Markets to get gap-up opening amid strong global cues

Indian markets ended notably higher buoyed by gains in finance, energy and power stocks despite weak cues from global markets. Today, the start of session is likely to be gap-up tracking positive global cues on a report that a Gilead Sciences drug was showing effectiveness in treating the coronavirus. Investors will be eyeing the Reserve Bank of India (RBI) Governor Shaktikanta Das' media address later in the day. Traders will be getting some encouragement with report that Prime Minister Narendra Modi reviewed the impact of COVID-19 on the Indian economy and a possible second stimulus to boost sectors hit hard by the pandemic. Modi held discussions with Finance Minister Nirmala Sitharaman as the pandemic hit sectors from small industries to the aviation sector hard with millions of jobs at stake. Traders may take note of the International Monetary Fund’s statement that Asia doing better than other regions in the world in their fight against the deadly coronavirus and may recover faster. It also said that the impact of the deadly coronavirus on Asia will be severe, across the board, and unprecedented. Though, investors are likely to continue to track the trend in coronavirus cases. As per the Worldometer tally, the number of coronavirus cases in India has risen to 13,430 with 448 deaths. Also, there may be some cautiousness with a research report by SBI stating that India’s GDP growth may slide to 1.1% in the current financial year, on account of the impact of coronavirus outbreak on the economy. There will be some buzz in the agriculture stocks as the government set the foodgrain production target at 298.3 million tonnes for the 2020-21 crop year, up 2% from the record output achieved in the current year, banking on forecast of a normal monsoon. Real estate stocks will be in focus with a Knight Frank-Ficci-Naredco Real Estate Sentiment Index Q1 2020 Survey showing that the sentiment in the real estate industry touched all time low in March quarter due to Covid-10 crisis. There will be some reaction in fertilizer stocks as the government said it is closely monitoring the production and distribution of fertilisers to ensure that soil nutrients are made available to farmers during the upcoming rabi (summer-sown) season, amid the COVID-19 outbreak. Steel stocks will also be in limelight with Crisil’s report that steel demand in India is expected to decline 14-17% this fiscal, as the construction activities are likely to get further impacted due to the second phase of lockdown.

The US markets ended higher on Thursday as President Donald Trump prepares to announce guidelines for states on reopening the country. Asian markets are trading in green on Friday as investors await the release of major Chinese economic data expected to be out ahead.

Back home, in a volatile trading session, Indian stock markets traded in green for most part of the day and ended with gains of over half a percent, on the back of buying by participants. With that, the markets snapped two sessions’ losing streak, recapturing their crucial 8,990 (Nifty) and 30,600 (Sensex) bastions. Domestic bourses made negative start, tracking losses in global markets as investors fretted over rising number of Covid-19 cases and its impact on the world economy. Sentiments remained in lackluster mood as the government data showed that India’s merchandise exports plunged by 34.57% in March 2020 as compared to same period of last year, due to a steep decline in shipments of leather, gems and jewellery and petroleum products. This is expected to be the steepest fall in monthly exports since 2008-09, when shipments dipped by 33.3% in March 2009. Imports during March 2020 too decreased by 28.72% to $31.16 billion as compared to $43.72 billion in March 2019. However, markets have recouped all of their losses and traded higher in late morning deals, taking support from NITI Aayog Vice Chairman Rajiv Kumar’s statement that India’s gross domestic product (GDP) will see strong recovery from the second quarter (Q2) of the current fiscal year (FY21) as economic activities resume. He also hoped that the government will unveil fiscal measures to jumpstart growth, which has plummeted due to the COVID-19 crisis. Market participants also got comfort after a top official from the International Monetary Fund said that Asia doing better than other regions in the world in their fight against the deadly coronavirus and may recover faster. However, markets trimmed some of gains in dying hour of trade as some anxiety remained among traders with Fitch Ratings stating that the Indian government has less fiscal room to support the economy compared to many of its peers and the country’s credit profile would weaken if a wider fiscal deficit increases the debt-GDP ratio. Finally, the BSE Sensex gained 222.80 points or 0.73% to 30,602.61, while the CNX Nifty was up by 67.50 points or 0.76% to 8,992.80.