Benchmarks likely to open in green on Tuesday

Indian markets ended higher with significant gains on Monday after the Reserve Bank of India (RBI) rolled out a special liquidity facility worth Rs 50,000 crore for mutual funds to ease the pressure due to the coronavirus pandemic. Today, the markets are likely to get positive start amid sharp fall in crude oil prices overnight. Traders will be getting some encouragement with report that Prime Minister Narendra Modi has underlined that the lockdown has yielded positive results as the country has managed to save thousands of lives in the past one and a half months. Some support will also come as the Reserve Bank of India (RBI) received Rs 64,746 crore worth of bids or more than six times the amount it proposed to buy government bonds through the special open market operation (OMO). Traders may take note of a private report that the central government is considering a proposal to guarantee as much as Rs 3 trillion ($39 billion) of loans to small businesses as part of a plan to restart economy, which is reeling under the impact of a 40-day lockdown. Though, there may be some concern with report that India on April 27 recorded its highest single-day spike in toll due to COVID-19 as 60 deaths and 1,463 new infections were reported in the last twenty-four hours, taking the countrywide total to 28,380 and the number of deaths to 886. There may be some cautiousness with domestic rating agency Crisil’s statement that nearly halved its GDP forecast for India to 1.8% for 2020-21 while projecting total losses of Rs 10 lakh crore or Rs 7,000 per person due to disastrous lockdowns to control COVID-19 pandemic. Meanwhile, continuing its efforts to help market participants tide over challenges due to COVID-19 pandemic, market regulator Sebi has decided to reduce broker turnover fees and filing charges on offer documents for public offering, rights issue and buyback of shares. There will be some buzz in the insurance stocks with Irdai’s data showing that India's life insurance companies clocked 11.36% growth in their collective premium income at Rs 48.26 lakh crore during the fiscal ended March 2020. There will be some reaction in sugar stocks with ICRA’s report that the demand for sugar has witnessed a significant decline following the nationwide lockdown and the overall adverse impact on sugar consumption would be at least one million tonne in the domestic market. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended higher on Monday after New York Governor Andrew Cuomo announced plans for a phased reopening of his state's economy. Asian markets are trading mixed on Tuesday as oil prices continued to slip following an overnight plunge on fears that global storage capacity will soon be filled as a result of weak demand caused by the coronavirus pandemic.

Back home, Indian stock markets traded firmly in green on Monday and ended with gains of over a percent, amid gains in Asian peers as investors hoped for additional measures to fight the coronavirus pandemic. Domestic equity indices witnessed a gap-up start and traded with healthy gains, as traders took support 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 also came 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. The market breadth remained optimistic, as Reserve Bank of India (RBI) has decided to open a special liquidity facility for mutual funds (SLF-MF) of Rs 50,000 crore, with an aim to ease liquidity pressures on mutual funds (MFs). The central bank also stated that it remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability. However, key indices pared most of their morning gains in dying hour of trade, as India Ratings and Research (Ind-Ra) revised its FY21 economic growth forecast for the country further down to 1.9 percent, lowest in the last 29 years, citing the COVID-19 pandemic and the subsequent lockdown. According to Ind-Ra, Indian economy had registered a GDP growth of 1.1 percent in financial year 1991-92. Finally, the BSE Sensex gained 415.86 points or 1.33% to 31,743.08, while the CNX Nifty was up by 127.90 points or 1.40% to 9,282.30.