Indian equity benchmarks remained
under selling pressure throughout the day and ended with losses of over two
percent on Thursday, tracking heavy sell off in overseas markets as fears of a
second wave of infections overshadowed prospects of re-opening economy. Markets
made gap-down opening, despite a slew of announcements made by Finance Minister
Nirmala Sitharaman targeting various sectors. The FM doled out measures worth
Rs 5.94 trillion, focusing largely on MSMEs, NBFCs, power discoms, and real
estate sector, with more such announcements to follow throughout the week. The
sentiments remained weak 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. Local barometer gauges added losses in
last hour of trade, as sentiments on the street weakened further 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. The
street remained disappointed with Fitch Solutions stating that despite
additional funding, the continued lack of medical investment and healthcare
infrastructure will present challenges to mounting an effective response in
India against COVID-19 pandemic. With 8.5 hospital beds per 10,000 citizens and
eight physicians per 10,000, the country's healthcare sector is not equipped
for such a crisis. Finally, the BSE Sensex fell 885.72 points or 2.77% to 31,122.89,
while the CNX Nifty was down by 240.80 points or 2.57% to 9,142.75.
The US markets ended higher on
Thursday, snapping a two-session losing streak, as traders once again expressed
optimism about states partially reopening amid the coronavirus pandemic. Adding
to the positive sentiment, New York Governor Andrew Cuomo expanded the state's
phased reopening to five regions. The regions in upstate and central New York
can resume manufacturing, construction and agricultural operations as well
curbside pickup at retail stores beginning on Friday. Besides, banking stocks
helped lead the way back to the upside, with the KBW Bank Index skyrocketing by
3.9 percent after falling as much as 3.8 percent in early trading. The recovery
by banking stocks may partly reflect bargain hunting, as traders picked up the
stocks at reduced levels after the index hit its lowest intraday level in well
over a month. On the economic data, a report released by the Labor Department
showed steep drops in both import and export prices in the US in the month of
April. The Labor Department said import prices plunged by 2.6 percent in April
after tumbling by a revised 2.4 percent in March. Street had expected import
prices to plummet by 3.1 percent compared to the 2.3 percent slump originally
reported for the previous month. Meanwhile, while the Labor Department released
a report showing a continued decline in first-time claims for US unemployment
benefits in the week ended May 9, the number of new claims still came in well
above street estimates. The report said initial jobless claims fell to 2.981
million, a decrease of 195,000 from the previous week's revised level of 3.176 million.
Street had expected jobless claims to tumble to 2.5 million from the 3.169
million originally reported for the previous week.
Crude oil futures ended sharply
higher on Thursday on hopes energy demand will see an increase as some states
in America are opening up their businesses. However, the Energy Information
Administration (EIA) in a monthly report said the COVID-19 lockdowns will
continue to sharply curtail crude demand in May, while producers implement the
largest monthly production cut on record. The IEA said world demand for crude
will drop by 21.5 million barrels a day this month, while crude-producing
nations and companies slash output by a spectacular 12 million barrels a day.
For 2020, the IEA now looks for global crude demand to fall by 8.6 million
barrels a day versus its April forecast for a fall of 9.3 million barrels a
day. Crude oil futures for June surged $2.27 or 9 percent to settle at $27.56 a
barrel on the New York Mercantile Exchange. July Brent crude rose $1.94 or 6.7
percent to settle at $31.13 a barrel on London's Intercontinental Exchange.
Indian rupee ended weaker against
the US dollar on Thursday, amid weakness in domestic equity markets and
strength in the dollar overseas. Investors remain 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. However,
losses were limited as traders found some support with report that Finance
Minister Nirmala Sitharaman unveiled the first tranche of the mega economic
stimulus package aimed at uplifting the economy. On the global front, dollar
climbed towards a three-week high on Thursday as risk appetite deteriorated
broadly after Federal Reserve Chairman Jerome Powell dismissed speculation
about negative interest rates. Finally, the rupee ended at 75.56, 10 paise
weaker from its previous close of 75.46 on Wednesday.
The FIIs as per Thursday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 6489.62 crore against gross
selling of Rs 6358.57 crore, while in the debt segment, the gross purchase was
of Rs 1161.48 crore with gross sales of Rs 1543.53 crore. Besides, in the
hybrid segment, the gross buying was of Rs 20.33 crore against gross selling of
Rs 21.59 crore.
The US markets ended in green on
Thursday as traders once again expressed optimism about states partially
reopening amid the coronavirus pandemic. Asian markets are trading mostly lower
on Friday ahead of the release of Chinese economic data expected later in the
day. Indian markets ended sharply lower on Thursday as coronavirus worries
persisted on mounting concerns that the infection rate may climb. Today, the
markets are likely to get flat-to-positive start amid rally on Wall Street
overnight coupled with the second tranche of relief measures by government.
Finance Minister Nirmala Sitharaman has announced that the government will
supply food to eight crore migrant workers in the country for the next two
months. This along with promises of affordable housing and loans for street
vendors. Besides, ruling out any impact of stimulus on the price situation,
Chief Economic Advisor K V Subramanian said the COVID-19 pandemic has severely
dented the demand for non-essential or discretionary goods, creating
deflationary conditions. Though, traders may be concerned with report that the
total number of coronavirus cases in India has been rising constantly. The
country now is just a whisker from overtaking China - from where the virus
originated. India's tally of cases now stands at 81,997 and 2,649 people have
died of infections so far, according to Worldometer data. There may be some
cautiousness as SBI research report stated that with the government's Rs 20
lakh crore stimulus package, the country's fiscal deficit is likely to be more
than double to 7.9% in the current financial year. There will be some buzz in
the power stocks as Finance minister Nirmala Sitharaman announced a one-time
emergency fund of Rs 90,000 crore to help state-owned distribution companies
(discoms) pay their dues to power generating companies (gencos) and
transmission companies (transcos). There will be some reaction in restaurants
industry related stocks with Crisil Research's report that the COVID-19
pandemic is likely to cut 40-50% revenue of the country's organised dine-in
restaurants this financial year. 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
|
9,142.75
|
9,081.30
|
9,242.65
|
BSE Sensex
|
31,122.89
|
30,906.71
|
31,485.00
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
481.37
|
167.95
|
166.38
|
170.63
|
Tata Motors
|
463.42
|
83.80
|
82.47
|
85.22
|
NTPC
|
391.17
|
89.35
|
86.73
|
92.73
|
Vedanta
|
385.73
|
89.15
|
87.33
|
91.38
|
ICICI Bank
|
340.00
|
327.40
|
323.87
|
332.72
|
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Maruti Suzuki India has received approval for supply of derivative of compact SUV Vitara Brezza to Toyota Kirloskar Motor which will then sell the vehicle under its own brand name.
Infosys has expanded strategic collaboration with NICE Actimize, a NICE business and a leader in Autonomous Financial Crime Management.