ndian markets ended higher for the second straight session on Thursday, with auto and banking stocks leading the rally on account of short-covering on eve of F&O derivatives expiry. Today, the start of session is likely to be negative tracking weakness in global markets. Traders will be concerned with rising coronavirus cases in India. The total number of coronavirus cases in India has jumped to 165,386. With latest spike in corona cases, India has replaced Turkey to be the ninth-most-affected nation in this pandemic. India has the 5th-highest count of active cases, fewer only than the US, Brazil, Russia and France. India has also overtaken China in death toll; Covid-19 fatalities in the country now stand at 4,710. There will be some cautiousness with Care ratings report that the country's GDP growth is likely to be at 3.6 percent in January-March 2020 as economic activity came to a complete halt due to the countrywide lockdown imposed to contain the coronavirus outbreak. Traders may take note of Fitch ratings’ report that with incremental bank lending making up the bulk of the government's nearly Rs 21 lakh crore stimulus package, lenders face significant asset quality challenges which can increase their dud loan ratios by up to 6 percentage points over the next two years. Though, traders may take encouragement later in the day with Commerce and Industry Minister Piyush Goyal’s statement that India's exports will improve in May compared to April when shipments contracted by a record 60.28 per cent. Some support may also come with report that foreign direct investment (FDI) in India grew by 13 percent to a record of $49.97 billion in the 2019-20 financial year, according to official data. The country had received FDI of $44.36 billion during April-March 2018-19. There will be some buzz in the auto stocks with CRISIL Research report stating that the domestic automobile industry is headed for another year of double-digit sales decline this fiscal, given the extended lockdown to contain the COVID-19 pandemic. Banking stocks will be in focus as the Reserve Bank of India (RBI) imposed a penalty of Rs 6.50 crore on Karnataka Bank, Bank of India and Saraswat Co-operative Bank for non-compliance with central bank's Income Recognition and Asset Classification norms. There will be some reaction in cement stocks with report that cement production in the country is slated to fall by 25-30 per cent this fiscal as Covid pandemic has sucked demand from end user industries.
The US markets ended lower on Thursday amid report that President Donald Trump announced plans to hold a news conference about China on Friday. Asian markets are trading mostly in red on Friday as investors watch for market reaction to China’s controversial national security law for Hong Kong that was approved on Thursday.
Back home, extending their previous session’s rally, Indian equity benchmarks witnessed remarkable day of trade with frontline gauges garnering a gain of around two percent each on Thursday. Markets started the session on optimistic note with Commerce and industry minister Piyush Goyal’s statement that worst for the economy is over and revival is in the air. Traders took some support with former RBI governor Duvvuri Subbarao said that the country's economy is likely to decline by 5 percent in the current fiscal but may expand by around 5 percent in the next financial year. Traders overlooked SBI Ecowrap report stating that as the coronavirus pandemic and the nationwide lockdown severely impact the economy, India's gross domestic product for the first quarter of the financial year 2020-21 is likely to contract by over 40 per cent. Also, market participants paid no heed to S&P Global Ratings’ statement that the Indian economy will shrink by 5 per cent in the current fiscal as it joined a chorus of international agencies that are forecasting a contraction in growth rate due to coronavirus lockdown halting economic activity. Markets continued to trade upward to end near intraday high levels. Traders took note of report that India may need to inject up to Rs 1.5 lakh crore rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic. Separately, a report stated that with 7,260 cases, India has recorded its biggest single-day spike in total number of coronavirus cases to 158,086 - just a shade behind Turkey. Worldometer data also suggests that the country has seen 190 new deaths in the past 24 hours due to the infection. With this, India's death toll has risen to 4,534. Among states, Maharashtra has the highest number of Covid-19 cases, at 56,948. Finally, the BSE Sensex gained 595.37 points or 1.88% to 32200.59, while the CNX Nifty was up by 175.15 points or 1.88% to 9490.10.
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