Indian equity benchmarks came off
their intraday lows but failed to erase all the losses and ended on pessimistic
note on Tuesday, on concern that the nationwide lockdown may extend amid a rise
in virus-infected cases. Markets ended lower for second straight day, with
Sensex and Nifty settling below their crucial 31,400 and 9,200 levels,
respectively. Markets made gap-down opening, following weak trend seen in other
Asian markets. Traders also remained wary with a foreign brokerage in its
report estimating that the fiscal deficit to come at 5.8% of the GDP in FY21 as
against the budget target of 3.5%, after the government's move to raise its
market borrowing programme for the current financial year by Rs 4.2 lakh crore.
However, Key indices witnessed sharp recovery in the last hour of the session,
taking support from Union minister Nitin Gadkari's statement that he expects
the Centre to unveil a financial package in two-three days, observing that the
situation was very bad despite the three-month moratorium on loan repayments
announced by the RBI. Some support also came with the report that government
released Rs 6,195.08 crore to 14 states as the second equated monthly
installment of the Post Devolution Revenue Deficit Grant on May 11. But,
markets breadth remained negative, as traders remained on the sidelines ahead
of the industrial production data for March and consumer inflation for April,
slated to be announced later in the day. Finally, the BSE Sensex lost 190.10
points or 0.60% to 31,371.12, while the CNX Nifty was down by 42.65 points or
0.46% to 9,196.55.
The US markets ended lower on
Tuesday on renewed coronavirus concerns after Dr. Anthony Fauci warned of
suffering and death if the country reopens prematurely. Fauci, the top US
infectious disease expert, and other members of the White House coronavirus
task force testified before the Senate Health, Education, Labor and Pensions
Committee. Fauci said there is a real risk that you will trigger an outbreak
that you may not be able to control and, in fact paradoxically, will set you
back, not only leading to some suffering and death that could be avoided, but
could even set you back on the road to try to get economic recovery. Fauci also
said that the US is moving in the right direction but does not have by any
means total control of this outbreak. On the economic data front, Consumer
prices in the US decreased in line with street estimates in the month of April,
according to a report released by the Labor Department. The Labor Department
said its consumer price index slid by 0.8 percent in April after falling by 0.4
percent in March. The drop by the index, which matched street estimates,
reflects the largest monthly decline since December of 2008. Gasoline prices
led the way lower, plummeting by 20.6 percent in April after tumbling by 10.5
percent in the previous month. The nosedive in gasoline prices contributed to
another steep drop in energy prices, which plunged by 10.1 percent in April
after slumping by 5.8 percent in March. Energy prices saw their largest monthly
decrease since November of 2008.
Crude oil futures ended higher on
Tuesday on expectations that falling production levels and a gradual revival in
demand from a COVID-19 pandemic-related drop, will ease a global glut of crude
that has slammed prices in 2020. The US Energy Information Administration (EIA)
in its latest report has lowered its forecast for US crude production for the
year 2020. The EIA forecasted domestic output at an average 11.7 million
barrels per day. That would be down 500,000 barrels a day from 2019. Besides,
Major oil producers Saudi Arabia, Kuwait and UAE have stated that they would
cut outputs beyond what they had committed as part of the OPEC+ agreement
recently. Crude oil futures for June rose $1.64 or 6.8 percent to settle at
$25.78 a barrel on the New York Mercantile Exchange. July Brent crude gained 35
cents or 1.2 percent to settle at $29.98 a barrel on London's Intercontinental
Exchange.
Indian rupee recovered from its
initial losses to end higher against dollar on Tuesday, amid selling in
American currency by banks and exporters. Traders took support with Union
minister Nitin Gadkari's statement that he expects the Centre to unveil a
financial package in two-three days, observing that the situation was very bad
despite the three-month moratorium on loan repayments announced by the RBI. He
noted that on March 27, the RBI announced a slew of steps, including a
three-month moratorium on loan repayments, as part of measures to alleviate
hardships faced by people. However, there was some cautiousness too ahead of
industrial production data for March and consumer inflation for April, slated
to be announced later in the day. On the global front, U.S. dollar clung to
gains on Tuesday on growing fears about a second wave of coronavirus infections
and after the Federal Reserve played down the likelihood of negative interest
rates, boosting the currency's yield attraction. Finally, the rupee ended at
75.51, 22 paise stronger from its previous close of 75.73 on Monday.
The FIIs as per Tuesday'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 5440.95 crore against gross
selling of Rs 4791.98 crore, while in the debt segment, the gross purchase was
of Rs 587.51 crore with gross sales of Rs 3864.27 crore. Besides, in the hybrid
segment, the gross buying was of Rs 7.01 crore against gross selling of Rs 3.96
crore.
The US markets ended sharply
lower on Tuesday amid renewed coronavirus concerns after Dr. Anthony Fauci
warned of suffering and death if the country reopens prematurely. Asian markets
are trading mixed on Wednesday as caution remains over a recent resurgence in
coronavirus cases in certain countries regionally. Indian markets ended lower
for second straight session on Tuesday with weak global cues and rising
coronavirus cases in India keeping investors nervous. Today, the start of
session is likely to be gap-up after 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. He
added that the lockdown will continue post May 17 with new rules, which may cap
the gains. Some support will also come as India Inc said Prime Minister
Narendra Modi's announcement of a Rs 20 lakh crore stimulus package was the
need of the hour as it will pave the way for post pandemic recovery and unleash
the next wave of economic growth. Besides, Finance Minister Nirmala Sitharaman
is expected to announce the crucial details of the stimulus package in the days
to come. Though, there may be some cautiousness with Union health ministry data
showing that India's tally of the coronavirus disease (Covid-19) crossed the
bleak 70,000-mark on May 13 morning as more than 3,600 new infections were
reported in the last 24 hours. Traders may be concerned with the government
data showing that the country's industrial output declined by 16.7% in March,
mainly on account of poor show by mining, manufacturing and electricity sector
due to the nationwide lockdown. Besides, the government has released the
consumer price index-based inflation (CPI) data only for certain sub-groups,
but did not give the general CPI number, citing difficulties in collecting the
data due to the Covid-19 pandemic. However, it revised the CPI inflation for
March to 5.84% from 5.91%. There will be some reaction in auto component
industry stocks with Ind-Ra's report that auto component industry is likely to
witness a second consecutive year of a double-digit de-growth this fiscal
mainly on account of disruption in operations due to coronavirus pandemic and
the subsequent lockdown. There will be some important earnings announcements
too to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,196.55
|
9,080.05
|
9,276.95
|
BSE Sensex
|
31,371.12
|
30,964.89
|
31,657.12
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
1,127.70
|
89.05
|
81.90
|
93.35
|
Tata Motors
|
775.52
|
86.20
|
83.90
|
88.10
|
State Bank of India
|
707.53
|
166.90
|
162.33
|
169.98
|
ICICI Bank
|
690.72
|
321.20
|
311.33
|
327.73
|
Reliance Industries
|
460.29
|
1,479.25
|
1,440.05
|
1,543.40
|
IOC has raised operating levels at its refineries to about 60 percent after fuel demand showed a gradual pick up on easing of lockdown restrictions.
Bharti Airtel has selected IT companies IBM and Red Hat to build its new network cloud to support 5G operations and applications around emerging technologies on its network.
TCS' strategic unit-- TCS iON has launched Remote Internships, a unique digital internship product to connect students directly with corporate and industry mentors.
Maruti Suzuki India has resumed operations at its Manesar plant in Haryana after around 40 days of closure due to the coronavirus-led lockdown.