Benchmarks to make optimistic start on Friday

Indian markets ended lower on Thursday as coronavirus cases continued to rise in the country, putting pressure on an already slowing economy. Today, the start of session is likely to be optimistic tracking gains in global markets. Traders will be getting some encouragement with Giridhar Aramane, Secretary in the Ministry of Road Transport and Highways’ statement that the government is working on a comprehensive financial package not only for MSMEs but for all sectors of the economy. Also, chief economic adviser (CEA) Krishnamurthy Subramanian expressed optimism that the Indian economy will stage a better recovery once the Covid-19 outbreak subsides and it will be a V-shaped recovery. Some support will also come with Finance Minister Nirmala Sitharaman’s statement that public sector banks (PSBs) sanctioned loans worth Rs 5.66 lakh crore for more than 41.81 lakh accounts, during March-April 2020, and added that the economy is poised to recover. Meanwhile, the Central Board of Direct taxes (CBDT) has amended a rule to settle disputes expeditiously under mutual agreement procedure (MAP), which is a dispute resolution process under tax treaties. It has also revised form 34F which is used for making application for invoking MAP. Though, there may be some cautiousness with report that confirmed COVID-19 cases in India stand at 52,952. The death toll from the outbreak in India is at 1,783. Maharashtra, Gujarat and Delhi have reported the highest number of cases. There will be some reaction in sugar stocks with the All India Sugar Trade Association’s (AISTA) report that sugar mills have exported 33.49 lakh tonnes of sweetener so far in the current marketing year ending September, with help from government's financial assistance. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended higher on Thursday amid continued optimism about the US economy at least partially reopening in the near future. Asian markets are trading in green on Friday following gains on Wall Street overnight.

Back home, Indian equity benchmarks ended highly volatile trade in red terrain with losses of over half percent on Thursday, with Sensex and Nifty closing below their crucial 31,450 and 9,200 levels, respectively. Markets commenced the session with gap-down opening, as traders remain concerned with Chief economic adviser KV Subramanian’s statement that India’s gross domestic product (GDP) will contract in the first quarter, but is likely to grow 2% for the full financial year. But, markets soon tried to cut losses, taking support from Niti Aayog CEO Amitabh Kant’s statement that the government is working on a package of structural reforms across sunrise sectors to convert India into a global manufacturing and exporting hub. Some support also came as markets regulator Sebi gave certain relaxations to companies from compliance with procedural norms pertaining to rights issues opening up to July 31 amid the coronavirus lockdown. But, key indices failed to hold recovery and resumed selling activity in early noon deals, as anxiety remained among the traders with coronavirus cases in the country crossed 50,000 in a steady rise despite weeks-long lockdown, which has also hampered the economic growth of the country. Traders failed to take any senses of relief from former union minister Suresh Prabhu’s statement that focusing on district level growth in post-COVID period will help creating huge employment opportunities, contain migration from villages and push India's GDP. He said that increasing district level growth by additional 3 per cent will help increase the national GDP. Meanwhile, the government has extended the last date for filing annual GST return for financial year 2018-19 by three months till September 2020. Finally, the BSE Sensex lost 242.37 points or 0.76% to 31,443.38, while the CNX Nifty was down by 71.85 points or 0.78% to 9,199.05.