Benchmarks likely to make flat-to-positive start

Indian markets ended a volatile session modestly higher on Tuesday, with financials and IT companies pacing the gainers in the wake of positive global cues and comments from the finance ministry that green shoots have started to emerge in the domestic economy. Today, the markets are likely to make flat-to-positive start. Investors will be looking ahead to the Cabinet meeting in which a couple announcements under the Atma Nirbhar Bharat Abhiyan will reportedly be considered. Traders will be getting some encouragement with NITI Aayog CEO Amitabh Kant’s statement that India will bounce back with a vengeance with green shoots in the economy already being visible, amidst the multiple challenges thrown up by the Covid-19 pandemic. Some support will come as the finance ministry said banks have sanctioned loans of about Rs 1,14,502 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector reeling under the economic slowdown caused by the COVID-19 pandemic. Besides, the CBIC said the GST Implementation Committee is considering the demand for extending the due date for filing of annual return for 2019-20 by composition dealers. However, subdued global cues coupled with rising coronavirus cases may impact the markets. In India, there now are 743,481 coronavirus cases, while the death toll in the country is now above 20,600. More than half of all cases in the country are from just three states - Maharashtra, Tamil Nadu and Delhi. The World Health Organization (WHO) said it is looking into claims of airborne transmission coronavirus in poorly ventilated closed settings and will soon issue a scientific brief on the issue. Traders may react with a private report that the country’s economy is likely to show a double-digit contraction in the April-June quarter due to the restriction on economic activities on account of the COVID-19 pandemic. there will be some reaction in Palm oil sector related stocks with report that palm oil demand in India is set to plunge this year as coronavirus lockdowns slash food service sector demand and households opt for alternatives at the supermarket. India's palm oil imports could plunge 20 percent from a year ago to 7.5 million tonnes in the 2019/20 marketing year ending on October 31.

The US markets ended lower on Tuesday as a lack of major US economic data allowed concerns about the coronavirus pandemic to resurface. Asian markets are trading mixed on Wednesday as concerns around the coronavirus pandemic continue to linger.

Back home, Indian equity indices remained extremely volatile throughout the session and somehow managed to end in green terrain on Tuesday, amid hopes of an economic recovery despite a rise in cases of coronavirus. With this, the equity indices registered their fifth successive session of gains. Both the indices made a slightly positive start, as traders took some solace with the Ministry of Finance asserting that green shoots have started to emerge in the domestic economy. In its monthly macroeconomic report, the ministry highlighted that total digital retail financial transactions via NPCI platforms rose sharply from Rs 6.71 lakh crore in April to Rs 9.65 lakh crore in May, a sign of revival in economic activity. Some support also came with a private report stating that India's Global Real Estate Transparency Index ranking has improved by one notch to 34 on the back of regulatory reforms, better market data and green initiatives. However, domestic bourses gave up all gains and fell sharply during the late morning deals, as traders got anxious with India Ratings and Research’s report that the impact of Covid-19 and the associated policy response may result in an additional Rs 1.67 lakh crore of debt from the top 500 debt-heavy private sector borrowers turning delinquent between FY21 and FY22. But, the bulls were seen ruling Dalal Street once again in the dying hours of trade as the benchmark indices climbed out of the negative territory to inch up, as some optimism remained among traders with a Ficci-Dhruva Advisors industry survey report stated that the opening up of India's economy post lockdown and implementation of the economic package unveiled by the government have started showing results on the ground with initial signs of improvement in the performance of businesses now visible.   Finally, the BSE Sensex gained 187.24 points or 0.51% to 36,674.52, while the CNX Nifty was up by 36.00 points or 0.33% to 10,799.65.