Indian equity benchmarks traded
with a positive bias for most part of the day but selling activity which took
place during late hour of trade mainly forced the markets to cut all of their
gains and ended Tuesday's session in red terrain, amid selling in Realty,
Banking and Finance counters. The benchmarks staged a gap up opening, following
firm cues from their global peers. Traders found some support with report that
the RBI is considering a proposal for extending the moratorium on bank loans by
another three months to help people and industry impacted by the ongoing
lockdown to contain COVID-19, with further extension of the nationwide
lockdown. Market participants took note of report that market regulator SEBI
has said that entities providing capital and debt market services will continue
to remain operational during the nationwide lockdown which has been extended
for another two weeks to contain the spread of Covid-19. Though, key indices
failed to hold initial gains and slid lower in the last hour of trading, amid
cooling off buying interest across sectors. Some anxiety also came with
domestic rating agency ICRA estimating that the India's Gross Domestic Product
(GDP) might contract by as much as 20 per cent in the first quarter of current
financial year (Q1FY21) and is expected to overcome some lost ground in the
remainder of the year but still close FY21 down by up to 2 per cent after the
government announced graded relaxations in the lockdown. Investors also awaited
January-March earnings from large cap companies such as ICICI Bank due this
week for domestic cues. Finally, the BSE Sensex lost 261.84 points or 0.83% to
31,453.51, while the CNX Nifty was down by 87.90 points or 0.95% to 9,205.60.
The US markets ended higher on
Tuesday, extending the rebound seen over the course of the previous session,
buoyed by optimism about a gradual reopening of businesses around the country.
California detailed initial steps to ease restrictions that have been in place
for weeks to try to stop the spread of the coronavirus pandemic. Meanwhile, New
York Gov. Andrew Cuomo reiterated his call for federal aid for New York, the
epicenter of the pandemic, a day after he outlined a pathway to reopening parts
of his state, but also stressed that such decisions boil down to how much a
human life is worth. Besides, rising crude oil prices also bolstered equity
benchmarks as Wall Street looked to corporate earnings for an outlook on the
pandemic, with Disney's results in focus after the close. Besides, Healthcare
stocks showed a significant move to the upside during the trading day, driving
the Dow Jones US Health Care Index up by 2.2 percent. Significant strength was
also visible among networking stocks, as reflected by the 1.8 percent jump by
the NYSE Arca Networking Index. On the economic data front, a report released
by the Institute for Supply Management (ISM) showed US service sector activity
contracted for the first time since December of 2009 in the month of April. The
ISM said its non-manufacturing index tumbled to 41.8 in April from 52.5 in
March, with a reading below 50 indicating a contraction in service sector
activity. The non-manufacturing index slumped to its lowest level since hitting
40.1 in March of 2009 but still came in above street estimates for a reading of
36.8. Meanwhile, with the value of exports showing a steeper drop than the
value of imports, the Commerce Department released a report showing a notable
increase in the US trade deficit in the month of March. The report said the
trade deficit widened to $44.4 billion in March from $39.8 billion in February.
The trade deficit was expected to widen to $44.0 billion.
Crude oil futures ended sharply
higher on Tuesday, extending their previous session's gains, as investors
wagered on a slowdown in production and a gradual increase in appetite for the
commodity as business lockdowns intended to curtail the spread of the COVID-19
pandemic are rolled back. An agreement
between the Organization of the Petroleum Exporting Countries (OPEC) and its
allies, collectively known as OPEC+, to reduce output by 9.7 million barrels a
day in May and June officially began on May 1. Separately, some US oil have
also announced plans for voluntary output reductions, including ConocoPhillips.
Meanwhile, US President Donald Trump said oil prices moving up nicely as demand
begins again. Crude oil futures for June surged $4.17 or 20.5 percent to settle
at $24.56 a barrel on the New York Mercantile Exchange. July Brent crude rose
$3.77 or 13.9 percent to settle at $30.97 a barrel on London's Intercontinental
Exchange.
Indian rupee ended marginally
higher against dollar on Tuesday, on selling of dollars by banks and exporters.
Traders took some support with report that the RBI is considering a proposal
for extending the moratorium on bank loans by another three months to help
people and industry impacted by the ongoing lockdown to contain COVID-19, with
further extension of the nationwide lockdown. Positive trend in equity market
too supported the rupee. However, gains remain capped as anxiety remained among
the traders with domestic rating agency Icra estimating that the India's Gross
Domestic Product (GDP) might contract by as much as 20 per cent in the first
quarter of current financial year (Q1FY21) and is expected to overcome some
lost ground in the remainder of the year but still close FY21 down by up to 2
per cent after the government announced graded relaxations in the lockdown. On
the global front, U.S. dollar edged higher for a second consecutive day on
Tuesday as traders worried about rising tensions between the United States and
China, while the Australian dollar gained thanks to a bounce in oil prices.
Finally, the rupee ended at 75.63, 10 paise stronger from its previous close of
75.73 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 5775.86 crore against gross selling of Rs 6710.16 crore, while
in the debt segment, the gross purchase was of Rs 812.68 crore with gross sales
of Rs 1107.26 crore. Besides, in the hybrid segment, the gross buying was of Rs
29.43 crore against gross selling of Rs 25.80 crore.
The US markets closed in green on
Tuesday buoyed by optimism about a gradual reopening of businesses around the
country. Asian markets are trading mostly higher on Wednesday as oil prices
continued to move higher. Indian markets wipeout all gains and ended lower on
Tuesday amid concerns over muted corporate earnings and increased uncertainty
over the economic situation due to extended lockdown. Today, the markets are
likely to make a cautious start amid rise in crude oil prices overnight coupled
with concerns over rising coronavirus cases in India. As per latest data shared
by the Ministry of Health and Family Welfare, coronavirus cases in India are
racing towards 47,000 even as COVID-19 related death count is set to touch
1600-mark. There will be also some cautiousness with ICRA's report that the
incremental credit growth in the year ending March 2020 declined by 64% from Rs
16.79 lakh crore in the previous year to Rs 6.04 lakh crore. Also, the Centre
for Monitoring Indian Economy (CMIE) has said the Covid-19 crisis has led to a
spike in the country's unemployment rate to 27.11% for the week ended May 3, up
from the under 7% level before the start of the pandemic in mid-March. Though,
traders may take note of Global ratings agency S&P's statement that
additional financial stimulus is necessary in India to fight the COVID-19
pandemic, despite the country's weak fiscal position. Meanwhile, the government
has hiked excise duty by a record Rs 10 per litre on petrol and Rs 13 per litre
on diesel to garner Rs 1.6 trillion additional revenue as it repeated its
time-tested formula of not passing on gains arising from a slump in
international oil prices. There will be some buzz in the gems and jewellery
stocks with a private report that India's gold imports plunged 99.9%
year-on-year in April to their lowest in nearly three decades as air travel was
banned and jewellery shops were closed amid a nationwide lockdown to curb the
spread of coronavirus. Tourism industry stocks will be in focus as apex
sectoral body Federation of Associations in Indian Tourism & Hospitality
(FAITH) doubled its loss guidance for India's tourism sector to Rs 10 lakh
crore on account of impact of COVID-19 pandemic. There will be some reaction in
cotton related industry stocks with Care Rating's report that Indian cotton
yarn industry is likely to witness a decline in revenue and moderation in
profit margins in the short-term due to weak demand and shutting of
manufacturing units following the COVID-19 pandemic. Investors will be eyeing
the Markit Services PMI data for April to be released later in the day. Also,
there will be lots of earnings reaction based on the performance of the
companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,205.60
|
9,113.93
|
9,374.08
|
BSE Sensex
|
31,453.51
|
31,150.05
|
32,010.48
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
910.51
|
170.40
|
165.72
|
178.17
|
Oil & Natural Gas Corporation
|
618.66
|
78.45
|
77.10
|
80.85
|
Tata Motors
|
571.23
|
80.90
|
78.60
|
85.00
|
Axis Bank
|
509.83
|
389.00
|
377.42
|
409.67
|
ICICI Bank
|
450.72
|
330.85
|
324.27
|
342.72
|
NTPC has resumed construction activities of the Telangana Super Thermal Power Project in Telangana.
TCS has launched TCS WaferWise to help chip makers digitally reimagine their product quality assurance process.
Tata Motors has received approval from its authorized Committee to raise Rs 1000 crore via issue of Rated, Listed, Unsecured, Redeemable, NCDs.
ICICI Bank is planning to raise funds by way of issuance of debt securities.