Sensex and Nifty shrugged off downgrade of currency and local currency long term issuer ratings by Moody's and surged higher in trade on June 2. While Sensex gained 485 points to 33,788, Nifty rose 138 points to 9,964 intra day. In afternoon trade, Nifty was up 90 points to 9918 and Sensex was trading 315 points higher.
The surge in benchmark indices is similar to the record rally Indian markets went through last year after government cut corporate tax rates. Sensex and Nifty extended gains this year and hit all-time highs on January 20, 2020. While Sensex scaled all-time high of 42,273, Nifty touched record high of 12,430 during the same session.
Market rallied despite GDP growth slipping to a nearly 7-year low of 4.7 per cent in October-December 2019, weighed by a contraction in manufacturing sector output. The market also seemed to disregard Q2 economic growth which slowed for the sixth consecutive time to 4.5%, the lowest since March 2013.
Currently, India's GDP growth is predicted to turn negative due to the coronavirus lockdown but that has not stopped Sensex from surging 2,070 points in four consecutive sessions since May 27. S&P Global Ratings on May 28 said the Indian economy would shrink by 5 per cent in the current fiscal as it joined a chorus of international agencies that are forecasting a contraction in growth rate due to coronavirus lockdown halting economic activity. Fitch Ratings and Crisil, too, projected a 5 per cent contraction for the Indian economy.
Meanwhile, Kotak Bank, PowerGrid, IndusInd Bank, Sun Pharma, Bajaj Finance, Asian Paints, Titan, Tata Steel and Bharti Airtel were top Sensex gainers rising up to 8% in afternoon trade. Maruti, SBI, Tech Mahindra, Nestle India, ONGC and NTPC were top losers on Sensex falling up to 1.35%.
Of 30 Sensex stocks, 24 were trading in green. On BSE, 41 stocks hit 52-week highs against 40 falling to 52 week lows in afternoon trade. Total 348 shares hit their upper circuits against 142 falling to lower circuits on BSE. Market capitalization on BSE rose to Rs 131.78 lakh crore.
Market breadth was positive with 1599 stocks rising against 652 falling on BSE.