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Published on 30/04/2020 9:05:53 AM | Source: LKP Securities Ltd

Markets To Make Gap-Up Opening Of F and O Expiry Session - LKP Securities

Posted in Top Stories| #Market Outlook #LKP Securities Ltd

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Indian markets ended higher with solid gains on Wednesday amid hopes that the government will unveil another stimulus package this week to spur the economy. Today, the start of the F&O series expiry session is likely to be gap-up following the firm cues from global markets. Traders will be getting some encouragement with Niti Aayog CEO Amitabh Kant’s statement that India's COVID-19 recovery rate has improved from 15% on April 19 to 24.56% as of April 29. Some support will also come with report that asserting that India was proud of its farmers, Prime Minister Narendra Modi said the government was continuously taking steps to ensure the interests of those who feed the entire country were protected. He also said his government was committed to protect the rights of these anndataas (food providers). Traders may take note of report that Union labour and employment minister Santosh Kumar Gangwar will hold an interaction with trade unions and industry representatives to discuss ways to generate employment and restart economic activities, on the occasion of International Labour Day on May 1. Though, some cautiousness may be there with report that in India, the total coronavirus cases are nearing the 32,000-mark. The death toll, meanwhile, has climbed to 1,008. There will be some buzz in the infra stocks with the Finance Ministry’s statement that to augment infrastructure and create jobs in the country, a government task force has projected total investment of Rs 111 lakh crore in infra projects over five years. Power stocks will be in focus with ICRA’s report that demand for power is likely to fall by 1% in the current fiscal with discom losses widening by almost Rs 20,000 crore as the coronavirus lockdown continues to impact economic activities. There will be some reaction in aviation stocks with global airlines body IATA’s statement that Indian domestic air passenger traffic fell by 11.8% in March as compared to the corresponding month last year, indicating the impact of Covid-19 on the country's aviation sector. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended in green on Wednesday as hopes for an effective COVID-19 treatment prompted a broad rally and helped investors shrug off bleak GDP data. All the Asian markets are trading higher in early deals on Thursday tracking Wall Street’s rally after positive trial results of an experimental COVID-19 treatment.

Back home, Indian equity benchmarks continued their winning run for third straight day and ended with gains of around two percent on Wednesday, tracking gains in Asian markets, as several countries eased coronavirus-induced lockdowns. Key indices made an optimistic start and stayed in green for whole day, as investors took encouragement with private report that Finance Minister Nirmala Sitharaman is likely to announce this week a second stimulus for the economy hit by a nationwide lockdown triggered by the coronavirus pandemic, concluding multiple rounds of discussions within the government. Traders also found some solace after markets regulator SEBI extended the deadline by six months for mutual funds to comply with the highest limits of investment in unlisted non-convertible debentures (NCDs). Mutual funds were required to comply with the highest investment limit of 15 per cent and 10 per cent in unlisted NCDs by March 31 and June 30, respectively. Buying got intensified in the late afternoon session, as sentiments remained buoyant with the report that the Asian Development Bank has approved a $1.5 billion (about Rs 11,400 crore) loan to India to help fund its response to the novel coronavirus pandemic, including support for immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections. Market participants paid no heed towards Moody's Investors Service in its report titled - Global Macro Outlook 2020-21 (April 2020 update), has cut India growth forecast to 0.2 percent, from 2.5 percent projected in March for calendar year 2020. For 2021, Moody's expects India's growth to rebound to 6.2 percent. It said the economic costs of coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly. Finally, the BSE Sensex gained 605.64 points or 1.89% to 32,720.16, while the CNX Nifty was up by 172.45 points or 1.84% to 9,553.35.

 

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