Benchmarks to get negative start; WPI data eyed

Indian markets ended higher with notable gains on Wednesday after Prime Minister Narendra Modi announced a Rs 20 lakh crore package -- nearly 10% of India's GDP in a big push to revive the economy. Today, the markets are likely to make negative start tracking weakness in global markets. Investors will be eyeing the April wholesale price index (WPI) inflation data to be released later in the day. There will be some cautiousness with former chief statistician Pronab Sen fears that the country’s gross domestic product (GDP) will contract astronomically by nine per cent in 2020-21 if the government does not go beyond the package announced by finance minister Nirmala Sitharaman. Traders will be concerned as the UN slashed India's projected growth rate to 1.2% in 2020 and forecast that the global economy will contract sharply by 3.2% as the COVID-19 pandemic paralyses the world, sharply restricting economic activities, increasing uncertainties and unleashing a recession unseen since the Great Depression of the 1930s. Though, some respite may come later in the day as Finance Minister Nirmala Sitharaman unveiled the first tranche of the mega economic stimulus package aimed at uplifting the economy. In a big push to revive the economy, the FM announced 15 schemes for MSMEs, HFCs, NBFCs, MFI, Discoms, RERA and on EPF. Traders may be getting some encouragement as the Reserve Bank of India (RBI) said a scheme providing interest subsidy for post and pre-shipment export credit has been extended by a year till March 31, 2021, a move which would provide relief to exporters. Besides, in a major initiative, the government has extended the due date for filing belated income tax returns (ITRs) for the year 2019-2020 from July 31, 2020 and October 31, 2020 to November 30, 2020. Meanwhile, the World Economic Forum (WEF) said India has moved up two positions to rank 74th on a global Energy Transition Index with improvements on all key parameters of economic growth, energy security and environmental sustainability. There will be some buzz in the healthcare stocks with ICRA’s report that following the spread of Covid-19 pandemic, the revenues of healthcare entities is likely to fall by 15-20 per cent in FY21. Sugar stocks will be in focus amid reports that the Centre has asked sugar mills to divert the excess cane and sugar for the production of fuel grade ethanol. There will be some reaction in agriculture stocks as IMD said monsoon is expected to hit Indian shores in mid-May as a low pressure area has begun to form over the southeast Bay of Bengal and adjoining south Andaman Sea. There will be some earnings announcements too to keep the markets buzzing.

The US markets ended lower on Wednesday as Powell warned the coronavirus crisis raises longer-term concerns that could result in an extended period of low productivity growth and stagnant incomes. Asian markets are trading in red on Thursday following overnight fall on Wall Street.

Back home, snapping two-day losing streak, Indian equity benchmarks ended Wednesday’s session on higher note with gains of over two percent, led by gains in banking and financial sectors. Domestic bourses opened with massive gap-up, as Prime Minister (PM) has announced a stimulus package totalling Rs 20 lakh crore, with an aim to rescue the Indian economy reeling under the impact of coronavirus. This amounts to nearly 10 percent of India's Gross Domestic Product (GDP). PM said that economic package is for all classes of society, for all Indians and industry. The markets, nevertheless, gave up greater than half of these positive aspects within the first hour of trade, amid heavy sell off in global markets. Some concern also came as India's industrial output, measured in Index of Industrial Production (IIP), contracted by 16.7% in March 2020 mainly on account of poor show by mining, manufacturing and electricity sector due to the nationwide lockdown. The IIP had grown by 2.7% in March 2019. The IIP in the last fiscal contracted by 0.7% from 3.8% expansion in the 2018-19. But, domestic bourses still traded steady in the afternoon session, with gains of over 2 percent each, as sentiments remained up-beat with the World Economic Forum (WEF) stating that India has moved up two positions to rank 74th on a global ‘Energy Transition Index’ with improvements on all key parameters of economic growth, energy security and environmental sustainability. Markets held on to gains in late trade, as the New Development Bank of the BRICS countries has fully disbursed $1 billion emergency assistance loan to India to help it contain the spread of COVID-19 and reduce human, social and economic losses caused by the coronavirus pandemic. Finally, the BSE Sensex gained 637.49 points or 2.03% to 32,008.61, while the CNX Nifty was up by 187.00 points or 2.03% to 9,383.55.