HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Markets likely to get cautious start on Tuesday
Jun-02-2020

Indian markets ended higher on Monday and extended their gains for the fourth straight session, as firm global cues as well as enthusiasm over easing of lockdown curbs helped investors shrug off weak GDP data. Today, the markets are likely to make a cautious start amid rising coronavirus cases in India. The country’s total number of coronavirus cases is nearing the 200,000 mark, even as the country is in the midst of a watered-down Lockdown 5.0, or so-called India Unlock 1.0. Traders will be concerned as Moody’s Investors Service (Moody’s) downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. The rating agency has also downgraded India's local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local currency rating to P-3 from P-2. The outlook remains negative. There will be some cautiousness with the Centre for Monitoring Indian Economy (CMIE) data showing that India's unemployment rate in May rose to 23.48 per cent, marginally lower from 23.52% in April, reflecting the impact of coronavirus pandemic. Though, some support may come later in the day 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%. Meanwhile, the GST Council in its next meeting will discuss waiver of late fee for non-filing of GST returns for August 2017 to January 2020 period. Besides, the Union Cabinet approved an increase in minimum support prices (MSP) of 14 Kharif crops. There will be some buzz in the MSMEs stocks with report that in order to support stressed micro, small and medium enterprises (MSMEs), the Centre rolled out a Rs 20,000 crore distressed asset fund to extend support to promoters of distress units. Non-banking finance companies (NBFC) stocks will be in focus Moody’s report that the Reserve Bank of India's decision to extend the moratorium on loan repayment by three more months will be credit negative for NBFC.

The US markets ended higher on Monday as investors' hopes for a swift economic rebound offset nationwide protests and escalating tensions between the US and China. Asian markets are trading mostly in green on Tuesday following the positive cues overnight from Wall Street.

Back home, extending northward journey for fourth straight session, Indian equity benchmarks ended Monday’s session with healthy gains of over two and half percent, as the country geared up to further open its economy after a months-long lockdown to curb the spread of the coronavirus pandemic. Sensex and Nifty closed above their crucial 33,300 and 9,800 levels, respectively. Key indices made gap-up opening, tracking positive cues from the Asian peers. Sentiments remained up-beat with Commerce minister Piyush Goyal’s statement that most startups will be eligible for additional liquidity and funding under the credit and funding support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package. Key indices extended their upside in afternoon session, taking support from report that the Department for Promotion of Industry and Internal Trade (DPIIT) will very soon put a draft ecommerce policy in the public domain to seek views and comments. It said the ecommerce is a fast emerging sector and it is difficult to predict where it will go in the next couple of years. However, markets trimmed some of their initial gains in late hour of trade, as some anxiety remained among traders with the National Statistical Office (NSO) data showing that India's economic growth slipped to 3.1% in the January-March quarter of 2019-20 compared to growth of 5.7% in the corresponding quarter of 2018-19 showing impact of COVID-19 pandemic. In 2019-20, the Indian economy grew by 4.2% against 6.1% expansion in 2018-19. Also, the output of eight core infrastructure industries plunged by a record 38.1% in April as the nationwide lockdown to contain coronavirus pandemic caused a substantial loss of production across sectors. Finally, the BSE Sensex gained 879.42 points or 2.71% to 33,303.52, while the CNX Nifty was up by 245.85 points or 2.57% to 9,826.15.
  RELATED NEWS >>
Most Viewed >>
April 24 , 2024
Investing in passive funds? Keep it simple and
April 22 , 2024
Investment bankers to receive hefty bonuses as
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
April 23 , 2024
Why Mirae Asset MF is cautioning its ETF inves
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.