Snapping two-day losing streak,
Indian equity benchmarks ended Wednesday's session on higher note with gains of
over two percent, led by gains in banking and financial sectors. Domestic
bourses opened with massive gap-up, as Prime Minister (PM) has announced a
stimulus package totalling Rs 20 lakh crore, with an aim to rescue the Indian
economy reeling under the impact of coronavirus. This amounts to nearly 10
percent of India's Gross Domestic Product (GDP). PM said that economic package
is for all classes of society, for all Indians and industry. The markets,
nevertheless, gave up greater than half of these positive aspects within the
first hour of trade, amid heavy sell off in global markets. Some concern also
came as India's industrial output, measured in Index of Industrial Production
(IIP), contracted by 16.7% in March 2020 mainly on account of poor show by
mining, manufacturing and electricity sector due to the nationwide lockdown.
The IIP had grown by 2.7% in March 2019. The IIP in the last fiscal contracted
by 0.7% from 3.8% expansion in the 2018-19. But, domestic bourses still traded
steady in the afternoon session, with gains of over 2 percent each, as
sentiments remained up-beat with the World Economic Forum (WEF) stating that
India has moved up two positions to rank 74th on a global Energy Transition
Index with improvements on all key parameters of economic growth, energy
security and environmental sustainability. Markets held on to gains in late
trade, as the New Development Bank of the BRICS countries has fully disbursed
$1 billion emergency assistance loan to India to help it contain the spread of
COVID-19 and reduce human, social and economic losses caused by the coronavirus
pandemic. Finally, the BSE Sensex gained 637.49 points or 2.03% to 32,008.61,
while the CNX Nifty was up by 187.00 points or 2.03% to 9,383.55.
The US markets ended lower on
Wednesday, extending their previous session's losses, as traders reacted to
Federal Reserve Chairman Jerome Powell's comments about the economic outlook.
Powell warned the coronavirus crisis raises longer-term concerns that could
result in an extended period of low productivity growth and stagnant incomes.
Powell said the central bank may take additional steps to support the economy
but is not considering adopting negative interest rates. Powell said at the
Fed, we will continue to use our tools to their fullest until the crisis has
passed and the economic recovery is well under way. The Fed Chief noted the
economic outlook is both highly uncertain and subject to significant downside
risks and suggested it may be necessary for Congress to provide additional
stimulus. On the economic data front, the Labor Department released a report
showing US producer prices plunged by much more than expected in the month of
April. The Labor Department said its producer price index for final demand
tumbled by 1.3 percent in April after edging down by 0.2 percent in March.
Street had expected prices to drop by 0.5 percent. The bigger than expected
decrease in producer prices came as energy prices nosedived by 19.0 in April
after plummeting by 6.7 percent in March. Excluding food and energy prices,
core producer prices fell by a much more modest 0.3 percent in April after
inching up by 0.2 percent in the previous month. Core prices were expected to
be unchanged.
Crude oil futures settled lower
on Wednesday despite data showing a drop in US stockpiles as well as a decline
in output last week. The Energy Information Administration (EIA) reported that
US crude inventories fell by 700,000 barrels for the week ended May 8. That
marked the first weekly decline in 16 weeks and defied a forecast by S&P
Global Platts for an average increase of 4.8 million barrels. The American
Petroleum Institute on Tuesday reported a climb of 7.6 million barrels. The EIA
data also showed stocks in the storage at Cushing, Oklahoma, fell by 3 million
barrels last week. The EIA data showed. Total US oil production fell by 300,000
barrels a day to 11.6 million barrels a day. Crude oil futures for June fell 49
cents or 1.9 percent to settle at $25.29 a barrel on the New York Mercantile
Exchange. July Brent crude dropped 79 cents or 2.6 percent to settle at $29.19
a barrel on London's Intercontinental Exchange.
Indian rupee gave up most of its
initial gains but managed to end marginally higher against dollar on Wednesday
on the back of mild sale of dollars by banks and exporters. Traders took some
support as Prime Minister Narendra Modi announced a stimulus package totalling
Rs 20 lakh crore to rescue the economy reeling under the impact of coronavirus.
This amounts to nearly 10% of India's GDP. This economic package will focus on
areas like land, labour, liquidity and law. However, gains remain capped as
India's industrial output, measured in Index of Industrial Production (IIP),
contracted by 16.7% in March 2020 mainly on account of poor show by mining,
manufacturing and electricity sector due to the nationwide lockdown. On the
global front, dollar held below a three-week high on Wednesday ahead of a
speech by Federal Reserve Chairman Jerome Powell on growing speculation that
the United States could introduce negative interest rates. Finally, the rupee
ended at 75.46, 5 paise stronger from its previous close of 75.51 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 6157.45 crore against gross selling of Rs 7996.58 crore, while
in the debt segment, the gross purchase was of Rs 448.84 crore with gross sales
of Rs 4733.15 crore. Besides, in the hybrid segment, the gross buying was of Rs
4.95 crore against gross selling of Rs 7.18 crore.
The US markets ended lower on
Wednesday as Powell warned the coronavirus crisis raises longer-term concerns
that could result in an extended period of low productivity growth and stagnant
incomes. Asian markets are trading in red on Thursday following overnight fall
on Wall Street. Indian markets ended higher with notable gains on Wednesday
after Prime Minister Narendra Modi announced a Rs 20 lakh crore package --
nearly 10% of India's GDP in a big push to revive the economy. Today, the markets
are likely to make negative start tracking weakness in global markets.
Investors will be eyeing the April wholesale price index (WPI) inflation data
to be released later in the day. There will be some cautiousness with former
chief statistician Pronab Sen fears that the country's gross domestic product
(GDP) will contract astronomically by nine per cent in 2020-21 if the
government does not go beyond the package announced by finance minister Nirmala
Sitharaman. Traders will be concerned as the UN slashed India's projected
growth rate to 1.2% in 2020 and forecast that the global economy will contract
sharply by 3.2% as the COVID-19 pandemic paralyses the world, sharply
restricting economic activities, increasing uncertainties and unleashing a
recession unseen since the Great Depression of the 1930s. Though, some respite
may come later in the day as Finance Minister Nirmala Sitharaman unveiled the
first tranche of the mega economic stimulus package aimed at uplifting the
economy. In a big push to revive the economy, the FM announced 15 schemes for
MSMEs, HFCs, NBFCs, MFI, Discoms, RERA and on EPF. Traders may be getting some
encouragement as the Reserve Bank of India (RBI) said a scheme providing
interest subsidy for post and pre-shipment export credit has been extended by a
year till March 31, 2021, a move which would provide relief to exporters.
Besides, in a major initiative, the government has extended the due date for
filing belated income tax returns (ITRs) for the year 2019-2020 from July 31,
2020 and October 31, 2020 to November 30, 2020. Meanwhile, the World Economic
Forum (WEF) said India has moved up two positions to rank 74th on a global
Energy Transition Index with improvements on all key parameters of economic
growth, energy security and environmental sustainability. There will be some
buzz in the healthcare stocks with ICRA's report that following the spread of
Covid-19 pandemic, the revenues of healthcare entities is likely to fall by
15-20 per cent in FY21. Sugar stocks will be in focus amid reports that the
Centre has asked sugar mills to divert the excess cane and sugar for the
production of fuel grade ethanol. There will be some reaction in agriculture
stocks as IMD said monsoon is expected to hit Indian shores in mid-May as a low
pressure area has begun to form over the southeast Bay of Bengal and adjoining
south Andaman Sea. There will be some earnings announcements too to keep the
markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,383.55
|
9,294.93
|
9,528.33
|
BSE Sensex
|
32,008.61
|
31,658.53
|
32,602.09
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
1,458.42
|
90.25
|
86.52
|
95.97
|
State Bank of India
|
817.22
|
174.10
|
170.22
|
178.27
|
ICICI Bank
|
728.18
|
338.05
|
330.77
|
346.87
|
Tata Motors
|
680.86
|
87.20
|
84.80
|
91.05
|
Axis Bank
|
482.06
|
414.00
|
403.58
|
420.43
|
Cipla has signed a non-exclusive licensing agreement with Gilead Sciences, Inc. for the manufacturing and distribution of the investigational medicine Remdesivir.
Kotak Mahindra Bank has reported a fall of 6.53% in its consolidated net profit at Rs 1905.18 crore for Q4FY20 as compared to Rs 2038.27 crore for Q4FY19.
Infosys has been selected by Global Foundries -- the world's leading specialty foundry, as its partner for the company's Digital Transformation program.
Vedanta's one of the members of the promoter and promoter group -- Vedanta Resources has expressed its intention to acquire all fully paid-up equity shares of the company.