Sensex, Nifty rally in early trade

Domestic stocks are trading with strong gains on buying demand in index pivotals after a gap-up opening. At 9:23 IST, the barometer index, the S&P BSE Sensex, was up 452.03 points or 1.44% at 31,895.41. The Nifty 50 index was up 132.80 points or 1.44% at 9,331.85.

The S&P BSE Mid-Cap index was up 1%. The S&P BSE Small-Cap index was up 0.9%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 858 shares rose and 229 shares fell. A total of 41 shares were unchanged.

Cues to watch:

Indian stocks are expected to trade volatile in the near term, tracking domestic news regarding the spread of infections. Rising cases of novel coronavirus, or COVID-19, and government stimulus package will be closely watched. Globally, investors await monthly nonfarm payrolls and unemployment report which will be released later today.

The government is reportedly working on a comprehensive financial package not only for MSMEs but for all sectors of the economy. Government of India, Prime Minister's Office and the Department of Economic Affairs are already working on a package, which includes not only the MSME but also the entire industry, reports indicated.

Meanwhile, officials from Beijing and Washington are reportedly scheduled to hold a call as soon as next week to discuss progress in the phase-one trade pact which has been in doubt as President Donald Trump accused China of mishandling the coronavirus outbreak and threatened to quash the agreement. U.S. negotiator Robert Lighthizer and his counterpart in China Vice Chairman Liu He will be on the call, reports indicated.

Domestic shares ended with modest losses on Thursday, 7 May 2020. A rapid increase in new cases of coronavirus in India in the last few days spoiled investors sentiment. The barometer S&P BSE Sensex lost 242.37 points or 0.76% at 31,443.38. The Nifty 50 index fell 71.85 points or 0.78% at 9,199.05.

Foreign portfolio investors (FPIs) bought shares worth Rs 19,056.49 crore, while domestic institutional investors (DIIs), were also net buyers to the tune of Rs 3,818.41 crore in the Indian equity market on 7 May, provisional data showed. The spike is due to stake sale in Hindustan Unilever through block deals by Horlicks and GlaxoSmithKline.

Stocks in news:

Reliance Industries (RIL) rose 2.32%. RIL and Jio Platforms announced today that Vista Equity Partners (Vista) will invest Rs 11,367 crore into Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. Vista's investment will translate into a 2.32% equity stake in Jio Platforms on a fully diluted basis, making Vista the largest investor in Jio Platforms behind Reliance Industries and Facebook.

Tata Motors gained 2.13%. Tata Motors announced that the company has decided to withdraw the issue for private placement of unsecured NCDs aggregating up to Rs 1000 crore in view of the higher cost expectations from the market participants due to the tight money market conditions. The company continues to have sufficient liquidity and would consider issuance of NCDs at appropriate time and under normalized market conditions with necessary approvals.

SKF India jumped 6.18% to Rs 1429.30. SKF India announced that the board of directors of the company has recommended a special dividend of Rs 130 per share for the financial year ended 31 March 2020.

RBL Bank rose 0.62%. RBL Bank reported 54% slide in net profit to Rs 114 crore on 33% rise in net total income to Rs 1522 crore in Q4 March 2020 over Q4 March 2019. The board of RBL Bank approved to issue debt for an amount not exceeding Rs 3000 crore on private placement basis.

Kokuyo Camlin dropped 6.05%. Kokuyo Camlin has resumed partial operations at its manufacturing plant located at Tarapur, Maharashtra with restricted movement of manpower as prescribed, while taking all the necessary steps for ensuring complete sanitization and social distancing norms.

Global Markets:

Overseas, Asian stocks were trading higher tracking overnight gains in US stocks.

The Reserve Bank of Australia on Friday released its statement on monetary policy, where it highlighted that global GDP is expected to fall sharply in the first half of 2020.

In US, stock benchmarks closed in positive territory Thursday, finishing off their best levels, with a rally in shares of energy and financials powering the day's moves. A rally in the technology-related Nasdaq helped to drive the index retrace its coronavirus-induced selloff of the past two months.

Data on Thursday showed an unexpected surge in export activity in the world's second-largest economy in April, growing 3.5% from the previous year. That marked its first positive read since December just as the novel strain of coronavirus was identified in Wuhan, China. That said, imports were soft, falling 14.2% from the year-ago period.

Weekly jobless claims report showed that 3.2 million jobs were lost in April, bringing the total seeking jobless benefits in the U.S. over the past six weeks to 33 million, or approximately one out of every five eligible workers.

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