Markets to get gap-down opening on Thursday

Indian markets snapped a four-day winning streak and ended lower on Wednesday on account of heavy selling in banking, pharma and metal stocks. Today, the markets are likely to make gap-down opening tracking sell-off in the global peers. Market participants will also react to the burgeoning Covid-19 cases in India. The country saw a sharp spike of over 16,500 coronavirus cases. The country's total count of infections now stands at 472,985. More than 14,900 have died from the highly contagious virus. Besides, there will be some volatility in the markets as the F&O contracts for the June series are due to expire today. Traders will be concerned as the International Monetary Fund (IMF) projected a sharp contraction of 4.5 per cent for the Indian economy in 2020, a historic low, citing the unprecedented coronavirus pandemic that has nearly stalled all economic activities, but said the country is expected to bounce back in 2021 with a robust six per cent growth rate. However, some support may come later in the day as Union Minister Nitin Gadkari launched the Credit Guarantee Scheme for Sub-ordinate Debt to provide Rs 20,000 crore of guarantee cover to two lakh micro, small and medium enterprises (MSMEs). Meanwhile, in a relief for taxpayers, the Centre has extended the deadline for filing income tax returns (original as well as revised) for FY2018-19 to July 31, 2020. The last date for filing income tax returns for FY2019-20 has also been extended to November 30, 2020. Besides, easing compliance requirements due to continuing adverse impact of the coronavirus pandemic, market regulator SEBI gave another month's extension till July 31 to listed companies for submitting their fourth-quarter as well as annual results. There will be some buzz in the banking stocks as the government decided to bring Urban Co-operative Banks (UCBs) and Multi-State Co-operative Banks under the governance of the Reserve Bank of India (RBI). Metal stocks will be in focus with a private report that Aluminium Association of India (AAI) has approached the ministry of finance and the ministry of commerce and Industry to implement remission of duties or taxes on export products (RoDTEP) scheme, a move aimed to compete and substitute Chinese aluminium exports to major economies in the world.

The US markets settled sharply lower on Wednesday as it seemed traders could no longer ignore the spiking number of new coronavirus cases in several US states. Asian markets are trading in red on Thursday as surging US coronavirus cases, global trade tensions and an IMF downgrade to economic projections knocked confidence in a recovery.

Back home, snapping a four-session gaining run, Indian equity benchmarks ended Wednesday’s trade on a negative note with losses of over one and half percent, tracking a selloff in banking, telecom and financial stocks and weak cues from global markets. Key gauges kicked off session in the green, as the Finance Ministry cited green shoots of recovery in agriculture, manufacturing and services sectors, and said the prompt policy measures taken by the government and RBI have helped reinvigorate the economy with minimal damage. Sentiments remained positive with Fitch Solutions’ statement that the country’s farm trade, which was disrupted during the COVID-19 lockdown due to logistic issues in March-June, is expected to rebound in the second half of the calendar year 2020.  Some optimism also came with a private report stating that unemployment rate in the country dropped sharply to pre-lockdown level at 8.5% in the third week of June, after reaching a peak to 27.1% in the first week of May due to the lockdown. However, Indian indices pared all their gains and witnessed heavy selling pressure in the second half of the session, as traders turned cautious, with ratings agency S&P Global Ratings’ statement that companies in India face further potential rating downside if the recovery in corporate earnings is prolonged beyond 18 months. About 35 per cent of credit ratings on Indian corporates have either a negative outlook or are on 'CreditWatch' with negative implications. Domestic sentiments also got hit after India Ratings and Research in its report said that India’s economy is likely to shrink by 5.3 per cent this fiscal, the lowest GDP growth in the Indian history and the sixth instance of economic contraction. Finally, the BSE Sensex lost 561.45 points or 1.58% to 34,868.98, while the CNX Nifty was down by 165.70 points or 1.58% to 10,305.30.