragement with Finance Ministry report stated that faster vaccine coverage and frontloading of fiscal measures announced in this year's budget would be the major factors in boosting the investment and consumption cycles and, in turn, reviving the economy, as economic activities have slowed down amid the second wave of Covid-19 and lockdowns across states. Besides, the Finance Ministry said it has released third monthly instalment of revenue deficit grant of Rs 9,871 crore to 17 states. With the release of this instalment, total Rs 29,613 crore has been released in the first three months of the current financial year as Post Devolution Revenue Deficit (PDRD) Grant to states. 

Benchmarks gained further momentum in second half of the session, taking support from the Department of Economic Affairs (DEA) in its monthly report stating that the economic impact of the second wave COVID-19 is likely to be restricted to the first quarter of 2022. As per the DEA, rapid vaccination of India's population and the frontloading of the fiscal measures are the key to invigorating investment and consumption. Traders overlooked International Zinc Association (IZA) stating that India loses around 5-7 per cent of its Gross Domestic Product (GDP) every year due to corrosion. The association also stressed upon the need for immediate and appropriate measures by authorities to control further damage. Meanwhile, all-powerful GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on June 12 to decide on GST rate cut for COVID essentials and black fungus medicine.

On the global front, Asian markets ended mostly higher on Thursday, as traders continued to be optimistic about strong economic rebound from the pandemic following increased Covid-19 vaccination rates. All eyes were on the U.S. inflation data due later in the day, which could provide hints of the direction of the Fed's economic diagnosis in the Federal Open Market Committee meeting next week. European markets were trading mostly in green as investors geared up for the European Central Bank meeting. Back home, on the sectoral front, insurance industry stocks were in focus as non-life insurers reported an 11.35 per cent rise in gross direct premium income in May, over the same period last year, which was marred by a nationwide lockdown to curb the spread of the coronavirus. Sugar stocks too were buzzing as Crisil Rating report said the profitability of integrated sugar mills is likely to go up by 75-100 basis points (bps) this financial year due to high exports for the second consecutive season and increased supplies of ethanol for blending with petrol.

Finally, the BSE Sensex rose 358.83 points or 0.69% to 52,300.47, while the CNX Nifty was up by 102.40 points or 0.65% to 15,737.75.      

The BSE Sensex touched high and low of 52,346.35 and 51,957.92, respectively and there were 23 stocks advancing against 7 stocks declining on the index.    

The broader indices ended in green; the BSE Mid cap index rose 1.26%, while Small cap index was up by 1.73%.

The top gaining sectoral indices on the BSE were Realty up by 3.27%, Healthcare up by 1.42%, Telecom up by 1.17%, PSU up by 1.05%, Metal up by 1.01% while, Auto was down by 0.11% was the only losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 7.29%, Bajaj Finserv up by 3.75%, SBI up by 2.56%, Indusind Bank up by 2.02% and Dr. Reddys Lab up by 1.32%. On the flip side, Bajaj Auto down by 0.91%, Maruti Suzuki down by 0.56%, HCL Technologies down by 0.34% and Ultratech Cement down by 0.28% and Power Grid Corporation down by 0.19% were the top losers.

Meanwhile, the Department of Economic Affairs (DEA) in its monthly report has said that the economic impact of the second wave COVID-19 is likely to be restricted to the first quarter of 2022. As per the DEA, rapid vaccination of India's population and the frontloading of the fiscal measures are the key to invigorating investment and consumption.

According to the report, capital expenditure had risen to 66.5 percent YoY in April 2021. High-frequency indicators started to pick up in May 2021. E-way bills witnessed an uptick in the second half of May this year. On agriculture, it said that the sector continues to offer prospects.  There was a slackening in eight core industrial output, PMI manufacturing, highlight toll collections, and Goods and Services Tax (GST). Construction rebounded to grow at 14.5 percent in Q4. As economic activity resumed following gradual unlocking and policy support, private consumption grew at 2.7 percent after falling for three consecutive quarters.

On the coronavirus pandemic, the DEA has noted that the spread of COVID-19 has been rapid in rural areas.  As per its report, the share of rural districts in new cases rose at a fast pace. This is shown by how cases rose from 49.7 percent in April of this year to 57.9 percent in May. With state-level lockdown restrictions being more adaptive to learnings from the first wave, manufacturing and construction are expected to experience a softer economic shock in the current quarter. It added that the pace and coverage of vaccination is critical to help India heal and regain the momentum of economic recovery.

The CNX Nifty traded in a range of 15,751.25 and 15,648.50 and there were 34 stocks advancing against 15 stocks declining, while 1 stock remains unchanged on the index.        

The top gainers on Nifty were Bajaj Finance up by 7.26%, Bajaj Finserv up by 3.82%, SBI up by 2.60%, Divis Lab up by 2.43% and Indusind Bank up by 2.15%. On the flip side, Bajaj Auto down by 0.96%, Eicher Motors down by 0.73%, UPL down by 0.66%, Adani Ports &SEZ down by 0.50% and Shree Cement down by 0.42% were the top losers.  

European markets were trading mostly in green; UK’s FTSE 100 increased 25.60 points or 0.36% to 7,106.61 and France’s CAC decreased 3.91 points or 0.06% to 6,559.54, while Germany’s DAX increased 35.96 points or 0.23% to 15,617.10. 

Asian markets ended mostly higher on Thursday, amid global investors awaited US inflation data for any sign the Federal Reserve could start tapering its massive stimulus. Chinese shares ended higher as inflation fears eased after China's central bank Governor Yi Gang said inflation is basically under control, and monetary policy would be kept steady. Meanwhile, reports that United States and China spoke by telephone and agreed to promote healthy trade and cooperate over differences, too supporting market sentiments. Moreover, Japanese shares gained after the Japanese government is poised to launch a large-scale economic stimulus package this summer ahead of a planned snap general election.

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