Indian markets ended lower Friday dragged by selling in IT, FMCG and pharma stocks. Today, the start of the F&O series expiry week is likely to be positive tracking firm global cues. Some support will come with Union Minister Nitin Gadkari’s statement that the pandemic has caused a slowdown in India but the country's inherent resilience and capability will help it transform into a new India with a faster growth path fuelled by infrastructure. However, rising coronavirus cases may cap gains in markets. India reported 354,531 fresh coronavirus infections, taking the cumulative caseload to 17,306,300, Worldometer showed. There may be some cautiousness with report that overseas investors withdrew a net Rs 7,622 crore from Indian markets in April so far as a surge in COVID-19 cases and the consequent restrictions imposed by various states dent investors' sentiment. Traders may take note of 15th Finance Commission Chairman NK Singh’s statement that India’s tax revenue potential is lower by 4 per cent of GDP and the country needs to bring in deep reforms in the revenue management system. He also said an incentive mechanism for states needs to be worked out so that their policies are aligned to those of the central government. Meanwhile, the centre has allowed state governments to borrow 75% of their annual market borrowing limit of 4% of their respective Gross State Domestic Product (GSDP) in the first nine months of the current fiscal year. The move comes during a time where there are revenue constraints on state governments and the coronavirus delays recovery. Auto stocks will be in focus as India Ratings and Research (Ind-Ra) in its latest report stated that the second wave of COVID-19could pose downside risks to the domestic auto industry demand in the near term. It said the demand for commercial vehicles (CVs) may revive in the second quarter of 2021-22 as economic activities improve, and also due to the lower capacity in the system after consecutive double-digit decline in 2019-20 and 2020-21. There will be some reaction in oil & gas sector stocks as oil marketing companies keep fuel prices unchanged for tenth straight day. Petrol and diesel prices were unchanged across the four metros for the 10th day in a row. There will be lots of important earnings announcements too, to keep the markets in action.
The US markets ended higher on Friday as increased factory output and housing data supported expectations of a swift economic recovery, while big tech stocks rose in anticipation of strong earnings reports. Asian markets are trading mostly in green on Monday as signs the world economic recovery was well on track bolstered risk appetite, while the US dollar slipped to a two-month low.
Back home, Indian equity benchmarks ended the volatile day of trade in red terrain on Friday with frontline gauges settling below their crucial 47,900 (Sensex) and 14,350 (Nifty). Markets started the day on pessimistic note amid concerns over continues rising coronavirus cases in the country. India reported 332,503 fresh coronavirus infections on Friday, taking the cumulative caseload to 16,257,309, Worldometer showed. Sentiments also remain dampened after S&P Global Ratings said the Indian economy is projected to grow at 11 per cent in the current fiscal, but flagged the substantial impact of broader lockdowns on the economy. In its report on Asia-Pacific Financial Institutions, S&P said the control of COVID-19 remains a key risk for the economy. New infections have spiked in recent weeks and the country is in the middle of a second pandemic wave. Also, rating agency Fitch Ratings has affirmed India’s long-term foreign-currency Issuer Default Rating (IDR) at BBB- with a negative outlook. Markets turned positive in noon deals as traders opted to buy some beaten down but fundamentally strong stocks after Finance Minister Nirmala Sitharaman said the industry is in recovery mode and several Budget proposals are on course, including disinvestment, despite a fresh wave of coronavirus infections and local lockdowns. Traders also took some relief with Chief Economic Adviser K V Subramanian’s statement that the impact of the second wave of COVID-19 on the Indian economy may not be very large. He also said predicting the second wave was a real problem for researchers across the globe. However, the recovery proved short lives and markets once again slipped in red terrain after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised down India’s FY22 real GDP growth forecast to 10.1 per cent, from earlier projection of 10.4 per cent, citing the second wave of COVID-19 infections and slower pace of vaccination. At a time when large parts of the country are experiencing tremendous pressure on medical infrastructure, it expects the second wave to start subsiding by mid-May. Finally, the BSE Sensex fell 202.22 points or 0.42% to 47,878.45, while the CNX Nifty was down by 64.80 points or 0.45% to 14,341.35.
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