Extending gains for the second
consecutive session, Indian equity benchmarks ended Wednesday's session near
day's high point with gains of over two percent, on sustained buying, with
Sensex and Nifty closing above their crucial 30,800 and 9,050 levels,
respectively. Domestic bourses were trading on a positive note since the
beginning, as traders got encouragement 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. Traders took a note of Fitch Ratings' statement that support
measures announced by the government for non-banking finance companies (NBFCs)
seek to ease borrower strain and boost funding conditions for NBFIs, but
successful implementation will be the key. Domestic indices extended their
upside in last hour of trade, tracking gains in Healthcare, Consumer Durables
and Oil & Gas stocks despite weak cues from global markets. Traders paid no
heed towards Crisil research wing's report stating that eight states most
affected by the COVID-19 pandemic account for over 60 per cent of the Gross
Domestic Product (GDP) and the extended restrictions will slam the economy
harder. The eight states, which include Maharashtra, Gujarat and Tamil Nadu,
among others also account for 58 per cent of the employment. The share of gross
state value added (GSVA) from these states is 64 per cent in agriculture, 63
per cent in industry and 53 per cent in services. Traders even overlooked 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. Finally, the BSE Sensex gained 622.44
points or 2.06% to 30,818.61, while the CNX Nifty was up by 187.45 points or
2.11% to 9,066.55.
The US markets ended higher on
Wednesday on continued optimism about an economic recovery as states begin to
reopen following the coronavirus-induced lockdowns. Early indications suggest
the states that have reopened have not seen a spike in coronavirus cases, which
has led to hopes the economy may rebound more quickly than many street predict.
Positive sentiment was also generated in reaction to earnings news from Lowe's
(LOW), with the home improvement retailer reporting first quarter results that
exceeded street estimates on both the top and bottom lines. At the same time,
the minutes of the Federal Reserve's latest monetary policy meeting highlighted
concerns about the extraordinary amount of uncertainty and considerable risks
to economic activity created by the coronavirus pandemic. The minutes said
participants at the late-April meeting discussed several alternative scenarios
with regard to the behavior of economic activity in the medium term that all
seemed about equally likely. The Fed said these scenarios differed in the
assumed length of the pandemic and the consequent economic disruptions.
Meanwhile, traders largely shrugged off a report raising doubts about Moderna's
(MRNA) potential coronavirus vaccine.
Crude oil futures ended higher on
Wednesday, extending previous sessions' gains, on the back of a second-straight
weekly decline in domestic crude supplies and a drop in stocks at the Cushing,
Okla. storage hub. The Energy Information Administration (EIA) reported that US
crude inventories fell by 5 million barrels for the week ended May 15. That
compared with a forecast by S&P Global Platts for an average increase of
2.4 million barrels. The American Petroleum Institute on Tuesday reported a
decline of 4.8 million barrels. The EIA data showed crude stocks at the Cushing
storage hub fell by about 5.5 million barrels for the week, easing concerns
over tightening storage space. Crude oil futures for July rose $1.53 or 4.8
percent to settle at $33.49 a barrel on the New York Mercantile Exchange. July
Brent crude surged $1.10 or 3.2 percent to settle at $35.75 a barrel on
London's Intercontinental Exchange.
Indian rupee ended weaker against
dollar on Wednesday, on emergence of demand for the greenback from importers.
Investors' sentiment remained fragile amid concerns over the impact of
coronavirus outbreak on the domestic as well as global economy. Some pessimism
also came as the Crisil research wing's report stating that eight states most
affected by the COVID-19 pandemic account for over 60 per cent of the Gross
Domestic Product (GDP) and the extended restrictions will slam the economy
harder. However, gains in domestic equity markets provided some support to the
rupee, keeping the downside in check. On the global front, euro edged higher on
Wednesday as a Franco-German proposal for a common fund that could move Europe
closer to a fiscal union underpinned demand for the common currency, while some
risk aversion in currency markets also boosted the Swiss franc. Finally, the
rupee ended at 75.80, 14 paise weaker from its previous close of 75.66 on
Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5085.67 crore against gross selling of Rs 6419.83 crore, while
in the debt segment, the gross purchase was of Rs 673.79 crore with gross sales
of Rs 1557.48 crore. Besides, in the hybrid segment, the gross buying was of Rs
7.71 crore against gross selling of Rs 5.65 crore.
The US markets ended higher on
Wednesday amid optimism about an economic recovery as states begin to reopen
following the coronavirus-induced lockdowns. Asian markets are trading mixed on
Thursday as China's benchmark lending rate was left unchanged. Indian markets
ended higher for a second straight session on Wednesday, with rate-sensitive
financials, auto and realty stocks leading the surge despite rising coronavirus
cases in the country. Today, the markets are likely to make flat-to-negative
start amid mixed Asian cues coupled with rising coronavirus cases in India.
With over 5,000 cases in a single day, the total coronavirus count in the
country has risen to 112,028, according to Worldometer data. Traders will be
concerned as domestic rating agency Icra warned of a deep recession as it
drastically lowered FY21 growth forecast for India to minus 5 percent, citing
the very modest fiscal support, extension of the nationwide lockdown and
looming labour shortage. The agency also sharply revised downwards the growth
contraction in Q1 to 25 percent as against the previous forecast of 16-20
percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously,
which implies a recession. Traders will also react to the Reserve Bank of
India's (RBI) data showing that India's overseas direct investment (ODI) in
April dipped 62 per cent to $976.14 million. Some support may come later in the
day as the union cabinet cleared Rs 3 lakh crore micro, small and medium
enterprise (MSME) funding scheme to mitigate the economic distress being faced
by the small businesses in the light of the COVID-19 pandemic. Traders may take
note of the RBI's data showing that bank credit rose 6.52 percent year-on-year
to Rs 102.52 lakh crore, while deposits grew 10.64 percent to Rs 138.50 lakh
crore in the fortnight ended May 8. There will be some buzz in the aviation
stocks with report that India will resume domestic flights in a calibrated
manner from May 25 as passengers follow prevention guidelines for coronavirus.
Coal stocks will be in focus as the government approved a methodology for
commercial mining of coal on revenue sharing basis. There will be some reaction
in insurance stocks with report that companies across sectors have been
struggling to work out ways to cut costs to counter the impact of coronavirus
(COVID-19). Life insurance companies for one are hoping to save on costs by
reducing branch presence.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,066.55
|
8,930.00
|
9,148.45
|
BSE Sensex
|
30,818.61
|
30,358.14
|
31,078.70
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
661.78
|
153.40
|
151.28
|
155.38
|
ICICI Bank
|
422.39
|
305.65
|
299.35
|
310.10
|
Tata Motors
|
363.52
|
83.45
|
81.30
|
85.00
|
Bharti Airtel
|
357.44
|
594.05
|
584.43
|
607.83
|
Axis Bank
|
307.22
|
362.50
|
352.90
|
369.20
|
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