Markets likely to get flat-to-positive start tracking gains in global peers

Indian markets ended Thursday's volatile session higher led by gains in metals and pharma stocks. Today, the markets are likely to get flat-to-positive start tracking gains in global peers. Traders will be taking encouragement with the government data showing that the country's exports jumped by 60.29 per cent to $34.45 billion in March even as the outbound shipments contracted by 7.26 per cent during the full 2020-21 fiscal to $290.63 billion. Imports too grew by 53.74 per cent to $48.38 billion in March, but dipped by 18 per cent to $389.18 billion during April-March 2020-21. Traders may take note of report that as Reserve Bank of India (RBI) concluded the first security acquisition programme (G-SAP) auction buying of Rs 25,000 crore in government bonds. As part of this, the government is scheduled to buy bonds worth 1 lakh crore from the secondary market in the three months to June 30 (Q1 of the current financial year). However, rising coronavirus cases may dampen sentiments in the markets. India reported 216,850 coronavirus disease (Covid-19) cases, the highest single-day spike so far since the pandemic broke out, Worldometer showed. The single-day spike comes a day after 200,739 Covid-19 cases were recorded. With this, India's Covid tally has shot up to 14,287,740 cases. Last week India replaced Brazil as the 2nd worst-hit nation in terms of total Covid-19 cases, now it has the second highest active cases too. The death toll from the deadly infection stands at 174,335. Meanwhile, according to the RBI data, India Inc's outward foreign direct investment in March 2021 nearly halved to $1.93 billion (around Rs 14,495 crore). Domestic firms had invested $3.86 billion as outward foreign direct investment (OFDI) in the year-ago month of March 2020. Aviation stocks will be in focus with Crisil’s report that lower domestic air traffic compared with pre-pandemic levels, together with high fuel prices and only a gradual recovery in international operations would result in domestic airlines posting Rs 9,500-10,000 crore net loss in FY 2022. There will be some reaction in consumer durables industry stocks with a private report stating that the consumer durables industry is likely to contract 12-15 per centin 2020-21, compared to the previous year mainly due to the loss witnessed in June quarter and the worst hit was the air conditioner segment. There will be some earnings announcements too to keep the markets buzzing.

The US markets ended in green on Thursday as a suite of stellar data suggested the recovery for the economy and corporate profits is accelerating. Asian markets are trading mostly higher on Friday as investors await the release of Chinese economic data.

Back home, Indian equity benchmarks ended the volatile day of trade near intraday highs on Thursday. Key gauges started the day slightly in green but soon entered into red terrain as Maharashtra announced lockdown-like stricter restrictions amid a continued spike in COVID cases. Selling in IT, Auto and TECK stocks dented the sentiments. Rising coronavirus cases weighted down on the markets. Breaking all records, India registered its biggest-ever single day spike with 199,569 fresh cases. With this, India's Covid tally has shot up to 14,070,890 cases. Markets extended losses as Moody’s said that the re-imposition of virus management measures following a surge in Covid infections will dent economic activity and could hurt market and consumer sentiment, and it warned of a threat to recovery. However, it said targeted containment measures, versus last year’s complete lockdown, and rapid vaccination will soften the hit on the economy. Sentiments also remain dampened on report that wholesale price-based inflation shot up to over 8-year high of 7.39 per cent in March on rising crude oil and metal prices. Also, the low base of March last year, when the data was computed with a low response rate due to the nationwide lockdown, contributed to a spike in inflation in March 2021. However, markets started recovering as traders opted to buy beaten down but fundamentally strong stocks. Hefty buying around last leg of trade mainly helped markets to end near intraday high points as traders turned optimistic after the Ministry of Finance in its latest report has showed that fund raising in FY 2020-21 was better than that in FY 2019-20 for both Public Issues and Rights Issues, despite the uncertainty prevailing in FY 2020-21 owing to COVID-19 pandemic. As per the report, during FY 2020-21, Rs. 46,029.71 crore and Rs. 64,058.61 crore were raised through Public Issues and Rights Issue respectively, as against Rs. 21,382.35 crore and Rs. 55,669.79 crore raised last year. Finally, the BSE Sensex gained 259.62 points or 0.53% to 48,803.68, while the CNX Nifty was up by 76.65 points or 0.53% to 14581.45.