Indian equity benchmarks gave up
most of their gains in last leg of trade to come off their intraday high points
but still managed to end with decent gains, tracking positive global cues amid
optimism about a potential vaccine for the coronavirus. Key indices began the
session with a gap-up open, as traders took encouragement with Minister for
MSMEs and road transport and highways Nitin Gadkari's statement that the recent
steps announced by the government to boost liquidity and credit flows would
also bolster the purchasing power of the people via employment creation and
help accelerate the wheels of the economy. Traders took note of Expenditure
secretary TV Somanathan's statement that this is a challenging year for the
central government due to the serious revenue impact of the coronavirus crisis,
but added that the Centre had no plan of carrying out poorly calibrated
expenditure cuts. Both indices gave up more than of intraday gains in late
trade, as traders got wary with a private report stating that American
brokerage Goldman Sachs expects the Indian economy to contract by 5 per cent in
FY21, making it the worst performance by the country ever. The brokerage said
the GDP will contract by a mind-boggling 45 per cent in the June quarter as
compared to the January-March period on an annualised basis, because of the
continuing lockdown which is chilling economic activity, before recovering
later. Some concern also came as the rating agency Moody's Investors Service in
its latest report stated that the measures announced for financial institutions
as part of Rs 20 lakh crore-economic package will help ease their asset risk,
but will not fully offset the negative impact from the COVID-19 outbreak.
Finally, the BSE Sensex gained 167.19 points or 0.56% to 30,196.17, while the
CNX Nifty was up by 55.85 points or 0.63% to 8,879.10.
The US markets ended lower on
Tuesday as traders cashed in on the rally seen on Monday. Weakness also
prevailed after a report cast doubt on Moderna's coronavirus vaccine candidate
and Wall Street braced for a potentially protracted economic recovery. Markets
ignored comments from Federal Reserve Chair Jerome Powell, who reaffirmed the
central bank will provide more support to the economy. Testifying before the Senate Banking
Committee, Powell said the central bank needs to be prepared to act further and
I would say we are, if the need is there. Powell said as a society, we should
do everything we can to provide relief to those who are suffering for the
public good. On the economic data front, the Commerce Department released a
report showing another steep drop in new residential construction in the US in
the month of April. The report said housing starts plummeted by 30.2 percent to
an annual rate of 891,000 in April after tumbling by 18.6 percent to a revised
1.276 million in March. Street had expected housing stocks to plunge by 23.8
percent to a rate of 927,000 from the 1.216 million originally reported for the
previous month. The Commerce Department said building permits also slumped by
20.8 percent to an annual rate of 1.074 million in April after falling by 5.7
percent to a revised 1.356 million in March. Building permits, an indicator of
future housing demand, had been expected to nosedive by 26.1 percent to a rate
of 1 million from the 1.353 million originally reported for the previous month.
Crude oil futures ended higher on
Tuesday, extending recent gains, supported by increased demand and output cuts.
With several countries across the globe relaxing lockdown restrictions and
reopening their economies, energy demand has picked up a bit. Meanwhile, US oil
production has fallen and there are signs of further declines ahead. Crude-oil
production from seven major US shale plays is forecast to decline by 197,000
barrels a day in June to 7.822 million barrels a day. Crude oil futures for
June rose 68 cents or 2.1 percent to settle at $32.50 a barrel on the New York
Mercantile Exchange. July Brent crude gained 16 cents or 0.5 percent to settle
at $34.65 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Tuesday amid selling in American currency by banks and exporters.
Traders took support with Minister for MSMEs and road transport and highways
Nitin Gadkari's statement that the recent steps announced by the government to
boost liquidity and credit flows would also bolster the purchasing power of the
people via employment creation and help accelerate the wheels of the economy.
Positive trend in domestic equities and weakening American currency also
supported the local unit. Traders overlooked a private report stating that
American brokerage Goldman Sachs expects the Indian economy to contract by 5
per cent in FY21, making it the worst performance by the country ever. On the
global front, dollar nursed losses against major currencies on Tuesday, after
encouraging data from the trial of a vaccine for COVID-19 reduced safe-haven
demand for the greenback. Finally, the rupee ended at 75.66, 25 paise stronger
from its previous close of 75.91 on Monday.
The FIIs as per Tuesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 4680.85 crore against gross selling of Rs 7203.38 crore, while
in the debt segment, the gross purchase was of Rs 1696.99 crore with gross
sales of Rs 3228.29 crore. Besides, in the hybrid segment, the gross buying was
of Rs 4.52 crore against gross selling of Rs 3.74 crore.
The US markets ended lower on
Tuesday as investors focused on a report questioning Moderna's recent
coronavirus vaccine early-stage trial results. Asian markets are trading mostly
in green on Wednesday as investors await the release of China's benchmark
lending rate. Indian markets ended higher with gains of over half a percent
each on Tuesday amid positive global cues on hopes of a vaccine for Covid-19.
Today, markets to make optimistic start following positive cues from Asian
peers. Some support will come with report that the government has decided to
further revise the criteria for medium units by enhancing the investment and
turnover limits to up to Rs 50 crore and Rs 200 crore respectively. Though,
rising coronavirus cases may impact markets. India has witnessed its biggest
daily spike in the total number of coronavirus cases, with over 6,000 being
reported in 24 hours, according to data compiled by Worldometer. There are
106,468 cases of Covid-19 in the country at present, and as many as 3,301
people have died from the disease. Traders may be concerned as rating agency
CRISIL joined analysts sceptical about the near-term benefits of the Rs 20 lakh
crore stimulus package on growth and also flagged the absence of any dedicated
steps for the most troubled sectors. There may be some cautiousness with the
Centre for Monitoring of Indian Economy's (CMIE) report that unemployment rate
in India continued to be high at 24% for the week ended May 17, same as week
before. Traders may react to the Federation of Indian Export Organisations'
(FIEO) statement that the export from the country is expected to fall by 20 per
cent in the current fiscal in the wake of the coronavirus pandemic. Meanwhile,
Markets regulator Sebi has allowed mutual funds to make additional investment
in government securities and treasury bills while deciding on investment
avenues for their corporate bond, banking, PSU and credit risk funds. Metal
stocks will be in focus as ratings agency ICRA revised its outlook for the
sector to negative from stable, expecting a record fall of 20 percent in domestic
steel demand during the ongoing financial year. There will be some reaction in
cement stocks with CRISIL Research's report that even as the Centre announced
an economic stimulus package to aid businesses struggling amid the nationwide
lockdown, cement dealers in the country expect demand to fall by up to 30
percent in FY21.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8,879.10
|
8,812.82
|
8,987.87
|
BSE Sensex
|
30,196.17
|
29,962.01
|
30,585.15
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Bharti Airtel
|
719.10
|
598.80
|
569.37
|
615.87
|
State Bank of India
|
715.23
|
152.80
|
150.85
|
156.30
|
Tata Motors
|
653.79
|
81.80
|
80.32
|
84.47
|
ICICI Bank
|
618.29
|
300.30
|
294.43
|
308.83
|
Axis Bank
|
428.90
|
354.50
|
345.57
|
367.97
|
Kotak Mahindra Bank has launched a video-based KYC that will make it easier to open an account remotely, especially during the COVID-19 pandemic.
Tata Motors has rolled out Keys to Safety - a holistic package of offers to accelerate its endeavor of providing safer cars for all.
Vedanta has received approval for the proposal of de-listing of the company from the BSE and the NSE.
Maruti Suzuki India has delivered over 5,000 cars in the past few days.