Markets to get slightly positive start on Tuesday

Indian markets ended higher on Monday with banking, pharma and metal stocks leading the surge despite the threat of rising coronavirus infections both at home and abroad. Today, the start of the session is likely to be marginally in green mirroring positive global cues. Traders will be getting encouragement with Commerce and industry minister Piyush Goyal’s statement that India's exports in the first two weeks of June have reached above 80% level of the same period last year and would be only 10-12% lower in the month compared to June 2019. Some support will also come with Niti Aayog Vice Chairman Rajiv Kumar’s statement that India will transform into a middle-income country from a lower middle-income economy by 2030. Kumar also said that India will witness a recovery in investment cycle by April 2021 and beef up efforts on trade front as well. Though, traders may be concerned with rising coronavirus cases in the country. India has again recorded nearly 15,000 cases of coronavirus in a day, taking its total to 440,450. The country's death toll has crossed the 14,000 mark. Also, there may be some cautiousness as Moody's Investors Service projected the Indian economy to shrink 3.1 per cent in 2020 and said clashes with China on the border also suggest rising geopolitical risks in the Asian region where countries are particularly vulnerable to changes in geopolitical dynamics. there will some buzz in the select banking stocks as Fitch Ratings revised the outlook on the Long-Term Issuer Default Ratings (IDR) of nine Indian banks to Negative from Stable. Information and Technology (IT) stocks will be in focus after the US President Donald Trump signed an order restricting H-1B, L-1 and other temporary work permits. There will be some reaction real estate stocks with a private report that the overall lending to real estate in India declined by 46 per cent in FY20 with Rs 1.2 lakh worth of loans sanctioned in FY20.

The US markets ended higher on Monday as traders continued to express optimism the US economy will quickly recover from the coronavirus-induced setback. Asian markets are trading mostly in green on Tuesday following gains on Wall Street.

Back home, in a highly volatile session, Indian equity benchmarks gave up most of their gains but managed to end Monday’s session on optimistic note, led by gains in Power, Metals and Healthcare stocks, in contrast with the global peers.  Markets made optimistic start and traded with decent gains as traders took encouragement with Chief Economic Advisor Krishnamurthy V Subramanian’s statement that demand in the economy will increase when the uncertainty regarding health in the wake of COVID-19 outbreak ends. Some support also came as Industry body CII has identified measures in key areas for improving India’s ease of doing business scenario that can help the country achieve self-reliance. It suggested that micro, small and medium enterprises (MSMEs) need a special helping hand, and should be exempted from approvals and inspections for three years under state laws while following all rules. Domestic indices extended their upside in late afternoon session, taking support from Finance Minister Nirmala Sitharaman’s statement that the government is closely monitoring situation in consultation with banks so that relief measures announced by the government are effectively percolated at ground levels especially the transmission of repo rate cuts to corporates and consumers in order to stimulate the economy, hit hard by coronavirus (COVID 19) pandemic. However, key indices trimmed most of gains to come off day’s high as Fitch Ratings has revised the outlook to negative from stable on long-term issuer default ratings (IDRs) of nine India-based banks while affirming their IDRs, support ratings and support rating floors. The rating actions follow Fitch's revision of the outlook on the BBB-minus rating on India to negative from stable due to the impact of escalating coronavirus pandemic on the country's economy. Finally, the BSE Sensex gained 179.59 points or 0.52% to 34,911.32, while the CNX Nifty was up by 66.80 points or 0.65% to 10,311.20.