Markets largely flat after opening higher

07 Jun , 2021 By : Kanchan Joshi

Mumbai: Indian equity markets on Monday opened higher, but soon erased gains and were trading largely flat.

At 9.30 am, the benchmark Sensex was 0.05% lower at 52070, while Nifty declined 0.02% to 15685 points. At open, the benchmark indices were up nearly 0.3?ch.

"Investors will continue to focus on trajectory of daily caseload and vaccination ramp up in the country in the near term. While domestic equities continue to look good, investors must focus on quality stocks with robust earnings visibility and margins of safety. In our view, sectors considered to be major beneficiaries of capex revival are likely to be back in focus in coming weeks," said Binod Modi, Head Strategy at Reliance Securities.

Foreign institutional investors were net buyers in the capital market on Friday, as per provisional exchange data. "News is positive for markets. Since the US jobs numbers have come lower than expected the Fed is likely to continue its accommodative stance with no indications about tapering. So the US 10-year yield is likely to remain stable with a negative bias till Thursday when the US inflation numbers will be released," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Goods and Services Tax collections in May at Rs1.02 lakh crore also came as a surprise since it was a month of subdued economic activity.

"This is a reflection of the underlying strength and growth impulses in the economy. Economic activity is likely to gather momentum as most states are gradually opening up since fresh Covid cases have fallen," Vijayakumar, added.

With the opening-up economy at states level, government’s higher allocation towards capital expenditures for FY22E should be helpful in driving economic growth in coming quarters, said Modi. "Additionally, various industries have also announced higher capex programme to sustain growth, which should also aid economic recovery."

Meanwhile, Bajaj Finance fell 4.4?ter the firm said it’s likely to witness higher gross and net non-performing assets in the first six months of the ongoing financial year amid disruptions from the second wave of the covid-19 pandemic.