LKP Securities

Published on 3/06/2020 9:14:07 AM

Opening Bell

Markets Likely To Get Positive Start AMID Firm Global Cues

Indian markets ended higher for fifth straight day on Tuesday amid optimism over gradual easing of the lockdown curbs coupled with positive cues from global markets. Today, the markets are likely to make positive start tracking firm global cues. Investors will be eyeing the PMI Services data for May to be announced later in the day. Traders will be getting some encouragement as Prime Minister Narendra Modi assured India Inc that growth in the economy will return soon as the government continues to pursue multiple reforms. He added that with unlock phase-1 India has already begun getting its growth back. Some support will also come as the World Bank urged countries to go for comprehensive policies to boost long-term growth along with short term measures to address health emergencies and secure core public services in the wake of the coronavirus crisis, amid indications that 60 million people could be pushed into extreme poverty in 2020. Though, there may be some cautiousness with the data compiled by Worldometer showing that India has seen a surge of over 8,500 cases in a day, taking its total number of coronavirus cases to 207,191. The country's death toll now stands at 5,829. 

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LKP Securities

Published on 2/06/2020 1:40:31 PM

Midday Review

Firm Trade Continues On Dalal Street

Firm trade continued over the Dalal Street in late morning deals, on account of positive cues from other Asian markets. In line with the larger peers, the broader indices were too holding notable gains, while Kotak Mahindra Bank gained the most among all major industry leaders on the BSE. Positive trade persisted also on the back of heavy buying at Realty and Telecom counters. Traders were getting relief, as Prime Minister Narendra Modi said India will definitely get its economic growth back as the government continues to pursue various reforms. He said the government has taken tough steps to fight the coronavirus pandemic and has also taken care of the economy.

On the global front, Asian markets were trading in green, after the manufacturing sector in Indonesia continued to contract in May, albeit at a lightly slower pace, with a manufacturing PMI score of 28.6. That's up from the record low of 27.5 in April, but it remains substantially beneath the boom-or-bust line of 50 that separates expansion from contraction.

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LKP Securities

Published on 2/06/2020 9:17:50 AM

Opening Bell

Markets Likely To Get Cautious Start On Tuesday

Indian markets ended higher on Monday and extended their gains for the fourth straight session, as firm global cues as well as enthusiasm over easing of lockdown curbs helped investors shrug off weak GDP data. Today, the markets are likely to make a cautious start amid rising coronavirus cases in India. The country’s total number of coronavirus cases is nearing the 200,000 mark, even as the country is in the midst of a watered-down Lockdown 5.0, or so-called India Unlock 1.0. Traders will be concerned as Moody’s Investors Service (Moody’s) downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. The rating agency has also downgraded India's local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local currency rating to P-3 from P-2. The outlook remains negative. There will be some cautiousness with the Centre for Monitoring Indian Economy (CMIE) data showing that India's unemployment rate in May rose to 23.48 per cent, marginally lower from 23.52% in April, reflecting the impact of coronavirus pandemic. Though, some support may come later in the day with the India Meteorological Department’s (IMD) statement that the Southwest monsoon arrived in India on June 01 with heavy rainfall over several places in Kerala, marking the commencement of the four-month long rainfall season. It also upgraded its forecast for 2020 rainfall to 102% of the Long Period Average (LPA), from the 100% in April. 

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LKP Securities

Published on 1/06/2020 1:15:18 PM

Midday Review

Gaining Rally Continues On Dalal Street

Indian equity benchmarks continued their gaining momentum in afternoon deals, tracking firm other Asian markets. Heavy buying over all sectoral indices including Consumer Durables and Metal supported key indices to maintain their upward rally, while Bajaj Finance gained the most among all major industry leaders on the BSE. In line with the larger peers, the broader indices were too showing their strong performance in noon deals. Traders overlooked a report that Indian manufacturers recorded another sharp deterioration in business conditions during May. Weaker demand drove output lower following April's record decline. Consequently, firms cut staff numbers at the quickest pace since data collection began over 15 years ago.

On the global front, Asian markets were trading in green, as China's manufacturing sector returned to expansion zone in May driven by the easing of restrictions related to the coronavirus, or Covid-19, pandemic. The survey results from IHS Markit showed that the headline manufacturing Purchasing Managers' Index rose to 50.7 in May from 49.4 in April.

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LKP Securities

Published on 1/06/2020 9:23:32 AM

Benhmarks To Make Optimistic Start Of New Week

Indian markets ended higher for the third straights session on Friday led by FMCG, auto and pharma stocks. Today, the start of news week is likely to be optimistic after the home ministry allowed areas outside containment zones to be reopened in a phased manner. Positive cues from the Asian peers may also support the domestic markets. Traders will be eyeing manufacturing PMI data to be out later in the day. The home ministry has extended the lockdown in containment zones till June 30, and directed that areas outside containment zones be opened up in a phased manner. All activities that were prohibited earlier will be opened up in areas outside Containment Zones in a phased manner. Some support will also come with Commerce minister Piyush Goyal’s statement that most startups will be eligible for additional liquidity and funding under the credit and funding support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package. Besides, Reserve Bank of India’s (RBI) data showing that the country's foreign exchange reserves swelled by $3.005 billion to a lifetime high of $490.044 billion in the week to May 22, mainly on account of a rise in foreign currency assets. In the previous week, the reserves had increased by $1.726 billion to $487.04 billion.

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LKP Securities

Published on 29/05/2020 5:53:07 PM

Closing Bell

Bulls Make Strong Comeback; Sensex Reclaims 32200 Mark

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.

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LKP Securities

Published on 29/05/2020 9:22:16 AM

Benchnarks To Make Negative Start on Friday

Indian 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. 

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