The benchmark indices continued trading higher in mid-morning trade. At 11:27 IST, the barometer index, the S&P BSE Sensex, was up 377.22 points or 1.12% at 34,202.75. The Nifty 50 index added 122.45 points or 1.23% at 10,101.55.
Global cues were positive amid gradual reopening of economies. The sentiment was also boosted by Prime Minister Narendra Modi's comment that India's economy would get back on track backed by systematic reforms.
In the broader market, the S&P BSE Mid-Cap index rose 1.34% while the S&P BSE Small-Cap index gained 2.01%. Both these indices outperformed the benchmark Sensex.
The market breadth was strong. On the BSE, 1661 shares rose and 486 shares fell. A total of 121 shares were unchanged. In the Nifty 50 index, 40 shares advanced while 10 stocks declined.
The IHS Markit India Services Business Activity Index recorded 12.6 in May. Although the headline figure rose from April's unprecedented low of 5.4, it remained at a level which, prior to the coronavirus pandemic, was unparalleled in over 14 years of data collection and pointed to an extreme drop in services activity across India.
The Composite PMI Output Index, which measures combined services and manufacturing output, signalled a further severe contraction in private sector business activity during May. Posting 14.8, from 7.2 in April, the latest reading was consistent with a further decline in output which was unparalleled prior to the COVID-19 outbreak.
Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said: "Service sector activity in India is still effectively on hold, latest PMI data suggest, as output fell at an extreme rate once again during May. Given the stringency of the lockdown measures imposed in India, it is no surprise to see the severity of the declines in April and May."Demand for services, both domestically and overseas, continued to plummet in May as clients' businesses remained closed and footfall remains drastically below normal levels."With economic output set to fall enormously in the first half of 2020, it is clear that the recovery to pre-COVID-19 levels of GDP is going to be very slow."
Foreign portfolio investors (FPIs) bought shares worth Rs 7,498.29 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 441.05 crore in the Indian equity market on 2 June, provisional data showed. Uday Kotak sold 2.8% in Kotak Mahindra Bank for 6,900 crore through block deals on Tuesday.
Cyclone Nisarg intensified into a severe cyclonic storm Wednesday morning, and is expected to cross the Maharashtra coast this afternoon. The storm is likely to make landfall close to Alibagh in Raigad district, which is just over 100 km south of Mumbai.
Total COVID-19 confirmed cases worldwide stood at 63,82,952 far with 3,80,318 deaths. India reported 1,01,497 active cases of COVID-19 infection and 5,598 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
The Nifty PSU Bank index jumped 4.80% to 1,280.55. The index has added 14% in four sessions while the benchmark Nifty Bank index rose 10.2% during the same period.
IDBI Bank (up 9.84%), Punjab & Sind Bank (up 8.22%), Bank of Maharashtra (up 5.94%), Union Bank of India (up 4.86%), Punjab National Bank (up 4.79%), Indian Bank (up 4.18%), Central Bank of India (up 4.11%), State Bank of India (up 3.82%), Bank of Baroda (up 3.33%), Canara Bank (up 3.31%), Bank of India (up 3.12%), UCO Bank (up 2.48%), United Bank of India (up 1.56%) and Allahabad Bank (up 0.13%) advanced.
Asian shares rose Wednesday driven by optimism over economies reopening from shutdowns announced earlier to stem the spread of coronavirus.
Japan's services sector activity stayed deep in contraction in May, although the pace of decline moderated from the previous month, as restraining measures put in place over the coronavirus outbreak hurt business activity and the jobs market.
The final seasonally adjusted au Jibun Bank Japan Services Purchasing Managers' Index (PMI) rose to a seasonally adjusted 26.5 in May from a record low 21.5 in the previous month.
US stocks ended higher for a second straight day Tuesday. Technology, industrial and health care sector shares accounted for majority of the gains. Energy stocks outperformed the remainder of the market as the price of brent crude rose ahead of a meeting of major oil producers. Bond yields climbed, another indicator of receding pessimism among investors.
Meanwhile, President Donald Trump reiterated threats to deploy military troops across cities facing protests if governors and local officials prove unable to contain violent demonstrations.
Major cities from Los Angeles to New York have been engulfed in nightly protests after George Floyd, a black man, died last Monday following a confrontation with police in Minneapolis in which a white police officer, Derek Chauvin, was captured on video driving his knee onto Floyd's neck until the handcuffed man lost consciousness and later died.