Snapping 6-day gaining streak,
Indian equity benchmarks ended Thursday's session in red terrain, as investors
remained anxious about rising number of coronavirus cases and its impact on the
global as well as domestic economy. Markets made slightly positive start,
tracking positive global shares. Traders also took some support with Union
minister Prakash Javdekar's statement that the government has formed an
empowered group of secretaries to enhance investment in the country to offset
the impact of coronavirus. However, key indices failed to hold on to gains and
slipped into red terrain, as traders turned wary with Moody's Investors Service
stating that the quality of retail and small business loans will deteriorate,
which account of 44 per cent of the total loans. Elaborating on the key drivers
behind India's sovereign downgrade, it said that the risks to the financial
system are rising. Markets extended their losses in afternoon session, as
former chief economic adviser Arvind Subramanian said the FRBM Act will
probably have to be revised by the end of the year as India will witness a
sharp decline in GDP growth due to the COVID-19 crisis. Subramanian further
said while labor reforms were necessary, the way they have been done by some
states has undermined basic protections to workers, especially in light of the
migrant crisis. However, domestic bourses managed to pare most of losses in
final hour of session as the Confederation of Indian Industry (CII) has laid
out a 10-point roadmap to revive growth and navigate the challenges of loss of
lives and livelihoods posed by the global pandemic COVID-19 that has forced
countries across the world to reset their growth paths. Finally, the BSE Sensex
lost 128.84 points or 0.38% to 33,980.70, while the CNX Nifty was down by 32.45
points or 0.32% to 10,029.10.
The US markets ended mostly lower
on Thursday, following the strong upward move seen over the past several
sessions, as traders took a breath to digest the recent strength on Wall
Street, which lifted the Nasdaq-100 to a record intraday high in early trading.
Traders seemed reluctant to make more significant moves ahead of the release of
the Labor Department's closely watched monthly jobs report on Friday. Street currently expect employment to tumble
by about 8.0 million jobs in May after plunging by 20.5 million jobs in April.
The unemployment rate is expected to jump to 19.8 percent from 14.7 percent.
The Labor Department released a report showing the pace of decline in
first-time claims for unemployment benefits has begun to stall a bit. The
report showed initial jobless claims tumbled to 1.877 million in the week ended
May 30th, a decrease of 249,000 from the previous week's revised level of 2.126
million. However, street had expected jobless claims to slump to 1.800 million
from the 2.123 million originally reported for the previous week. Jobless
claims pulled back further off the record high of 6.867 million set in the week
ended March 28th, although the number of new claims since the coronavirus
lockdowns now exceeds 42.6 million. The report also showed an unexpected
increase in continuing claims, a reading on the number of people receiving
ongoing unemployment assistance, which jumped by 649,000 to 21.487 million in
the week ended May 23.
Crude oil futures ended higher on
Thursday, extending the upward trend seen in recent sessions, after data showed
leading oil producers were in compliance with agreed production cuts. Commodity
data tracker Kpler said OPEC+ reduced production by around 8.6 million barrels per
day in May, suggesting total compliance of 89% with the output cut deal reached
in April. OPEC+ has another 1.1 million barrels per day to cut in order to
reach 100% compliance with the reduction pledge of 9.7 million barrels per day
from May to the end of June. The Organization of the Petroleum Exporting
Countries and its major allies, including Russia, a group known as OPEC+, have
yet to announce a new meeting date amid reports that the group planned to bring
forward a virtual gathering that had been planned for next week. Crude oil
futures for July rose 12 cents or 0.3 percent to settle at $37.41 a barrel on
the New York Mercantile Exchange. August Brent crude gained 20 cents or 0.5
percent to settle at $39.99 a barrel on London's Intercontinental Exchange.
Indian rupee ended marginally
lower against dollar on Thursday, due to fresh demand for the American currency
from banks and importers. Traders remain concerned with Global credit ratings
agency Moody's Investors Service stating that the quality of retail and small
business loans will deteriorate, which account of 44 per cent of the total
loans. Elaborating on the key drivers behind India's sovereign downgrade, it
said that the risks to the financial system are rising. Investors were also
anxious about rising number of coronavirus cases and its impact on the global
as well as domestic economy. On the global front, dollar strengthened on
Thursday, reversing its weakening trend of the past seven days, while the euro
slipped ahead of a European Central Bank meeting at which policymakers could
step up stimulus measures. Finally, the rupee ended at 75.57, 10 paise weaker
from its previous close of 75.47 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 10111.12 crore against gross
selling of Rs 7949.15 crore, while in the debt segment, the gross purchase was
of Rs 469.49 crore with gross sales of Rs 1434.24 crore. Besides, in the hybrid
segment, the gross buying was of Rs 7.40 crore against gross selling of Rs 5.09
crore.
The US markets ended mostly lower
on Thursday ahead of the release of the Labor Department's closely watched
monthly jobs report on June 05. Asian markets are trading mostly higher on
Friday amid hopes about a global economic recovery. Indian markets ended lower
after a volatile session on Thursday, following a more than 1,000-point rally
in the last six sessions led by losses in financials. Today, the markets are
likely to make slightly positive start following positive cues from Asian
peers. Traders will be getting some encouragement with the government data
showing that the country's job situation registered an improvement during
2018-19 with unemployment rate declining to 5.8 per cent, down from 6.1 per
cent in the previous financial year. Some support will also come with Crisil
Research report that even as coronavirus pandemic has impacted many sectors,
the agriculture could be the only bright spot as real agriculture is likely to
witness a 2.5 percent growth in 2020-21. Though, there may be some cautiousness
with report that the total number of coronavirus cases in India has risen to
226,713 and 6,363 have died from the fatal disease. Traders may be concerned
with surveys released by the Reserve Bank showing that consumer confidence has
collapsed amid the coronavirus pandemic and it may result in contraction of the
economy by 1.5 per cent during 2020-21. Meanwhile, the Centre has released Rs
36,400 crore as Goods & Services Tax (GST) compensation to states for the
period December 2019 to February. This comes at a time when the resources of
various state governments have taken a hit due to the novel coronavirus, or
COVID-19, pandemic. There will be some buzz in the steel stocks as the
government extended anti-dumping duty on certain variety of steel products till
December 4 this year with a view to guard domestic manufacturers from cheap
imports coming from China, Malaysia and Korea. Banking stocks will be in focus
with ICRA's report that gross non-performing assets (NPAs) of banks are likely
to worsen to 11.3-11.6 percent by the end of this financial year from 8.6
percent as of March 2020, due to disruptions caused by the coronavirus
pandemic. There will be some reaction in construction sector stocks with
Crisil's report that investment in Indian construction industry is likely to
witness a 12-16% decline to nearly Rs 7.3 lakh crore during the current fiscal
year, as COVID-19 pandemic has severely impacted the economy and liquidity
scenario.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,029.10
|
9,940.95
|
10,120.55
|
BSE Sensex
|
33,980.70
|
33,691.25
|
34,290.15
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
834.95
|
174.05
|
171.15
|
177.30
|
Tata Motors
|
720.81
|
98.50
|
96.40
|
101.00
|
ICICI Bank
|
570.62
|
347.85
|
341.23
|
358.73
|
Vedanta
|
559.83
|
104.40
|
98.60
|
107.70
|
Zee Entertainment
Enterprises
|
475.68
|
205.60
|
192.60
|
213.20
|
GAIL (India) has signed a MoU with Energy Efficiency Services for cooperation in development of Trigeneration projects in India.
Reliance Industries has achieved successful closure of India's largest ever Rights Issue of Rs 53,124.20 crore.
Maruti Suzuki has introduced a new range of Health and Hygiene, Genuine Accessories for car and personal care.
IndusInd Bank has launched a first-of-its-kind assisted mobile application-based facility.