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NSE Intra-day chart (30 April 2020)
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Market Commentary 04 May 2020
Benchmarks to make negative start amid weak Asian cues


Indian equity benchmarks continued their positive momentum for the fourth consecutive session and ended Thursday's session with handsome gains of over three percent, tracking favourable global cues as positive results for experimental remdesivir drug towards Covid-19 treatment. Markets started session on a higher note, as the government's announcement to give considerable relief to many districts post May 4 boosted sentiments. Traders took encouragement with Niti Aayog CEO Amitabh Kant's statement that India's COVID-19 recovery rate has improved from 15% on April 19 to 24.56% as of April 29. Some optimism also came as a government task force has firmed up a road map for capital investments of Rs 111 lakh crore in infrastructure over six years through FY25, pledging 71% of the expenditure for energy, roads, urban development and railways, and envisaging a key role for private investors. Buying got intensified in the afternoon session, taking support from Open Budget Survey indicating that India has been placed at 53rd position among 117 nations in terms of budget transparency and accountability. The survey, conducted by International Budget Partnership (IBP), has provided India's Union Budget process a transparency score of 49 out of 100, which is higher than the global average of 45. However, markets trimmed most of gains in late afternoon session but still ended with solid gains, as sentiments remained buoyant with Agriculture Minister Narendra Singh Tomar's statement that the country's farm sector is functioning smoothly despite COVID-19 lockdown and there will not be much impact on its growth in the current fiscal unlike other sectors. Agriculture and allied sector's growth stood at 3.7 per cent during the 2019-20 fiscal. A strong rupee further strengthened investors' sentiment on Dalal Street. Indian rupee has ended higher by 57 paise at 75.09 per dollar, amid weak American currency in the overseas market. Finally, the BSE Sensex gained 997.46 points or 3.05% to 33,717.62, while the CNX Nifty was up by 306.55 points or 3.21% to 9,859.90.


The US markets ended lower on Friday amid disappointing earnings reports. The steep drop in shares of Amazon came after the company reported weaker than expected first quarter earnings. Shares of Honeywell also came under pressure after the conglomerate reported first quarter earnings that beat estimates but weaker than expected sales. Apple also moved to the downside after the tech giant reported better than expected quarterly results but declined to provide guidance amid uncertainty about the coronavirus pandemic. Further, weakness also prevailed in the markets amid the potential resumption of US-China trade tensions. On the economic data front, the Institute for Supply Management (ISM) released a report showing manufacturing activity continued to contract in the month of April. The ISM said its purchasing managers index slumped to 41.5 in April from 49.1 in March, with a reading below 50 indicating a contraction in manufacturing activity. The manufacturing index showed a notable decrease compared to the previous month but still came in above street estimates for a reading of 36.9. With the decline, the purchasing managers index dropped to its lowest level since hitting 39.9 in April of 2009. Meanwhile, a separate report released by the Commerce Department showed an unexpected increase in construction spending in the month of March. The Commerce Department said construction spending climbed by 0.9 percent to an annual rate of $1.361 trillion in March after tumbling by 2.5 percent to a revised $1.348 trillion in February. The increase came as a surprise to market participants, who had expected construction spending to plunge by 3.5 percent compared to the 1.3 percent slump originally reported for the previous month.


Crude oil futures ended higher on Friday as the market marked the official start date for production cuts under the recent agreement between major oil producers. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, were due to start cutting production after agreeing in April to reduce output by 9.7 million barrels a day in May and June. The move was meant to offset a severe drop in global demand on the back of travel restrictions tied to preventing the spread of COVID-19 pandemic. Further, Oil prices were also supported by a report from Baker Hughes that said the number of active rigs drilling for oil in the US dropped by 52 to 325 this week, declining for a seventh successive week. Crude oil futures for June gained 94 cents or 5 percent to settle at $19.78 a barrel on the New York Mercantile Exchange. However, June Brent crude lost 4 cents or 0.2 percent to settle at $26.44 a barrel on London's Intercontinental Exchange.


Indian rupee continued its upward momentum for the fourth day and ended fairly higher against US dollar on Thursday, on the back of aggressive selling of the American currency by exporters. Sentiments got up-beat with Niti Aayog CEO Amitabh Kant's statement that India's COVID-19 recovery rate has improved from 15% on April 19 to 24.56% as of April 29. Gains in domestic equity benchmarks in tandem with global markets along with weakness in the dollar overseas also supported the rupee. Traders took a note of former Union minister and Rajya Sabha member Suresh Prabhu's statement that India should leverage technology towards manufacturing in the post-COVID-19 scenario to tap consumption-based economies like the US and Japan. On the global front, the dollar nursed losses on Thursday after the U.S. Federal Reserve left the door open to more monetary easing and dampened expectations for a quick economic recovery from the coronavirus pandemic. Finally, the rupee ended at 75.09, 57 paise stronger from its previous close of 75.66 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 5587.68 crore against gross selling of Rs 4802.38 crore, while in the debt segment, the gross purchase was of Rs 1461.66 crore with gross sales of Rs 5494.57 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.07 crore against gross selling of Rs 5.62 crore.


The US markets ended sharply lower on Friday amid negative reaction to earnings and contraction in economic data of manufacturing activity for the month of April. Asian markets are trading in red on Monday as rising US-China tensions over the coronavirus and oil prices fell further turned investors cautious. Indian markets before going for a long weekend holiday ended higher with notable gains for fourth straight session on Thursday mirroring firm global cues. Markets remain closed on May 01, 2020, for Maharashtra Day. Today, the start of session is likely to be weak following lackluster trade in Asian peers. Investors will be looking ahead to the Manufacturing PMI data to be out later in the day. Traders will be concerned with report that India has entered the third phase of its nationwide lockdown. The worldometer data showed that the total number of coronavirus cases in the country has reached 42,505 and there have been 1,391 fatalities so far. There will be some cautiousness with government data showing that India's core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. However, traders may take some support later in the day with report that direct tax collection surged 36.5% to Rs 34,784 crore in the first month of fiscal year 2020-21, despite a nationwide lockdown, thanks to a 63% year-on-year fall in tax refunds in April. Some support may also come as Prime Minister Narendra Modi held a series of meetings with key cabinet ministers and officials of economic ministries to firm up the second stimulus package to lift the economy reeling under the impact of coronavirus-induced lockdown. Traders may take note of report that describing infrastructure development as an enabler for growth, a finance ministry-constituted task force has observed that creating new and upgrading existing infra projects with Rs 111 lakh crore investment will be key to raising India's competitiveness and achieving $5 trillion economy goal by 2025. There will be some buzz in the auto stocks reacting their monthly sales figures. Eicher Motors April auto sales plunged 98%, while Maruti Suzuki reported zero sales in domestic market. Sugar stocks will be in focus with ISMA's report that India's sugar production fell 20% to 258.01 lakh tonne in the current marketing year ending September due to lower cane output, while sales plummeted during the last two months because of the lockdown. There will be lots of earnings reaction based on the performance of the companies. 


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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  • Britannia Industries has launched WhatsApp-based Store Locator service for its customers to help them find its range of products in nearby stores during the lockdown. 
  • Wipro and Nutanix, a leader in enterprise cloud computing have launched Wipro's Digital Database Services powered by Nutanix Era and Nutanix HCI software. 
  • Credit rating agency -- S&P Global has affirmed its BBB+ rating with a stable outlook on Reliance Industries. 
  • Coal India has reported fall in its production by 10.9% to 40.38 million tonnes in April 2020.
News Analysis