Bringing up fifth-day of gains,
Indian equity benchmarks finished Tuesday's session on a higher note, driven by
strong buying across Realty and Banking stocks amid positive cues from global
markets. After opening on a tepid note, key indices gained traction and traded
in fine fettle, as investors took encouragement 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%.
Sentiments also remained up-beat as the Centre rolled out Rs 20,000 crore
distressed asset fund to extend support to promoters of distress units, in
order to support stressed micro, small and medium enterprises (MSMEs). Buying
got intensified in the late afternoon session, as sentiments remained buoyant
with Prime Minister Narendra Modi's statement that India will definitely get
its economic growth back as the government continues to pursue various reforms.
He said the government has taken tough steps to fight the coronavirus pandemic
and has also taken care of the economy. Market participants paid no heed
towards report that Moody's has downgraded the Government of India's
foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2,
saying there will be challenges in implementation of policies to mitigate risks
of a sustained period of low growth and deteriorating fiscal position. Finally,
the BSE Sensex gained 522.01 points or 1.57% to 33,825.53, while the CNX Nifty
was up by 152.95 points or 1.56% to 9,979.10.
The US markets ended higher on
Tuesday, extending the upward move seen in the previous session, amid optimism
about an economy recovery as businesses reopen following the
coronavirus-induced shutdown. Traders have largely ignored the mass protests
across the country in response to the death of George Floyd at the hands of
Minneapolis police officers. The protests have turned violent in many
instances, but traders appear to believe that the unrest will be curtailed
before having any meaningful impact on the economy. Meanwhile, President Donald
Trump reiterated threats to deploy military troops across cities facing
protests if governors and local officials prove unable to contain violent
demonstrations. Energy stocks helped lead the markets higher, benefiting from a
sharp increase by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil
Service Index soared by 4.1 percent, the NYSE Arca Oil Index spiked by 3.3
percent and the NYSE Arca Natural Gas Index shot up by 3.1 percent. Substantial
strength was also visible among steel stocks, as reflected by the 3.2 percent
jump by the NYSE Arca Steel Index. The index ended the session at its best
closing level in nearly three months.
Crude oil futures settled sharply
higher on Tuesday, with West Texas Intermediate (WTI) and Brent crude both
marking the highest settlements for front-month contracts since March 6,
supported by reports that major crude producers may agree to extend output cuts
scheduled to taper at the end of June. The Organization of the Petroleum
Exporting Countries (OPEC) and, notably, major producer Russia, part of a group
known as OPEC+, are now expected to extend their output cuts of 9.7 million
barrels per day. Further, the crude market also has been bolstered by hope that
business reopening across the world from the COVID-19 pandemic could help to
drive demand for oil and other crude byproducts. Crude oil futures for July rose
$1.37 or 3.9 percent to settle at $36.81 a barrel on the New York Mercantile
Exchange. August Brent crude surged $1.25 or 3.3 percent to settle at $ 39.57 a
barrel on London's Intercontinental Exchange.
Rising for the third consecutive
day, Indian rupee ended higher against dollar on Tuesday, on continued selling
of the American currency by exporters and banks. Sentiments remained buoyant
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. The
rupee also derived its strength from strong gains in the local equity markets
as well as dollar's weakness against some currencies overseas. Traders
overlooked report that Moody's has downgraded the Government of India's
foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2.
On the global front, pound rose to a four-week high against the dollar on Monday,
as a risk-on mood in global markets prompted by hopes for an economic recovery
caused the safe-haven dollar to weaken. Finally, the rupee ended at 75.36, 18
paise weaker from its previous close of 75.54 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 13182.18 crore against gross selling of Rs 6249.09 crore,
while in the debt segment, the gross purchase was of Rs 1402.18 crore with
gross sales of Rs 1229.06 crore. Besides, in the hybrid segment, the gross
buying was of Rs 18.70 crore against gross selling of Rs 18.06 crore.
The US markets ended higher on
Tuesday amid optimism about an economy recovery as businesses reopen following
the coronavirus-induced shutdown. Asian markets are trading in green on
Wednesday following rally on Wall Street overnight. Indian markets ended higher
for fifth straight day on Tuesday amid optimism over gradual easing of the
lockdown curbs coupled with positive cues from global markets. Today, the
markets are likely to make positive start tracking firm global cues. Investors
will be eyeing the PMI Services data for May to be announced later in the day.
Traders will be getting some encouragement as Prime Minister Narendra Modi
assured India Inc that growth in the economy will return soon as the government
continues to pursue multiple reforms. He added that with unlock phase-1 India
has already begun getting its growth back. Some support will also come as the
World Bank urged countries to go for comprehensive policies to boost long-term
growth along with short term measures to address health emergencies and secure
core public services in the wake of the coronavirus crisis, amid indications
that 60 million people could be pushed into extreme poverty in 2020. Though,
there may be some cautiousness with the data compiled by Worldometer showing
that India has seen a surge of over 8,500 cases in a day, taking its total
number of coronavirus cases to 207,191. The country's death toll now stands at
5,829. Traders may be concerned with Former finance secretary Subhash Chandra
Garg's statement that the Indian economy will shrink by 10% or Rs 20 lakh crore
in the ongoing fiscal, the first contraction in over 40 years, due to a faulty
COVID lockdown. There will be some buzz in the sugar stocks with industry body
ISMA's statement that with further relaxations in COVID-19 lockdown rules,
sugar demand in India has started picking up and will further improve with
opening of hotels and restaurants. NBFCs stocks will be in focus with ICRA's
report that the extension of moratorium on loan repayments till August by the
Reserve Bank of India will impact non-banking financial companies' (NBFCs)
collections and affect their liquidity conditions. There will be some reaction
in steel sector stocks with India Ratings' (IndRa) statement that as
construction activities were impacted due to the extended lockdown, onset of
monsoon and mass migration of labourers, operating profit or EBITDA of steel
producers is expected to decline by 20-30 percent in the current fiscal due to
lower demand and price realisation.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,979.10
|
9,870.23
|
10,041.78
|
BSE Sensex
|
33,825.53
|
33,462.34
|
34,027.68
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
1,254.11
|
96.50
|
91.73
|
99.28
|
State Bank of India
|
704.22
|
170.25
|
167.87
|
171.97
|
ICICI Bank
|
475.59
|
348.40
|
337.27
|
354.77
|
Zee Entertainment
Enterprises
|
406.58
|
198.95
|
188.57
|
206.07
|
Axis Bank
|
375.10
|
410.10
|
396.10
|
419.55
|
NTPC has incorporated a Joint Venture Company with East Delhi Municipal Corporation with equity participation of 74:26 respectively.
Bajaj Auto has reported 70 per cent decline in total sales to 127128 units in May as against 419235 in the same month last year.
HCL Technologies and Temenos have signed exclusive strategic agreement for non-financial services enterprises.
JSW Steel has reported crude steel production at 12.48 lakh tonnes for May 2020, clocking an average capacity utilisation of around 83% for the month.