The Indian markets are likely to open on a flat note today, as signaled by the SGX Nifty. Investors are likely to remain cautious at higher levels amid Moody's decision to downgrade India and rising cases of Covid-19 in the country. Moody's slashed India's long-term sovereign rating yesterday from ‘Baa2’ to ‘Baa3’ — a notch above junk. The global rating agency maintained its negative outlook, citing structural weaknesses, weak policy effectiveness, and slow reforms momentum even before the Covid-19 pandemic. Moody's feels India is heading for a sustained period of low growth, which its policymakers won’t be able to mitigate.
Meanwhile, India continues to witness a dramatic rise in the number of Covid-19 cases. According to Worldometer, India has recorded over 8,000 new cases and 221 deaths in the past 24 hours. The latest figures take the country's tally to 1.98 lakh, making India the 7th-most-infected country.
Besides these, corporate results will continue to pour in. A total of 18 companies, including the likes of Britannia, Indigo, and Motherson Sumi, are scheduled to announce their results today which will induce individual stock reactions.
According to analysts, Britannia may see up to 7 per cent volume decline in domestic business while revenue is likely to dip up to 4 per cent on a year-on-year basis. As for InterGlobe Aviation, seasonal slowdown and pricing pressure amid Covid-19-led disruption is likely to push the airline towards Rs 2,600 crore loss.
Amid this, Prime Minister Narendra Modi is scheduled to address the business community on his vision of "Getting Growth Back' at industry body CII's annual session later today.
Asian stocks followed Wall Street's lead. Japan’s Nikkei shot up over 1 per cent and Australian ASX 200 rose 0.15 per cent in early trading. In commodities, oil futures steadied and Brent was last up 0.3 per cent at $38.44 a barrel.
Now, let's look at some other top news of the day.
The India Meteorological Department has upgraded its forecast for the 2020 rains to 102 per cent of the long period average. The forecasts showed that barring the Northeast and eastern India, the rainfall will be towards the higher side of the ‘normal’.
After reporting near-zero sales in April, auto companies resumed dispatches in May. But the volumes were disappointing with sales of passenger vehicles declining 86 per cent year-on-year for leading players. More automakers will come out with their monthly sales data which might pressure the respective stocks.
And, in the end, Reliance Industries’ rights issue worth Rs 53,125-crore has garnered full subscription. The rights issue closes on June 3. The rights issue price is fixed at Rs 1,257, a discount of 17.3 per cent to the last closing price.
Read by Kanishka Gupta