Markets to start session on optimistic note, TCS Q1 result eyed

Indian markets snapped five-day winning streak and ended lower with around a percent cut amid concerns over a delay in economic recovery as new coronavirus cases continued to surge. Today, the start of session is likely to be positive after a rally in US markets overnight and similar trends in Asian peers. Traders will be taking encouragement as the Cabinet approved the development of affordable rental housing complexes (ARHCs) for urban migrants and poor as a sub-scheme under the Pradhan Mantri (PM) Awas Yojana. This initiative was first announced by Finance Minister Nirmala Sitharaman as part of the Atmanirbhar Bharat package in May. Some support will also come with a private report that hiring activities in June remained muted on a year-on-year basis, but registered an increase over the previous month amid nationwide relaxations of coronavirus-induced lockdown norms. Traders may take note of report that the National Association of Software and Services Companies (Nasscom) has launched Nasscom Launchpad in New Jersey, to promote cross border trade through partnerships. However, there may be some cautiousness with government data showing that India's total number of Covid-19 cases has now jumped to 768,206, and the death toll stands at 21,144, with over 24,000 new cases. Meanwhile, the SBI Ecowrap report said that India needs to take a calibrated call in reducing import dependence from China and not through sudden stops. The agriculture stocks will be in focus as the government approved setting up an agri-infra fund with a corpus of Rs 1 lakh crore to provide financial support to agri-entrepreneurs, start-ups, agri-tech players and farmer groups for infrastructure and logistics facilities. There will be some reaction in insurance stocks as the government, post a cabinet meeting, said that the merger process of three ailing public sector general insurance companies has been stopped and instead the focus will be on their profitable growth. Traders will be looking ahead to the start of April-June (Q1) 2020 earnings season for IT companies, with the industry’s big-wigs Tata Consultancy Services scheduled to declare its Q1 results later in the day.

The US markets ended considerably higher on Wednesday as investors looked past tensions between Washington and Beijing and sought out tech companies thought to be insulated from rising coronavirus infections. Asian markets are trading mostly in green on Thursday as investors await the release of Chinese inflation data.

Back home, Indian benchmark indices have witnessed a choppy trade for the most part of the session and came under heavy pressure in the last minutes of the trade, thus snapping the five-day gaining streak. Domestic markets followed volatility in global equities as rising number of COVID-19 cases across the world stoked concerns over economic recovery. Today’s session started with marginal gains, as traders took some support 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. Adding some optimism, 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. However, key indices turned highly volatile in late morning session, as market participants got anxious 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. After that, market witnessed sudden fall in final hour of trade and settled with losses of nearly a percent, as sentiments weakened further with Crisil Research’s survey report stating that as much as 90 per cent of private equity and venture capital investors foresee a decline in fund-raising activities over the next 6 to 12 months because of the Covid-19 pandemic. Meanwhile, Union minister for road transport and highways Nitin Gadkari chaired a high-level meeting with railway minister Piyush Goyal and environment minister Prakash Javadekar to expedite pending infrastructure projects in the country, particularly those stuck due to inter-ministerial approvals. A key issue discussed in the meeting was outstanding forest clearance for 187 highway projects. Finally, the BSE Sensex lost 345.51 points or 0.94% to 36,329.01, while the CNX Nifty was down by 93.90 points or 0.87% to 10,705.75.