Extending their previous
session's rally, Indian equity benchmarks witnessed remarkable day of trade
with frontline gauges garnering a gain of around two percent each on Thursday.
Markets started the session on optimistic note with Commerce and industry
minister Piyush Goyal's statement that worst for the economy is over and
revival is in the air. Traders took some support with former RBI governor
Duvvuri Subbarao said that the country's economy is likely to decline by 5
percent in the current fiscal but may expand by around 5 percent in the next
financial year. Traders overlooked SBI Ecowrap report stating that as the
coronavirus pandemic and the nationwide lockdown severely impact the economy,
India's gross domestic product for the first quarter of the financial year
2020-21 is likely to contract by over 40 per cent. Also, market participants
paid no heed to S&P Global Ratings' statement that the Indian economy will
shrink by 5 per cent in the current fiscal as it joined a chorus of
international agencies that are forecasting a contraction in growth rate due to
coronavirus lockdown halting economic activity. Markets continued to trade
upward to end near intraday high levels. Traders took note of report that India
may need to inject up to Rs 1.5 lakh crore rupees ($19.81 billion) into its
state-owned lenders as their pile of soured assets is expected to double during
the coronavirus pandemic. Separately, a report stated that with 7,260 cases,
India has recorded its biggest single-day spike in total number of coronavirus
cases to 158,086 - just a shade behind Turkey. Worldometer data also suggests
that the country has seen 190 new deaths in the past 24 hours due to the
infection. With this, India's death toll has risen to 4,534. Among states,
Maharashtra has the highest number of Covid-19 cases, at 56,948. Finally, the
BSE Sensex gained 595.37 points or 1.88% to 32200.59, while the CNX Nifty was
up by 175.15 points or 1.88% to 9490.10.
The US markets ended lower on
Thursday with gains evaporating within the final hour of trade as markets
digested a report that President Donald Trump was set to hold a news conference
on China on Friday. Word of an event comes as tensions between China and the US
have ratcheted higher, particularly as Beijing was seen threatening the
autonomy of Hong Kong. The US on Wednesday said it no longer considered Hong
Kong highly autonomous under a 1992 law, a move that could lead to measures to
limit Hong Kong's trade privileges and open the door to sanctions against
individuals the US sees as suppressing civil liberties in the territory. Also,
the governments of the US, Australia, Canada and the UK issued a joint
statement reiterating their deep concern regarding Beijing's decision to impose
a national security law on Hong Kong, after China's parliament, the National
People's Congress passed legislation that could greatly curtail democratic
freedoms. On the economic data front, a report released by the Labor Department
showed a continued decrease in first-time claims for US unemployment benefits
in the week ended May 23. The Labor Department said initial jobless claims
dropped to 2.123 million, a decrease of 323,000 from the previous week's
revised level of 2.446 million. Street had expected jobless claims to fall to
2.100 million from the 2.438 million originally reported for the previous week.
Meanwhile, pending home sales in the US plunged by more than expected in the
month of April, the National Association of Realtors (NAR) revealed in a
report. NAR said its pending home sales
index plummeted by 21.8 percent to 69.0 in April after tumbling by 20.8 percent
to 88.2 in March. Street had expected pending home sales to slump by 15.0
percent.
Crude oil futures ended higher on
Thursday waving off data that showed an unexpected rise in US crude inventories
as traders focused on a fall in gasoline stocks and a further decline in crude
stored at the New York Mercantile Exchange's delivery hub in Cushing, Oklahoma.
The Energy Information Administration (EIA) said inventories rose 7.9 million
barrels in the week ended May 22 as against expectations of a near 2-million
barrels drop. Meanwhile, gasoline stocks fell 700,000 barrels, beating
expectations for an increase of 100,000 barrels. Distillate stockpiles were up
5.5 million barrels in the week, about three times the expected jump. Crude
supplies at Cushing, Oklahoma, the New York Mercantile Exchange delivery hub,
fell 3.4 million barrels. Crude oil futures for July rose 90 cents or 2.7
percent to settle at $33.71 a barrel on the New York Mercantile Exchange.
August Brent crude gained 55 cents or 1.6 percent to settle at $35.29 a barrel
on London's Intercontinental Exchange.
Indian rupee ended weaker against
US dollar on Thursday, due to fresh demand for the American currency from banks
and importers. Investors' sentiment remained fragile with S&P Global
Ratings' latest report stating that the that Indian economy is expected to
contract 5 per cent in the current fiscal year (FY21) as the lockdown imposed
to contain COVID-19 pandemic has curtailed economic activity severely. However,
gains in domestic equity markets provided some support to the rupee, keeping
the downside in check. On the global front, euro continued to rise on Thursday,
boosted by a 750 billion euro ($826.35 billion) EU plan to prop up the bloc's
coronavirus-hit economies, though gains were limited as doubts about delivering
the scheme crept in. Finally, the rupee ended at 75.76, 5 paise weaker from its
previous close of 75.71 on Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 6152.98 crore against gross selling of Rs 6321.42 crore, while
in the debt segment, the gross purchase was of Rs 837.17 crore with gross sales
of Rs 3291.28 crore. Besides, in the hybrid segment, the gross buying was of Rs
5.85 crore against gross selling of Rs 1.06 crore.
The US markets ended lower on
Thursday amid report that President Donald Trump announced plans to hold a news
conference about China on Friday. Asian markets are trading mostly in red on
Friday as investors watch for market reaction to China's controversial national
security law for Hong Kong that was approved on Thursday. Indian markets ended
higher for the second straight session on Thursday, with auto and banking
stocks leading the rally on account of short-covering on eve of F&O
derivatives expiry. Today, the start of session is likely to be negative
tracking weakness in global markets. Traders will be concerned with rising
coronavirus cases in India. The total number of coronavirus cases in India has
jumped to 165,386. With latest spike in corona cases, India has replaced Turkey
to be the ninth-most-affected nation in this pandemic. India has the
5th-highest count of active cases, fewer only than the US, Brazil, Russia and
France. India has also overtaken China in death toll; Covid-19 fatalities in
the country now stand at 4,710. There will be some cautiousness with Care
ratings report that the country's GDP growth is likely to be at 3.6 percent in
January-March 2020 as economic activity came to a complete halt due to the
countrywide lockdown imposed to contain the coronavirus outbreak. Traders may
take note of Fitch ratings' report that with incremental bank lending making up
the bulk of the government's nearly Rs 21 lakh crore stimulus package, lenders
face significant asset quality challenges which can increase their dud loan
ratios by up to 6 percentage points over the next two years. Though, traders
may take encouragement later in the day with Commerce and Industry Minister
Piyush Goyal's statement that India's exports will improve in May compared to
April when shipments contracted by a record 60.28 per cent. Some support may
also come with report that foreign direct investment (FDI) in India grew by 13
percent to a record of $49.97 billion in the 2019-20 financial year, according
to official data. The country had received FDI of $44.36 billion during
April-March 2018-19. There will be some buzz in the auto stocks with CRISIL
Research report stating that the domestic automobile industry is headed for
another year of double-digit sales decline this fiscal, given the extended
lockdown to contain the COVID-19 pandemic. Banking stocks will be in focus as
the Reserve Bank of India (RBI) imposed a penalty of Rs 6.50 crore on Karnataka
Bank, Bank of India and Saraswat Co-operative Bank for non-compliance with
central bank's Income Recognition and Asset Classification norms. There will be
some reaction in cement stocks with report that cement production in the
country is slated to fall by 25-30 per cent this fiscal as Covid pandemic has
sucked demand from end user industries.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,490.10
|
9,380.65
|
9,555.40
|
BSE Sensex
|
32,200.59
|
31,805.83
|
32,431.29
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
961.83
|
87.00
|
84.98
|
88.58
|
State Bank of India
|
769.70
|
158.20
|
155.80
|
161.50
|
Axis Bank
|
726.95
|
390.95
|
382.75
|
403.40
|
Zee Entertainment
Enterprises
|
710.30
|
180.70
|
166.32
|
192.07
|
ICICI Bank
|
661.37
|
326.85
|
321.82
|
330.82
|
NTPC has decided to foray in electricity distribution business by evincing interest to buy 51 per cent stake in Anil Dhirubhai Ambani Group's two utilities in Delhi.
Maruti Suzuki India has joined hands with HDFC Bank to offer bouquet of flexible finance schemes for new car buyers.
Tech Mahindra and Openet have entered into a global strategic partnership to enable digital transformation for customers globally.
Dr. Reddy's Laboratories has received the EIR from the USFDA, for its Integrated Product Development Organization at Medchal-Malkajgiri, Telangana.