Stocks may open on a weak note

Local stocks are likely to open on a weak note. The near term trend of market is likely to remain volatile due to reaction to March 2020 quarterly corporate earnings, trends in the number of coronavirus cases, crude oil prices, currency movements and global events.

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 114 points at the opening bell.

Market regulator Securities and Exchange Board of India (Sebi) on Thursday relaxed period of restriction to six months for raising further capital through buyback from the current one year amid the coronavirus pandemic. This relaxation will be applicable till 31 December 2020.

Overseas, Asian stocks were trading lower after an overnight report raised doubts over a potential coronavirus treatment.

In US, stocks ended near flat line on Thursday after a report that an experimental antiviral drug for the coronavirus flopped in its first randomized clinical trial.

The US House of Representatives overwhelmingly approved a $484 billion coronavirus relief bill on Thursday, funding small businesses and hospitals and pushing the total spending response to the crisis to an unprecedented near $3 trillion. The measure passed the Democratic-led House by a vote of 388-5, with one member voting present. House members were meeting for the first time in weeks because of the coronavirus pandemic.

The IHS Market flash purchasing managers index for the service sector fell to a record low in April, while the manufacturing PMI weakened to the lowest level in 11 years, as business activity has slumped due to the lockdowns to combat the coronavirus pandemic.

The flash services PMI fell to 27 from 39.8 in March while the manufacturing PMI dropped to 36.9 from 48.5.

Back home, the domestic equity barometers advanced on Thursday, in line with other Asian markets, as oil prices recovered from a collapse. Hopes of a fresh stimulus package to mitigate the economic damage caused by the coronavirus outbreak also lifted sentiment. The barometer index, the S&P BSE Sensex, jumped 483.53 points or 1.54% at 31,863.08. The Nifty 50 index advanced 126.60 points or 1.38% at 9,313.90.

The trading activity on that day showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 114.58 crore on 23 April 2020, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 338.27 crore on 23 April 2020, as per provisional data.

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