Extending gains to the fourth consecutive day, Indian share markets witnessed buying interest throughout the day and ended on a strong note.

Benchmark indices surged over 3% today as investors cheered the opening of the country's economy after months-long lockdown.

As part of its exit strategy, the government has outlined a plan to reopen nearly all activities outside of containment zones starting today.

At the closing bell, the BSE Sensex stood higher by 879 points (up 2.7%) and the NSE Nifty closed higher by 246 points (up 2.6%).

The SGX Nifty was trading at 9,772, up by 289 points, at the time of writing.

The BSE Mid Cap index ended up by 2.7%, while the BSE Small Cap index ended the day up by 3%.

On the sectoral front, gains were largely seen in the consumer durables sector, metal sector and finance sector.

Asian stock markets ended on a positive note today as US President Donald Trump's threats against China over new security laws for Hong Kong were less threatening than feared.

The rally was led by short covering as some investors had worried Trump could ditch his trade deal with China or call an immediate end to privileges to Hong Kong after the Chinese parliament passed new security legislation for the semi-autonomous city last week.

The Nikkei rose to a three-month high and gained 0.8% to 22,062.39, its highest close since February 26.

Meanwhile, the Hang Seng and the Shanghai Composite stood higher by 3.4% and 2.2%, respectively.

European shares edged closer to three-month highs today on hopes of a post-coronavirus global recovery.

The rupee is currently trading at 75.80 against the US$.

Gold prices are trading up by 0.2% at Rs 46,765 per 10 grams.

Moving on, market participants were tracking IDBI Bank share price as the lender reported profit in Q4FY20 after reporting losses for 13 straight quarters.

The lender posted a profit before tax (PBT) of Rs 2,896.6 million for Q4FY20 on healthy rise in net interest income and a sharp drop in provisions and contingencies. It had posted a loss of Rs 71,369 million in Q4FY19.

Shares of IDBI Bank ended 20% higher on back of the above news.

Apart from IDBI Bank, market participants were also tracking V-Guard Industries share price and Birla Cable share price as these companies announced their March quarter results today.

In news from the economic space, India's manufacturing activity contracted in May due to weak demand and logistic challenges, said the monthly IHS Markit India Manufacturing Purchasing Managers' Index (PMI) survey.

Reportedly, the fall was slightly slower than April's historic contraction.

Manufacturing PMI stood at just 30.8 in May, marginally up from April's 27.4.

A nationwide lockdown in April had led to conditions across sectors falling by the biggest margin ever and new businesses collapsing at a record pace.

Last month, jobs were hit the most. Jobs were again cut and at a quicker pace than April's 15-year high, the survey said.

However, the PMI survey showed that manufacturers remained optimistic towards the one-year business outlook in May.

In other news, as per Bank of America Securities, the lockdown extension by the government will have a deep impact on the economic activity.

The foreign brokerage firm sharply cut India's GDP forecast for this financial year to a contraction of 2%.

The estimate has been arrived at with the assumption that the lockdown will extend till mid-July and a restart of the economy will get stretched to August.

As per Bank of America Securities, GDP is expected to contract by 2%, 0.70% wider than the previous estimate.

The brokerage was quick to add that if the lack of a vaccine forces the government to continue with the semi-lockdown phase, the economy will contract by as much as 5%.

The sharp reduction in the GDP contraction also led the brokerage to revise up the fiscal deficit estimate by 0.50% to 6.3% as against 4.6% achieved in FY20.

Note that last Friday, the government released gross domestic product (GDP) numbers for the January-March quarter.

India's economy grew at 3.1% in the January-March quarter, its slowest pace in at least eight years. The GDP growth exceeded most estimates made by various rating agencies.

The Indian economy was grappling with its own issues and COVID-19 has made matters worse.

The industry was facing demand problems, due to which business houses were reluctant to undertake CAPEX plans. Unemployment was at its peak and exports were consistently down for several months.

India's GDP growth has been on a consistent decline after peaking out at 7.9% in Q4 of FY18 to 4.7% in Q3 of FY20, as can be seen in the chart below:

Declining GDP Growth for India

Interestingly, there's a silver lining in all this. India can become an outsourcing hub. The global slowdown will mean that countries like the US, will be looking out for low-cost outsourcing destinations like India.

Further, a lot of global buyers have already shifted to India to source ceramics, home appliances, fashion, and lifestyle goods.

Meanwhile, as per the reports, around a thousand foreign manufacturers want to relocate their production to India, a country they see as an alternative to China.