Thursday turned out to be a
disappointing session for the Indian equity indices which got crushed by over
two percent, on the back of weakness in global stocks along with rising
COVID-19 cases in India. After a negative start, the domestic bourses never
looked in recovery mood, as the Organization for Economic Co-operation and
Development (OECD) projected that India's economy will contract 7.3% in the
current fiscal year if there is a second wave of the coronavirus (Covid-19)
later this year. This is so far the steepest contraction that any agency has
predicted for the country. The sentiment was also weighed as global rating
agency -- S&P Global Ratings has affirmed 'BBB-' long-term and 'A-3'
short-term unsolicited foreign and local currency sovereign credit ratings on
India, dispelling fears that a rating downgrade is on the cards. The agency
said the outlook on the long-term rating is stable. It reflects India's
above-average real GDP growth, sound external profile, and evolving monetary
settings. Markets extended their free fall in late afternoon session to end
near day's low, as traders remained anxious with Union minister Nitin Gadkari's
statement that India was expected to lose revenue of Rs 10 lakh crore due to
the coronavirus crisis. He also said the situation was so grim that some states
do not have money to pay salaries next month, and the country needs to tackle
the crisis with positivity. Adding to the pain, ratings agency Fitch warned
that concentration of ownership after delisting may create governance and
key-man issues at the companies adopting such strategies. It noted that
corporates can also simplify or reorganise complex group structures without the
interference of minority shareholders through such moves. Finally, the BSE
Sensex lost 708.68 points or 2.07% to 33,538.37, while the CNX Nifty was down
by 214.15 points or 2.12% to 9,902.00.
The US markets ended sharply
lower on Thursday on concerns about a second wave of coronavirus cases, as
recent data has led to worries about economic reopening leading to a spike in
infections. The number of US coronavirus infections passed the two million mark
and over 112,000 Americans have died. Despite fewer cases being recorded in
some cities and states, the seven-day average of new cases over the past two
weeks is still rising in more than 20 states, leading investors to worry about
a second wave of the epidemic just as business activity is resuming. The global
case tally for the coronavirus climbed to 7.39 million on Thursday. The death
toll rose to 417,022. Besides, Substantial weakness was visible among steel
stocks, as reflected by the 9.6 percent nosedive by the NYSE Arca Steel Index.
The index continued to give back ground after ending Monday's trading at a
three-month closing high. On the economic data front, the Labor Department
released a report showing a continued decrease in first-time claims for US
unemployment benefits in the week ended June 6th. The report said initial
jobless claims tumbled to 1.542 million, a decrease of 355,000 from the
previous week's revised level of 1.897 million. Street had expected jobless
claims to slump to 1.550 million from the 1.877 million originally reported for
the previous week. Meanwhile, a report released by the Labor Department showed
a much bigger than expected increase in US producer prices in the month of May.
The Labor Department said its producer price index for final demand climbed by
0.4 percent in May after tumbling by 1.3 percent in April. Street had expected
the index to inch up by just 0.1 percent.
Crude oil futures ended lower
with cut of over 8 percent on Thursday as resurgence in coronavirus cases
dulled demand outlook. Coronavirus cases in the US are continuing to rise and
topped the 2 million mark just as businesses are resuming activity. The global
case tally for the coronavirus that causes COVID-19 climbed to 7.39 million on
Thursday. Besides, a weak economic outlook from the US Federal Reserve after
the conclusion of its monetary policy meeting, when it also said interest rates
will likely remain near zero percent through 2022, further weakened sentiment
in the oil market. Crude oil futures for July fell $3.26 or 8.2 percent to
settle at $36.34 a barrel on the New York Mercantile Exchange. August Brent
crude dropped $3.18 or 7.6 percent to settle at $38.55 a barrel on London's
Intercontinental Exchange.
Indian rupee ended weaker against
the US dollar on Thursday, on increased demand for the greenback from importers
and banks. Investors remain concerned as the Organization for Economic
Co-operation and Development (OECD) projected that India's economy will
contract 7.3% in the current fiscal year if there is a second wave of the
coronavirus (Covid-19) later this year. This is so far the steepest contraction
that any agency has predicted for the country. On the global front, dollar rose
on Thursday from a three-month low which it hit in the previous session, as
expectations that the global economy will recover swiftly from the coronavirus
pandemic took a beating after a U.S. central bank policy meeting. Finally, the
rupee ended at 75.79, 20 paise weaker from its previous close of 75.59 on
Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5030.96 crore against gross selling of Rs 5401.53 crore, while
in the debt segment, the gross purchase was of Rs 841.82 crore with gross sales
of Rs 917.70 crore. Besides, in the hybrid segment, the gross buying was of Rs
10.11 crore against gross selling of Rs 1.45 crore.
The US markets ended deeply in
red on Thursday amid concerns about a second wave of coronavirus cases, as
recent data has led to worries about economic reopening leading to a spike in
infections. Asian markets are trading lower on Friday after an overnight plunge
on Wall Street amid fears of a second wave resurgence of the coronavirus
pandemic. Indian markets ended sharply lower on Thursday on the back of weak
global cues after the US Federal Reserve indicated that the US economy will
shrink 6.5 per cent in 2020. Today, the markets are likely to make gap-down
opening following a mammoth plunge on the Wall Street coupled with rising
coronavirus cases in India. With over 10,000 cases in a day, India has taken
over the UK as the fourth-most-affected nation by number of coronavirus cases.
The country's count of people infected by the highly contagious virus now
stands at 298,283, according to data compiled by Worldometer. India's death
toll has also seen a sharp spike, with 390 fatalities being registered in a
single day taking the total to 8,500. Market participants will keep a keen eye
on industrial production data for April and CPI inflation for May which are due
later in the day. Investors will be eyeing the 40th meeting of the GST Council,
headed by Finance Minister Nirmala Sitharaman and comprising state
counterparts, to be held later in the day. The GST Council is likely to discuss
the impact of COVID-19 on tax revenues and may decide on the framework for
compensation payout to states. There will be some cautiousness with United
Nations Conference on Trade and Development's (UNCTAD) statement that the value
of international trade in goods declined around 5% in the first quarter of 2020
and is expected to decline further by 27% in the ongoing quarter with trade in
many developing countries projected to nosedive due to the unprecedented
effects of the pandemic. However, some respite may come later in the day with
Niti Aayog vice-chairman Rajiv Kumar's statement that India's economy will
recover after the containment of the COVID-19 pandemic and the country will
maintain its sound net external position. Some support may also come with
Commerce and Industry Minister Piyush Goyal's statement that the country's
exports are drastically improving with the outbound shipments contracting 36
percent in May as compared to 60 percent in April. There will be some buzz in
the coal stocks as Prime Minister Narendra Modi will launch the auction of coal
mines for commercial mining in the country on June 18. Telecom and banking
stocks will be in focus as the Supreme Court termed as totally impermissible
the demand by Department of Telecom (DoT) for dues of Rs 4 lakh crore in
Adjusted Gross Revenue (AGR) from the public sector undertakings (PSUs) and
said DoT must consider withdrawing it.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,902.00
|
9,820.68
|
10,047.68
|
BSE Sensex
|
33,538.37
|
33,272.73
|
34,011.70
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
917.30
|
177.15
|
172.20
|
186.25
|
Indusind Bank
|
786.70
|
523.15
|
502.67
|
546.07
|
Tata Motors
|
554.89
|
106.15
|
103.72
|
109.87
|
GAIL (India)
|
505.76
|
95.55
|
92.10
|
101.60
|
Axis Bank
|
455.63
|
413.45
|
402.92
|
429.77
|
Dr. Reddy's Laboratories has completed the acquisition of select divisions of Wockhardt's branded generics business in India.
NTPC's board has approved Rebate of Rs 1,363 crore on the capacity charges billed during the lock-down period to DISCOMs on account of COVID-19, in financial year 2020-21.
UPL's subsidiary company -- UPL Corporation, Mauritius, has successfully placed 10-year dollar-denominated senior unsecured notes for an aggregate amount of $500 million.
SBI is planning to divest over 2% stake for at least Rs 1,522.50 crore in its subsidiary SBI Life to comply with the minimum public shareholding norms.