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Markets to get flat-to-positive start on Thursday
Jun-04-2020

Indian markets ended higher for sixth straight session on Wednesday amid hopes for V-shaped recovery coupled with expectations of central bank policy support. Today, the markets are likely to make flat-to-positive start following positive global cues. Traders will be getting some encouragement with Union minister Prakash Javdekar’s statement that the government has formed an empowered group of secretaries to enhance investment in the country to offset the impact of coronavirus. Some support will also come with a private report that after Russia approved the use of Avifavir, a derivative of favipiravir, for treatment of the new coronavirues, India is gearing up to ensure the antiviral drug is soon available here. However, traders may be concerned with report that India has on June 04 recorded its biggest spike in the number of coronavirus cases, with over 9,000 of them being reported in a single day, besides over 250 deaths. The total number of corona cases in the country stands at 216,824. There may be some cautiousness with report that days after downgrading India's sovereign ratings, global credit ratings agency Moody's Investors Service said that the quality of retail and small business loans will also deteriorate. Meanwhile, the Union Cabinet has approved amendments to the Essential Commodities Act. The amendment will deregulate food items like cereals, pulses and onion from stockholding limit. Aviation stocks will be in focus with ratings agency Icra’s statement that air passenger traffic in the country is expected to remain under pressure for the first half (April-September) of the current fiscal, with the full year passenger volume likely to go down by about half despite some recovery in H2 FY21. There will be some reaction in MSME stocks with report that the finance ministry said that public sector banks (PSBs) have disbursed Rs 3,892.78 crore in the first two days of the month under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus-induced lockdown.

The US markets ended higher on Wednesday as new economic data added to investor optimism about a quick recovery. Asian markets are trading mostly in green on Thursday as optimism over the economic recovery from the coronavirus pandemic continued to keep investor sentiment afloat.

Back home, extending their northward journey for sixth straight session, Indian equity benchmarks reclaimed their crucial 34,100 (Sensex) and 10,050 (Nifty) levels on Wednesday. Markets started the session on an optimistic note as traders took encouragement with Prime Minister Narendra Modi’s assurance to 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 also came 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. Markets continued their bull run even after business activity across India's service sector fell drastically during May as the unfavourable economic effects of the coronavirus disease 2019 (COVID-19) pandemic impaired business operations, restricted consumer footfall and led demand to collapse. While most measures came off the unprecedented lows seen in April, survey data still pointed to extreme month-to-month declines in output and new orders. However, key gauges gave up some of their gains in final hour of trade after Former finance secretary Subhash Chandra Garg’s statement that the Indian economy will shrink by 10 percent or Rs 20 lakh crore in current financial year (FY21), the first contraction in over 40 years, due to a faulty COVID lockdown. Meanwhile, the data compiled by Worldometer showed 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. Finally, the BSE Sensex gained 284.01 points or 0.84% to 34109.54, while the CNX Nifty was up by 82.45 points or 0.83% to 10,061.55.
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