Benchmarks trim opening losses; trade lower in early deals

Indian equity benchmarks made gap-down opening on Thursday following sell-off in the global peers. Markets trimmed some of their opening losses but remained below neutral lines with cut of around one third of a percent each in early deals, ahead of the F&O contracts June series expiry later in the day. Traders were concerned with 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. Adding more pessimism, the International Monetary Fund (IMF) projected a sharp contraction of 4.5% for the Indian economy in 2020, a historic low, citing the unprecedented coronavirus pandemic that has nearly stalled all economic activities. Though, markets trimmed some losses taking some support with Union Minister Nitin Gadkari launching 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.

On the global front, Asian markets are trading in negative territory following the overnight sell-off on Wall Street as the spiking number of new coronavirus cases in several US states dashed hopes of a quick economic recovery. Adding to worries, the International Monetary Fund or IMF forecast a deeper recession for this year, saying it now expects the global economy to shrink by 4.9 percent in 2020, compared to a 3 percent contraction projected earlier. Meanwhile, Japan will see April figures for its all industry activity index today. Besides, the markets in China, Taiwan and Hong Kong are closed on Thursday for the Dragon Boat Festival.

Back home, metal stocks were in focus with a private report stating 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. In scrip specific developments, Reliance Industries gained as the Competition Commission cleared Facebook's proposed acquisition of 9.99 percent stake in Jio Platform. On the other hand, Bharti Infratel tumbled after its board extended the long stop date for the long pending merger with Indus Towers to 31 August.

The BSE Sensex is currently trading at 34755.67, down by 113.31 points or 0.32% after trading in a range of 34499.78 and 34785.52. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.23%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Utilities up by 0.85%, FMCG up by 0.83%, Healthcare up by 0.69%, Energy up by 0.59%, Power up by 0.54%, while IT down by 1.36%, TECK down by 1.14%, Bankex down by 0.78%, Capital Goods down by 0.61%, Industrials down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.47%, ITC up by 1.67%, Ultratech Cement up by 1.06%, NTPC up by 0.98% and Reliance Industries up by 0.91%. On the flip side, Infosys down by 2.47%, Indusind Bank down by 1.44%, HDFC Bank down by 1.43%, Axis Bank down by 1.33% and Asian Paints down by 1.00% were the top losers.

Meanwhile, Union Minister Nitin Gadkari has rolled out the Credit Guarantee Scheme for subordinate debt to provide Rs 20,000 crore of guarantee cover to two lakh micro, small and medium enterprises (MSMEs). The funding scheme to help the distressed MSME sector entails a sub debt facility to the promoters of those operational MSMEs that are distressed or nonperforming assets (NPAs). It is also called the 'Distressed Assets Fund Subordinate Debt for MSMEs'.

According to the scheme, the guarantee cover worth Rs 20,000 crore will be provided to the promoters who can take debt from the banks to further invest in their stressed MSME units as equity. It was being felt that the biggest challenge for stressed MSMEs was in getting capital either in the form of debt or equity. Therefore, as part of Atmanirbhar Bharat package, on May 13, 2020, Finance Minister Nirmala Sitharaman had announced this scheme of subordinate debt to the promoters of operational but stressed MSMEs.

It is expected that this scheme would provide much required support to around two lakh MSMEs and will help in reviving the economic activity in and through this sector. It will also help in protecting the livelihoods and jobs of millions of people who depend on them. Promoters of MSMEs meeting the eligibility criteria may approach any scheduled commercial banks to avail benefit under the scheme. The scheme will be operationalised through Credit Guarantee Fund Trust for MSEs (CGTMSE).

The CNX Nifty is currently trading at 10272.75, down by 32.55 points or 0.32% after trading in a range of 10194.50 and 10285.70. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were ITC up by 2.35%, GAIL India up by 1.73%, Hero MotoCorp up by 1.70%, Bajaj Auto up by 1.65% and NTPC up by 1.03%. On the flip side, Bharti Infratel down by 3.33%, Infosys down by 2.63%, HCL Technologies down by 1.64%, Axis Bank down by 1.60% and Eicher Motors down by 1.52% were the top losers.

Asian markets are trading in red; Nikkei 225 slipped 227.63 points or 1.01% to 22,306.69, Straits Times dropped 33.77 points or 1.28% to 2,594.85, KOSPI fell 38.65 points or 1.79% to 2,122.86 and Jakarta Composite was down by 41.00 points or 0.83% to 4,923.74.