Markets to get flat-to-positive start on Friday

Indian markets ended sharply lower on Thursday as coronavirus worries persisted on mounting concerns that the infection rate may climb. Today, the markets are likely to get flat-to-positive start amid rally on Wall Street overnight coupled with the second tranche of relief measures by government. Finance Minister Nirmala Sitharaman has announced that the government will supply food to eight crore migrant workers in the country for the next two months. This along with promises of affordable housing and loans for street vendors. Besides, ruling out any impact of stimulus on the price situation, Chief Economic Advisor K V Subramanian said the COVID-19 pandemic has severely dented the demand for non-essential or discretionary goods, creating deflationary conditions. Though, traders may be concerned with report that the total number of coronavirus cases in India has been rising constantly. The country now is just a whisker from overtaking China - from where the virus originated. India's tally of cases now stands at 81,997 and 2,649 people have died of infections so far, according to Worldometer data. There may be some cautiousness as SBI research report stated that with the government's Rs 20 lakh crore stimulus package, the country's fiscal deficit is likely to be more than double to 7.9% in the current financial year. There will be some buzz in the power stocks as Finance minister Nirmala Sitharaman announced a one-time emergency fund of Rs 90,000 crore to help state-owned distribution companies (discoms) pay their dues to power generating companies (gencos) and transmission companies (transcos). There will be some reaction in restaurants industry related stocks with Crisil Research’s report that the COVID-19 pandemic is likely to cut 40-50% revenue of the country’s organised dine-in restaurants this financial year. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended in green on Thursday as traders once again expressed optimism about states partially reopening amid the coronavirus pandemic. Asian markets are trading mostly lower on Friday ahead of the release of Chinese economic data expected later in the day.

Back home, Indian equity benchmarks remained under selling pressure throughout the day and ended with losses of over two percent on Thursday, tracking heavy sell off in overseas markets as fears of a second wave of infections overshadowed prospects of re-opening economy. Markets made gap-down opening, despite a slew of announcements made by Finance Minister Nirmala Sitharaman targeting various sectors. The FM doled out measures worth Rs 5.94 trillion, focusing largely on MSMEs, NBFCs, power discoms, and real estate sector, with more such announcements to follow throughout the week. The sentiments remained weak 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. Local barometer gauges added losses in last hour of trade, as sentiments on the street weakened further 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. The street remained disappointed with Fitch Solutions stating that despite additional funding, the continued lack of medical investment and healthcare infrastructure will present challenges to mounting an effective response in India against COVID-19 pandemic. With 8.5 hospital beds per 10,000 citizens and eight physicians per 10,000, the country’s healthcare sector is not equipped for such a crisis. Finally, the BSE Sensex fell 885.72 points or 2.77% to 31,122.89, while the CNX Nifty was down by 240.80 points or 2.57% to 9,142.75.