Indian equity benchmarks ended
Monday's trade on a pessimistic note with heavy losses of around three and half
percent as Union home ministry extended the lockdown for another two weeks till
May 31 to contain the spread of coronavirus. Markets traded in negative note
since beginning, as domestic cases of the novel coronavirus continued to rise
steadily. Selling further crept in with the commerce and industry ministry's
data showing that India's exports contracted by a record 60.28 per cent to
$10.36 billion in April amid the coronavirus lockdown. Imports too tumbled by
58.65 per cent to $17.12 billion in April from $41.4 billion in the same month
last year. Besides, the trade deficit narrowed to $6.76 billion. Trade deficit
in April 2019 stood at $15.33 billion. Local bourses added more losses in late
afternoon session, as sentiments remained down-beat with former finance
minister P Chidambaram's statement that the fiscal stimulus package announced by
the government is hopelessly inadequate given the gravity of the economic
crisis as it amounts to only Rs 1.86 lakh crore, which is 0.91 percent of the
GDP. He also said the stimulus package has left several sections like the poor,
migrants, farmers, laborers, workers, small shopkeepers, and middle class high
and dry. Traders even overlooked Finance Minister Nirmala Sitharaman's
statement that the government would frame a policy where private entities are
allowed to participate in all sectors. The government will also notify a list
of strategic sectors where the presence of public sector enterprises (PSEs) is
required. Finally, the BSE Sensex fell 1068.75 points or 3.44% to 30,028.98,
while the CNX Nifty was down by 313.60 points or 3.43% to 8,823.25.
The US markets ended higher on
Monday, on optimism that the American economy might be percolating again, while
the medical community works toward a potential COVID-19 vaccine. Moderna (MRNA)
reported positive phase one results for a potential coronavirus vaccine. Shares
of Moderna spiked by 20 percent after the biotechnology company said an
early-stage human trial for a vaccine produced antibodies in all 45
participants. The next step for Moderna is a phase-two trial, which has been
approved to move forward by the Food and Drug Administration. The phase-one
trial was done in partnership with the National Institute of Allergy and
Infectious Diseases. Meanwhile, support was also tied to remarks by Federal
Reserve Chairman Jerome Powell, striking a more upbeat tone on US growth prospects,
while reiterating that the central bank still retained tools to limit the
economic downturn. Besides, reflecting the strength in the energy sector, the
Philadelphia Oil Service Index soared by 12.5 percent, while the NYSE Arca Oil
Index and the NYSE Arca Natural Gas Index jumped by 8.5 percent and 8 percent,
respectively. Significant strength was also visible among housing stocks, as
reflected by the 9 percent spike by the Philadelphia Housing Sector Index.
Magnifying their previous
session's rally, crude oil futures ended higher on Monday supported in large
part by efforts to rebalance a supply-demand dynamic that has been blown out of
whack due to the debilitating effects of the COVID-19 pandemic. A report from
the Energy Information Administration saying crude oil production from major US
shale producers will see a significant decline in June. Meanwhile, Saudi Arabia
said it would cut an extra 1 million barrels a day in June, with the United
Arab Emirates and Kuwait also contributing more than their targeted reductions.
Besides, the demand for oil has improved with the resumption of economic
activity. Crude oil futures for June surged $2.39 or 8.1 percent to settle at
$31.82 a barrel on the New York Mercantile Exchange. July Brent crude rose
$2.31 or 7.1 percent to settle at $34.81 a barrel on London's Intercontinental
Exchange.
Indian rupee ended considerably
weaker against U.S. dollar on Monday, due to fresh demand for the American
currency from banks and importers. Traders were concerned with the commerce and
industry ministry's data showing that India's exports contracted by a record
60.28 per cent to $10.36 billion in April amid the coronavirus lockdown.
Imports too tumbled by 58.65 per cent to $17.12 billion in April from $41.4
billion in the same month last year. Market participants also concerned about
the effectiveness of the fiscal stimulus package and the impact of extended
nationwide lockdown amid a significant rise in COVID-19 cases on the domestic
economy. Stronger dollar against key global currencies and subdued equity
market too put pressure on the domestic unit. On the global front, dollar held
its ground on Monday as concern about global tensions with China overshadowed
improving sentiment from easing coronavirus lockdowns, while talk of negative
interest rates pushed the pound to an almost two-month low. Finally, the rupee
ended at 75.91, 33 paise weaker from its previous close of 75.58 on Friday.
The FIIs as per Monday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 3877.98 crore against gross
selling of Rs 6388.56 crore, while in the debt segment, the gross purchase was
of Rs 1728.67 crore with gross sales of Rs 763.06 crore. Besides, in the hybrid
segment, the gross buying was of Rs 13.77 crore against gross selling of Rs
16.66 crore.
The US markets ended sharply
higher on Monday after Moderna (MRNA) reported positive phase one results for a
potential coronavirus vaccine. Asian markets are trading in green on Tuesday as
hopes rise on a potential coronavirus vaccine after a positive development from
a Moderna trial. Indian markets ended deeply in red on Monday as investors were
disappointed by government measures to aid an economic recovery. Today, the
markets are likely to make optimistic start following firm cues from global
markets. Some support will come 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 may take 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. Though, there may be some cautiousness amid rising coronavirus cases in
India as the Worldometer data showed that the total number of coronavirus cases
in the country has topped the 100,000 mark. As many as 3,156 people have died
from the disease in the country, while a little over 39,000 have recovered.
Traders may be also concerned with a private report that the combined fiscal
deficit of the Centre and states will top 12 percent of the GDP because of the
recent economy boosting measures, and higher borrowings by States to meet
COVID-19 exigencies. There will be some buzz in the power stocks with global
ratings agency Standard & Poor's (S&P) statement that the government's
stimulus measures will only provide a temporary lifeline to state-owned power
distribution companies as the coronavirus pandemic has increased liquidity
pressure for these firms. Auto stocks will be in focus with Industry body
Society of Indian Automobile Manufacturers' (SIAM) statement that the
government's economic stimulus package will not create demand.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8,823.25
|
8,700.57
|
9,052.12
|
BSE Sensex
|
30,028.98
|
29,582.20
|
30,862.01
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
880.09
|
92.50
|
89.85
|
95.40
|
State Bank of India
|
773.51
|
155.30
|
151.40
|
162.80
|
ICICI Bank
|
740.34
|
298.50
|
287.67
|
314.92
|
Axis Bank
|
478.65
|
358.80
|
344.40
|
381.10
|
Tata Motors
|
442.22
|
80.65
|
78.67
|
83.57
|
Coal India has initiated the process of development of coal bed methane projects with an estimated investment of Rs 2,474 crore.
ITC has resumed operations at its factories and plant locations manufacturing non-essential items with limited workforce.
Maruti Suzuki India is all set to restart production of vehicles at its Gurgaon plant from the May 18, 2020.
Cipla has submitted an ANDA for Fluticasone propionate and Salmeterol inhalation powder (100/50 mcg, 250/50 mcg and 500/50 mcg) to the USFDA.