Share markets in India have extended early gains and are presently trading 1% higher.
Benchmark indices edged higher today tracking mixed global cues as economic activities in the country are getting back to pre-COVID levels, although infection cases continue to rise.
The BSE Sensex is trading up by 294 points, up 0.9%, at 34,500 levels.
Meanwhile, the NSE Nifty is trading up by 93 points.
The BSE Mid Cap index is trading up by 1.3%. The BSE Small Cap index is trading up by 1.4%.
On the sectoral front, gains are largely seen in the realty sector and automobile sector.
On the other hand, IT stocks are witnessing selling pressure.
The rupee is trading at 76.21 against the US$.
Gold prices are trading up by 0.1% at Rs 47,404 per 10 grams.
Market participants are tracking Reliance Industries share price after the group's chairman Mukesh Ambani said the conglomerate was now net debt-free after recent investments in its digital arm.
He also said that Reliance Industries will list two group companies in five years.
Shares of the company gained over 1.5% to hit a new all-time high on the back of the above news. The company's market capitalization crossed 10.5 trillion mark for the first time ever.
In news from the banking sector, ICICI Bank is among the top buzzing stocks today.
The private lender said it has divested a 3.96% stake in its general insurance arm for nearly Rs 22.5 billion.
Last month, while announcing its results for the March quarter, ICICI Bank had stated that it would look at further strengthening the balance sheet as opportunities arise.
Following the deal, the ICICI Bank's shareholding in ICICI Lombard General Insurance has fallen to 51.9%. The private lender held a 55.86% stake in the general insurance company as of March 31, 2020.
During the March quarter, ICICI Bank made Covid-19 related provisions worth Rs 27.3 billion to further strengthen the balance sheet. The provisions made by the bank were more than the requirement as per the Reserve Bank of India's guideline dated April 17.
ICICI Bank share price is presently trading up by 2%.
In other news, City Union Bank share price is witnessing selling pressure today after the bank reported a net loss of Rs 952.9 million in Q4FY20 as compared to a net profit of Rs 1,751.1 million in Q4 March 2019.
For the first time in the bank's 116 year history, City Union Bank reported a quarterly net loss due to higher provisioning to future delinquencies arising from the COVID-19 pandemic and a spike in bad loans.
Provisions and contingencies surged to Rs 4.5 billion in Q4FY20 from Rs 0.9 billion in the same quarter last year.
The private lender said it has made a provision of Rs 1.3 billion in the current quarter which includes a Covid-19 provision of Rs 1 billion over and above the RBI prescribed norms.
Bad loans increased by 43% to Rs 14.1 billion from Rs 9.8 billion a year ago.
The bank's total income rose 7.9% year-on-year (YoY) to Rs 12.2 billion during the quarter under review.
For the year ended March 30, 2020, the bank's net profit declined over Rs 2 billion to Rs 4.8 billion, as compared to Rs 6.8 billion in 2019.
The bank's MD & CEO said, "for the first time in 18 years, we have seen a decline in profit for the year-ended too. The bank's return on assets (ROA) usually stands at 1.5%-1.6%. For FY21, we have decided to retain ROA at 1% to calculate future provisioning, while the rest will be used to cover future defaults occurring due to Covid-19."
Speaking of the banking sector, note that the Bank Nifty index was underperforming the benchmark index Nifty after they hit their lows in March.
There were several reasons behind its underperformance - a rising NPA risk, lack of credit growth, and overcautious nature of banks in lending.
However, it is interesting to note that these problems haven't gone away, but banks have still managed to outperform Nifty in the past few weeks, as can be seen in the chart below:
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