Benchmarks to make positive start of new week

Indian markets ended lower on Friday with tepid cues from global markets and rising coronavirus infections in India kept investors nervous. Today, the start of new week is likely to be optimistic tracking positive cues from global markets. Traders will be getting encouragement with the MSME Minister Nitin Gadkari’s statement that the government may soon set up a Rs 1 trillion revolving fund for micro, small and medium enterprises (MSMEs) to bring in much-needed liquidity for small businesses if the Prime Minister’s Office accepts the proposal. Some support will also come with a private report that India is considering a goods and services tax (GST) relief package to counter the impact of Covid-19 and help prop up the economy. Also, the Reserve Bank of India’s (RBI) data showed that the country's foreign exchange reserves surged by $3.09 billion to $479.57 billion in the week to April 17, due to an increase in foreign currency assets. Traders may take note of the government’s statement that India's chemical exports rose by 7% to Rs 2.68 lakh crore during April-January period of the last fiscal, and became the top exporting sector in the country for the first time. However, traders may be concerned with the Worldometer data report showing that India's total count of coronavirus (Covid-19) cases has reached 27,890 and the death toll currently stands at 882. There may be some cautiousness with CARE Ratings’ statement that the country's GDP growth is likely to decline to 1.1% in the current financial year 2020-21 due to the coronavirus pandemic. The domestic rating agency added that the estimate has a downward bias, saying predicting the recovery is very difficult at present. Besides, remaining risk-averse amid the coronavirus pandemic, overseas investors have withdrawn net Rs 10,347 crore from Indian capital markets in April so far. Agriculture related stocks will be in focus with Agriculture Ministry’s data showing that area sown to rice increased by 37.70% to 34.73 lakh hectare so far in the kharif (summer) season of the 2020-21 crop year. There will be some important result announcements to keep the markets in action.

The US markets ended higher on Friday after President Donald Trump signed a $484 billion stimulus package that will replenish a fund for small-business lending and direct money to hospitals and efforts to ramp up US testing capacity in the fight against COVID-19. Asian markets are trading in green on Monday ahead of a busy week for earnings and central bank meetings, with much chatter the Bank of Japan (BOJ) will announce more stimulus steps.

Back home, Indian equity benchmarks ended volatile session on a pessimistic note with losses of over one and half percent on Friday, on the back of weak global cues after a report that an experimental antiviral drug for the coronavirus flopped in its first randomised clinical trial. Key indices failed to sustain the momentum of the last two trading sessions, with Sensex and Nifty slipping below their crucial 31,350 and 9,200 levels, respectively. Key bourses started the session with a gap-down opening, as traders were concerned with rising coronavirus cases in the country. Selling further crept in with the Confederation of Indian Industry’s (CII) report that India's GDP is likely to range between a decline of 0.9% and a growth of 1.5% in the current financial year, with the economy undergoing a turbulent phase caused by the coronavirus-induced lockdown. However, markets had begun to recover and have cut their respective intra-day loss in afternoon session, as traders found some support with report that Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman will again meet on April 24 to finalise a second stimulus package for industry, the poor and farmers. Though, both indices failed to hold the recovery and slipped back to opening levels at the end of the session, as some anxiety remained among traders with Former Finance Secretary Subhash Chandra Garg’s statement that the unavailability of data is the main reason why the government has not been able to announce a stimulus package for coronavirus-stricken businesses, including MSMEs. Finally, the BSE Sensex lost 535.86 points or 1.68% to 31,327.22, while the CNX Nifty was down by 159.50 points or 1.71% to 9,154.40.