Indian markets ended higher for a third straight session on Thursday, though the upside remained capped amid concerns that the coronavirus pandemic will have a cascading effect on the global as well as domestic economy. Today, the markets are likely to open in red following weakness in global markets amid escalating geopolitical tensions. Besides, India rejected Beijing's claim that Indian troops trespassed into Chinese territory, and accused the People's Liberation Army (PLA) of hindering patrols by Indian soldiers. Investors will be eyeing the Reserve Bank of India (RBI) governor Shaktikanta Das’ press conference to be held on later in the day. This will be third press conference of the governor in the context of COVID-19 related measures in last two months. Traders will be concerned with rising coronavirus cases in India. The country has recorded over 6,000 cases in a single day, taking its total coronavirus count to 118,226. As many as 3,548 people have died from the disease, according to Worldometer data. An emergency coronavirus vaccine would be available latest by January or February next year, said former director-general of the Indian Council of Medical Research (ICMR) N K Ganguly. There will be some cautiousness as India Ratings (Ind-Ra) expects most sectors to experience varying degrees of revenue contraction during FY21 due to demand and supply disruptions caused by the novel coronavirus, or COVID-19, pandemic. Though, some support may come later in the day as the government said it has released Rs 92,077 crore towards devolution of central taxes to states for April and May. This is a special gesture to ensure that the states' cash flows remain undisturbed at this crucial time. Auto stocks will be in focus with Union Minister Nitin Gadkari’s statement that the government is set to introduce a vehicle scrappage policy, under which recycling clusters may be established near ports, expressing confidence that India will emerge as the world's leading automobile manufacturing hub in five years.
The US markets ended lower on Thursday on a fresh wave of China-US tensions that raised doubts about the trade deal reached early this year between the world's two largest economies. Asian markets are trading in red on Friday as China announced plans to impose a national security law on Hong Kong and investors parsed through initial details coming out of the National People's Congress, China's biggest political event of the year.
Back home, in a volatile session, Indian equity benchmarks climbed off their respective day’s high levels in the last leg of trade but ended with gains for the third straight day on Thursday, due to the gains in Auto, FMCG and Metal stocks. Key indices made a cautious start but quickly gained traction, as the union cabinet cleared Rs 3 lakh crore micro, small and medium enterprise (MSME) funding scheme to mitigate the economic distress being faced by the small businesses in the light of the COVID-19 pandemic. Buying further crept in as the Trade Promotion Council of India (TPCI) said that with the government taking steps in the agriculture and food sector, industry will be able to achieve export target of $100 billion worth in the next five years by focusing on untapped global markets like Africa, Latin America, Middle East and Oceania. However, markets erased most of gains in late trade, as domestic rating agency ICRA warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 percent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. The agency also sharply revised downwards the growth contraction in Q1 to 25 percent as against the previous forecast of 16-20 percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously, which implies a recession. But, trade remained in green as some optimism remained among traders with the finance ministry’s monthly report on the macro economy stating that the government is ‘cautiously optimistic’ about the revival of growth later in this fiscal, despite the pandemic-induced lockdown, and the country’s current account may witness a small surplus in the June quarter. Finally, the BSE Sensex gained 114.29 points or 0.37% to 30,932.90, while the CNX Nifty was up by 39.70 points or 0.44% to 9,106.25.
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