Extending northward journey for
fourth straight session, Indian equity benchmarks ended Monday's session with
healthy gains of over two and half percent, as the country geared up to further
open its economy after a months-long lockdown to curb the spread of the
coronavirus pandemic. Sensex and Nifty closed above their crucial 33,300 and
9,800 levels, respectively. Key indices made gap-up opening, tracking positive
cues from the Asian peers. Sentiments remained up-beat with Commerce minister
Piyush Goyal's statement that most startups will be eligible for additional
liquidity and funding under the credit and funding support announced for MSMEs
under the Aatmanirbhar Bharat Abhiyan package. Key indices extended their
upside in afternoon session, taking support from report that the Department for
Promotion of Industry and Internal Trade (DPIIT) will very soon put a draft
ecommerce policy in the public domain to seek views and comments. It said the
ecommerce is a fast emerging sector and it is difficult to predict where it
will go in the next couple of years. However, markets trimmed some of their
initial gains in late hour of trade, as some anxiety remained among traders
with the National Statistical Office (NSO) data showing that India's economic
growth slipped to 3.1% in the January-March quarter of 2019-20 compared to
growth of 5.7% in the corresponding quarter of 2018-19 showing impact of
COVID-19 pandemic. In 2019-20, the Indian economy grew by 4.2% against 6.1%
expansion in 2018-19. Also, the output of eight core infrastructure industries
plunged by a record 38.1% in April as the nationwide lockdown to contain
coronavirus pandemic caused a substantial loss of production across sectors.
Finally, the BSE Sensex gained 879.42 points or 2.71% to 33,303.52, while the
CNX Nifty was up by 245.85 points or 2.57% to 9,826.15.
The US markets ended higher on
Monday, on hopes that the worst of the economic damage inflicted by the
COVID-19 pandemic may have passed, even as states deployed National Guard units
to major US cities to help quell civil unrest. All 50 states have embarked on
some stage of reopening from forced shutdowns due to the pandemic. The strength
on markets came following the release of a report from the Institute for Supply
Management (ISM) showing US manufacturing activity contracted at a slower rate
in the month of May. The ISM said its Purchasing Managers Index rose to 43.1 in
May from 41.5 in April, coming in just below street estimates for a reading of
43.6. While the index rebounded from its lowest level since April of 2009, a
reading below 50 still indicates a contraction in manufacturing activity.
Nonetheless, Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee,
said the latest figure indicates expansion in the overall economy after April's
contraction. Meanwhile, a report released by the Commerce Department showed a
sharp pullback in US construction spending in the month of April, the decrease
was much smaller than street had expected. The Commerce Department said
construction spending tumbled by 2.9 percent to an annual rate of $1.346
trillion in April after inching up by less than a tenth of a percent to a
revised $1.387 trillion in March. Street had expected construction spending to
show an even more substantial 6.5 percent nosedive following the 0.9 percent
increase originally reported for the previous month. The steep drop in total
construction spending reflected significant decreases in spending on both
private and public construction.
Crude oil futures ended
marginally lower on Monday as Beijing-Washington tensions raised concerns over
the prospects for crude demand. Beijing has warned Washington of retaliation
after US President Donald Trump announced that the United States would ban some
Chinese graduate students and start reversing Hong Kong's special status in
customs and other areas. However, Brent crude oil prices finished higher on the
heels of a report that major oil producers may meet earlier than previously
planned, and discuss an extension to current crude output cuts. Crude oil
futures for July lost 5 cents or 0.1 percent to settle at $35.44 a barrel on
the New York Mercantile Exchange. However, August Brent crude added 48 cents or
1.3 percent to settle at $38.32 a barrel on London's Intercontinental Exchange.
Indian rupee has lost most of the
gains but still managed to end marginally higher against dollar on Monday, on
persistent selling of the American currency by exporters. Traders took some
support with Commerce minister Piyush Goyal's statement that most startups will
be eligible for additional liquidity and funding under the credit and funding
support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package. Weak
American currency and strong domestic equity markets also supported the local
unit. However, gains remain capped as
the ministry of Commerce and Industry in its latest data has showed that the
growth of eight core infrastructure industries have plunged by a record 38.1
percent in April 2020 as compared to same period of last year, as the
nationwide lockdown to contain coronavirus pandemic caused a substantial loss
of production across sectors. On the global front, dollar slipped on Monday as
investors looked past unrest in the United States to the global economic
recovery from the coronavirus and hoped for an easing in Sino-U.S. tensions.
Finally, the rupee ended at 75.54, 8 paise stronger from its previous close of
75.62 on Friday.
The FIIs as per Monday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 25171.78 crore against gross selling of Rs 23967.09 crore,
while in the debt segment, the gross purchase was of Rs 1100.89 crore with
gross sales of Rs 955.01 crore. Besides, in the hybrid segment, the gross
buying was of Rs 8.09 crore against gross selling of Rs 3.24 crore.
The US markets ended higher on
Monday as investors' hopes for a swift economic rebound offset nationwide
protests and escalating tensions between the US and China. Asian markets are
trading mostly in green on Tuesday following the positive cues overnight from
Wall Street. Indian markets ended higher on Monday and extended their gains for
the fourth straight session, as firm global cues as well as enthusiasm over
easing of lockdown curbs helped investors shrug off weak GDP data. Today, the
markets are likely to make a cautious start amid rising coronavirus cases in
India. The country's total number of coronavirus cases is nearing the 200,000
mark, even as the country is in the midst of a watered-down Lockdown 5.0, or
so-called India Unlock 1.0. Traders will be concerned as Moody's Investors
Service (Moody's) downgraded the Government of India's foreign-currency and
local-currency long-term issuer ratings to Baa3 from Baa2. The rating agency
has also downgraded India's local-currency senior unsecured rating to Baa3 from
Baa2, and its short-term local currency rating to P-3 from P-2. The outlook
remains negative. There will be some cautiousness with the Centre for
Monitoring Indian Economy (CMIE) data showing that India's unemployment rate in
May rose to 23.48 per cent, marginally lower from 23.52% in April, reflecting
the impact of coronavirus pandemic. Though, some support may come later in the
day with the India Meteorological Department's (IMD) statement that the
Southwest monsoon arrived in India on June 01 with heavy rainfall over several
places in Kerala, marking the commencement of the four-month long rainfall
season. It also upgraded its forecast for 2020 rainfall to 102% of the Long
Period Average (LPA), from the 100% in April. The forecast is with a model
error of plus and minus of 4%. Meanwhile, the GST Council in its next meeting
will discuss waiver of late fee for non-filing of GST returns for August 2017
to January 2020 period. Besides, the Union Cabinet approved an increase in
minimum support prices (MSP) of 14 Kharif crops. There will be some buzz in the
MSMEs stocks with report that in order to support stressed micro, small and
medium enterprises (MSMEs), the Centre rolled out a Rs 20,000 crore distressed
asset fund to extend support to promoters of distress units. Non-banking
finance companies (NBFC) stocks will be in focus Moody's report that the
Reserve Bank of India's decision to extend the moratorium on loan repayment by
three more months will be credit negative for NBFC.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,826.15
|
9,711.53
|
9,936.18
|
BSE Sensex
|
33,303.52
|
32,895.44
|
33,692.72
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
927.42
|
170.05
|
165.13
|
173.18
|
Tata Motors
|
710.81
|
89.55
|
87.97
|
91.17
|
Axis Bank
|
442.53
|
396.95
|
389.83
|
406.78
|
ICICI Bank
|
440.26
|
339.25
|
334.30
|
346.10
|
Bharti Airtel
|
392.88
|
559.05
|
552.25
|
563.75
|
Dr. Reddy's Laboratories has received the EIR from the US Food and Drug Administration for API Srikakulam Plant (SEZ), Andhra Pradesh.
L&T's construction arm -- L&T Construction has transformed established or under-construction healthcare units into COVID-19 care facilities across India.
APSEZ has raised Rs 100 crore by allotment of 1,000 Rated, Listed, Secured, Redeemable, NCDs of the face value of Rs 10 lakh each on private placement basis.
Maruti Suzuki India has posted total sales of 18,539 units in May 2020, including 13,865 units in Domestic market and sales of 23 units to other OEM.