Markets to get positive start on Tuesday

Indian markets ended sharply lower on Monday, mirroring losses in other global markets amid reports that coronavirus infections in China, Japan and the United States raised concerns of a resurgence of the virus and added to uncertainty about growth outlook. Today, the markets are likely to make positive start following firm global cues. Prime Minister Narendra Modi will hold a video conference with the leaders of 21 states and union territories today and tomorrow to discuss the increasing number of coronavirus cases in the country. Though, rising coronavirus canes may impact sentiments. The total number of coronavirus cases in the country has reached 343,026 and nearly 10,000 have died from the highly contagious disease. Traders may be concerned with the data released by the Commerce and Industry Ministry showing that contracting for the third straight month, India's exports declined 36.47 percent in May to $19.05 billion, mainly on account of drop in shipments by key sectors such as petroleum, textiles, engineering, gems and jewellery. Imports too plunged 51 percent to $22.2 billion in May, leaving a trade deficit of $3.15 billion, compared to $15.36 billion in the same month previous year. Meanwhile, India may impose anti-dumping duty on imports of polystyrene, used in refrigerators and air conditioners, from Iran, Malaysia, Singapore, Chinese Taipei, UAE and the US with a view to guard domestic players from cheap imports from these countries. Also, Retirement fund body Employees Provident Fund Organisation (EPFO) said it has launched a multi-location claim settlement facility to expedite member claims, moving away from the existing system of geographical jurisdiction for claim processing. There will be some reaction in agriculture stocks as buoyed by increase in futures prices and the minimum support price (MSP), cotton farmers have increased acreage under the cash crop by shifting from maize and soybean in the early kharif sowing season.

The US markets ended higher on Monday as traders continued to express optimism about the economy as the New York Federal Reserve released a report showing regional manufacturing activity steadied in June after seeing sharp contractions in April and May. Asian markets are trading in green on Tuesday after the Federal Reserve’s fresh move to support financial markets through the coronavirus pandemic cheered investors.

Back home, Indian equity indices ended Monday’s session on lower note with losses of over one and half percent, as a second wave of infections throughout the world, including China and US, gave jitters to investors. Domestic stock markets started the week on a negative note, as traders were cautious as the government has not released the headline IIP growth for April, Consumer Price Inflation (CPI) for May saying that it is not appropriate to compare these readings with the previous months. The March IIP reading has been revised further lower to -18.3 percent versus -16.7 percent said earlier. Besides, it said the May CPI combined food price index is at 9.28 percent and risen up 0.1 percent versus the April reading. Sentiments remained down-beat with private report stated that with the protracted lockdown pushing the Indian economy into deep recession in the current fiscal, the escalating new COVID-19 cases after easing of restrictions poses further downside risks to the economic outlook. Key gauges added more losses in afternoon session to trade near day’s low, amid India saw a deflation in wholesale prices in May as the wholesale price index (WPI) contracted 3.21 per cent. Due to limited information available for the month of April 2020, the provisional figures of May-2020 are compared with final figures of March, 2020.  However, Indian market recovered slightly in the last hour of trading session, taking support from the Finance Ministry’s statement that public sector banks (PSBs) have disbursed Rs 14,690.84 crore till June 11, under the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the Micro, Small & Medium Enterprises (MSME) sector, hit hard by the coronavirus crisis. Finally, the BSE Sensex lost 552.09 points or 1.63% to 33,228.80, while the CNX Nifty was down by 159.20 points or 1.60% to 9,813.70.