Benchmarks likely to get optimistic start for yet another day

Indian markets ended higher on Thursday led by gains in metals, auto, and IT stocks amid positive global cues. Today, markets are likely to continue gaining momentum for yet another day with optimistic start tacking firm global cues. Upbeat earning from many companies may add support to the markets. Traders will be taking encouragement as Union Minister Nitin Gadkari said the Centre has decided to increase production of anti-viral drug Remdesivir and it will be provided to people at government's price. Some support will come as secretary ministry of Earth Sciences, M Rajeevan said India’s southwest monsoon is expected to arrive over the Kerala coast on June 1, its normal onset date. Though the India Meteorological Department (IMD) will officially announce the 2021 monsoon onset date on May 15. Though, traders may be concerned with rising coronavirus cases. India reported a record 414,433 new infections and 3,920 deaths on Thursday, according to Worldometer. Also, the Supreme Court said the country needs to be prepared for the third wave of COVID-19 which experts say could be more harmful, especially for children, and emphasised upon the need to create buffer stock of oxygen. It asked the Centre not to reduce oxygen supply to Delhi from 700MT till further orders. There may be some cautiousness as Credit Suisse sharply lowered its real GDP growth forecast for this fiscal year to around 8.5-9 percent, citing economic disruptions in the country due to the raging second wave that is likely to shave 100-150 bps growth off the economy. Also, the International Monetary Fund said the recent jump in COVID-19 cases in India posed downside risks to the Fund's April forecast for 12.5% growth in India's economic output in fiscal years 2021 and 2022. The IMF will revisit that forecast when it issued a fresh World Economic Outlook in July. There will be some reaction in power stocks as India Ratings and Research (Ind-Ra) said restrictions following the second wave of the COVID-19 pandemic could impact energy demand growth recovery in the first quarter of this financial year.

The US markets ended higher on Thursday bolstered by an upbeat weekly jobless claims report, while vaccine makers dipped after US President Joe Biden backed plans to waive patents on COVID-19 shots. Asian markets are trading in green on Friday following overnight gains on Wall Street.

Back home, extending their previous session gains, Indian equity benchmarks ended the Thursday’s trade in green terrain with Sensex and Nifty settling above their crucial 48,900 and 14,700, respectively. Markets started the session on optimistic note as traders took support with a report that Roche India announced that the Central Drugs Standards Control Organisation (CDSCO) has provided an Emergency Use Authorisation (EUA) for its antibody cocktail Casirivimab and Imdevimab in India to treat COVID-19 patients. Soon market participants turned cautious and key gauges pared all their gains to trade near neutral lines after principal scientific advisor K Vijayaraghavan said the third phase of the pandemic is inevitable given the high level of circulating virus, without giving a timeframe. Meanwhile, the cumulative caseload has surged past 21 million, Worldometer showed. However, markets gained traction in second half of the day as traders turned optimistic with US President Joe Biden's decision to back waiving intellectual property rights on vaccines. This will quicken the vaccination process enabling countries like India to come out of the pandemic faster. Markets extended gains in last leg of trade as in order to prevent the COVID-induced health crisis from turning into a full-blown economic catastrophe, Finance Minister Nirmala Sitharaman has asked multilateral lending institutions like the Asian Development Bank (ADB) to extend support to developing countries. Besides, the Union Cabinet has given ex-post facto approval to the signing of Memorandum of Understanding (MoU) between the Ministry of External Affairs of the Government of Republic of India and Foreign, Commonwealth and Development Office (FCDO) of the United Kingdom on Global Innovation Partnership (GIP). Traders shrugged off report that S&P Global Ratings has slashed India's GDP growth forecast for the current financial year (FY22) to 9.8 per cent. The US-based rating agency in March had a 11 per cent GDP growth forecast for India for the April 2021-March 2022 fiscal on account of a fast economic reopening and fiscal stimulus. Finally, the BSE Sensex surged 272.21 points or 0.56% to 48,949.76, while the CNX Nifty was up by 106.95 points or 0.73% to 14,724.80.