Markets to make weak start of new week

Indian markets before going for a long weekend holiday ended higher with notable gains for fourth straight session on Thursday mirroring firm global cues. Markets remain closed on May 01, 2020, for Maharashtra Day. Today, the start of session is likely to be weak following lackluster trade in Asian peers. Investors will be looking ahead to the Manufacturing PMI data to be out later in the day. Traders will be concerned with report that India has entered the third phase of its nationwide lockdown. The worldometer data showed that the total number of coronavirus cases in the country has reached 42,505 and there have been 1,391 fatalities so far. There will be some cautiousness with government data showing that India’s core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. However, traders may take some support later in the day with report that direct tax collection surged 36.5% to Rs 34,784 crore in the first month of fiscal year 2020-21, despite a nationwide lockdown, thanks to a 63% year-on-year fall in tax refunds in April. Some support may also come as Prime Minister Narendra Modi held a series of meetings with key cabinet ministers and officials of economic ministries to firm up the second stimulus package to lift the economy reeling under the impact of coronavirus-induced lockdown. Traders may take note of report that describing infrastructure development as an enabler for growth, a finance ministry-constituted task force has observed that creating new and upgrading existing infra projects with Rs 111 lakh crore investment will be key to raising India’s competitiveness and achieving $5 trillion economy goal by 2025. There will be some buzz in the auto stocks reacting their monthly sales figures. Eicher Motors April auto sales plunged 98%, while Maruti Suzuki reported zero sales in domestic market. Sugar stocks will be in focus with ISMA’s report that India's sugar production fell 20% to 258.01 lakh tonne in the current marketing year ending September due to lower cane output, while sales plummeted during the last two months because of the lockdown. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended sharply lower on Friday amid negative reaction to earnings and contraction in economic data of manufacturing activity for the month of April. Asian markets are trading in red on Monday as rising US-China tensions over the coronavirus and oil prices fell further turned investors cautious.

Back home, Indian equity benchmarks continued their positive momentum for the fourth consecutive session and ended Thursday’s session with handsome gains of over three percent, tracking favourable global cues as positive results for experimental remdesivir drug towards Covid-19 treatment. Markets started session on a higher note, as the government's announcement to give considerable relief to many districts post May 4 boosted sentiments. Traders took encouragement with Niti Aayog CEO Amitabh Kant’s statement that India's COVID-19 recovery rate has improved from 15% on April 19 to 24.56% as of April 29. Some optimism also came as a government task force has firmed up a road map for capital investments of Rs 111 lakh crore in infrastructure over six years through FY25, pledging 71% of the expenditure for energy, roads, urban development and railways, and envisaging a key role for private investors. Buying got intensified in the afternoon session, taking support from Open Budget Survey indicating that India has been placed at 53rd position among 117 nations in terms of budget transparency and accountability. The survey, conducted by International Budget Partnership (IBP), has provided India's Union Budget process a transparency score of 49 out of 100, which is higher than the global average of 45. However, markets trimmed most of gains in late afternoon session but still ended with solid gains, as sentiments remained buoyant with Agriculture Minister Narendra Singh Tomar’s statement that the country’s farm sector is functioning smoothly despite COVID-19 lockdown and there will not be much impact on its growth in the current fiscal unlike other sectors. Agriculture and allied sector’s growth stood at 3.7 per cent during the 2019-20 fiscal. A strong rupee further strengthened investors’ sentiment on Dalal Street. Indian rupee has ended higher by 57 paise at 75.09 per dollar, amid weak American currency in the overseas market. Finally, the BSE Sensex gained 997.46 points or 3.05% to 33,717.62, while the CNX Nifty was up by 306.55 points or 3.21% to 9,859.90.