In a volatile session, Indian
equity benchmarks climbed off their respective day's high levels in the last
leg of trade but ended with gains for the third straight day on Thursday, due
to the gains in Auto, FMCG and Metal stocks. Key indices made a cautious start
but quickly gained traction, as the union cabinet cleared Rs 3 lakh crore
micro, small and medium enterprise (MSME) funding scheme to mitigate the
economic distress being faced by the small businesses in the light of the
COVID-19 pandemic. Buying further crept in as the Trade Promotion Council of
India (TPCI) said that with the government taking steps in the agriculture and
food sector, industry will be able to achieve export target of $100 billion
worth in the next five years by focusing on untapped global markets like
Africa, Latin America, Middle East and Oceania. However, markets erased most of
gains in late trade, as domestic rating agency ICRA warned of a deep recession
as it drastically lowered FY21 growth forecast for India to minus 5 percent,
citing the very modest fiscal support, extension of the nationwide lockdown and
looming labour shortage. The agency also sharply revised downwards the growth
contraction in Q1 to 25 percent as against the previous forecast of 16-20
percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously,
which implies a recession. But, trade remained in green as some optimism
remained among traders with the finance ministry's monthly report on the macro
economy stating that the government is ‘cautiously optimistic' about the
revival of growth later in this fiscal, despite the pandemic-induced lockdown,
and the country's current account may witness a small surplus in the June
quarter. Finally, the BSE Sensex gained 114.29 points or 0.37% to 30,932.90,
while the CNX Nifty was up by 39.70 points or 0.44% to 9,106.25.
The US markets ended lower on
Thursday due to profit taking, as some traders cashed in on the strong gains posted
on previous session. Weakness also prevailed in the markets as tensions between
the US and China appeared to heat up. US senators introduced a bipartisan bill
that would sanction Chinese officials and entities who enforce the new
national-security laws in Hong Kong. Meanwhile, President Donald Trump appeared
to attack Chinese leader Xi Jinping over Beijing's handling of the coronavirus.
On the economic data front, First-time claims for US unemployment benefits
pulled back further off the record high set in late March in the week ended May
16th, according to a report released by the Labor Department. The report said
initial jobless claims dropped to 2.438 million, a decrease of 249,000 from the
previous week's revised level of 2.687 million. Street had expected jobless
claims to tumble to 2.400 million from the 2.981 million originally reported
for the previous week. Meanwhile, the National Association of Realtors (NAR)
released a report showing another steep drop in US existing home sales in the
month of April. NAR said existing home sales plunged by 17.8 percent to an
annual rate of 4.33 million in April after tumbling by 8.5 percent to 5.27
million in March. Street had expected existing home sales to plummet to a rate
of 4.30 million. The continued nosedive pulled existing home sales down to
their lowest level since hitting 3.45 million in July of 2010.
Crude oil futures ended higher on
Thursday, magnifying recent gains, on continued optimism about a pick-up in
energy demand, and falling supply levels in the market. Demand is coming back
slowly as business lockdowns gradually end with the coronavirus pandemic
receding, while OPEC production cut and lower shale output has reduced the
excess in supply. However, oil prices finished off the day's highs, pressured
by profit-taking on the heels of US-China trade tensions. The US Energy
Information Administration reported that domestic supplies of natural gas rose
by 81 billion cubic feet for the week ended May 15. Crude oil futures for July
rose 43 cents or 1.3 percent to settle at $33.92 a barrel on the New York
Mercantile Exchange. July Brent crude added 31 cents or 0.9 percent to settle
at $36.06 a barrel on London's Intercontinental Exchange.
Indian rupee gained ground
against dollar and ended higher on Thursday, on persistent selling of the
American currency by exporters. Traders took encouragement as the union cabinet
cleared Rs 3 lakh crore micro, small and medium enterprise (MSME) funding
scheme to mitigate the economic distress being faced by the small businesses in
the light of the COVID-19 pandemic. Besides, good going in the local equity
markets gave the uptrend some momentum. However, further up-move got restricted
as domestic rating agency ICRA warned of a deep recession as it drastically
lowered FY21 growth forecast for India to minus 5 percent, citing the very
modest fiscal support, extension of the nationwide lockdown and looming labour
shortage. On the global front, dollar edged higher on Thursday as Sino-U.S.
tensions and weak economic indicators in Europe dented sentiment after hopes of
a quick economic recovery and further stimulus fuelled an overnight rally on
Wall Street. Finally, the rupee ended at 75.61, 19 paise stronger from its
previous close of 75.80 on Wednesday.
The FIIs as per Thursday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 4202.61 crore against gross
selling of Rs 5902.80 crore, while in the debt segment, the gross purchase was
of Rs 779.31 crore with gross sales of Rs 543.79 crore. Besides, in the hybrid
segment, the gross buying was of Rs 13.20 crore against gross selling of Rs
15.84 crore.
The US markets ended lower on
Thursday on a fresh wave of China-US tensions that raised doubts about the
trade deal reached early this year between the world's two largest economies.
Asian markets are trading in red on Friday as China announced plans to impose a
national security law on Hong Kong and investors parsed through initial details
coming out of the National People's Congress, China's biggest political event
of the year. Indian markets ended higher for a third straight session on
Thursday, though the upside remained capped amid concerns that the coronavirus
pandemic will have a cascading effect on the global as well as domestic
economy. Today, the markets are likely to open in red following weakness in
global markets amid escalating geopolitical tensions. Besides, India rejected
Beijing's claim that Indian troops trespassed into Chinese territory, and
accused the People's Liberation Army (PLA) of hindering patrols by Indian
soldiers. Investors will be eyeing the Reserve Bank of India (RBI) governor Shaktikanta
Das' press conference to be held on later in the day. This will be third press
conference of the governor in the context of COVID-19 related measures in last
two months. Traders will be concerned with rising coronavirus cases in India.
The country has recorded over 6,000 cases in a single day, taking its total
coronavirus count to 118,226. As many as 3,548 people have died from the
disease, according to Worldometer data. An emergency coronavirus vaccine would
be available latest by January or February next year, said former
director-general of the Indian Council of Medical Research (ICMR) N K Ganguly.
There will be some cautiousness as India Ratings (Ind-Ra) expects most sectors
to experience varying degrees of revenue contraction during FY21 due to demand
and supply disruptions caused by the novel coronavirus, or COVID-19, pandemic.
Though, some support may come later in the day as the government said it has
released Rs 92,077 crore towards devolution of central taxes to states for
April and May. This is a special gesture to ensure that the states' cash flows
remain undisturbed at this crucial time. Auto stocks will be in focus with
Union Minister Nitin Gadkari's statement that the government is set to
introduce a vehicle scrappage policy, under which recycling clusters may be
established near ports, expressing confidence that India will emerge as the
world's leading automobile manufacturing hub in five years.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,106.25
|
9,048.72
|
9,171.17
|
BSE Sensex
|
30,932.90
|
30,735.88
|
31,159.35
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
611.50
|
151.95
|
150.25
|
154.90
|
ITC
|
583.83
|
188.95
|
177.58
|
195.38
|
ICICI Bank
|
430.76
|
304.40
|
300.00
|
310.80
|
Tata Motors
|
372.91
|
84.10
|
82.93
|
85.23
|
Hindalco Industries
|
343.26
|
129.50
|
123.18
|
133.28
|
Cipla has received final approval for its ANDA for Dihydroergotamine Mesylate Nasal Spray 4mg/mL from the USFDA with a CGT designation.
Tech Mahindra and ChampTrax Technologies, a Canadian sports startup, have collaborated to develop a solution to create stadium like-experience at home for global sports fans.
M&M has unveiled a wide variety of innovative, new finance schemes to ease the burden on its customers during these challenging times.
Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has enhanced its online sales and service initiative amid the coronavirus pandemic.