The Indian indices are today staring at a gap-down opening after SGX Nifty declined over 100 points largely due to weak global cues. Any possible rally intra-day is likely to come on the back of PSU banks and NBFCs which should benefit from the slew of announcements made by Finance Minister Nirmala Sitharaman yesterday as part of the first tranche of the Rs 20 trillion stimulus package.
In yesterday's announcements, the FM focused mainly on MSMEs, NBFCs, power discoms, real estate sector and organised sector employees. She announced a Rs 3-trillion credit guarantee fund for collateral-free automatic loans, a Rs 20,000-crore subordinate fund for stressed MSMEs, and a Rs 50,000-crore equity infusion “fund of funds”. Additionally, she said the definition of MSMEs would be altered and that the government would disallow global participation in its procurement tenders for up to Rs 200 crore.
Sitharaman also announced a Rs 30,000-crore special liquidity scheme for NBFCs, housing finance companies, and micro-finance institutions. She expanded the Rs 1 lakh crore partial credit guarantee fund scheme by a further Rs 45,000 crore, and said that PFC and REC would provide Rs 90,000 crore worth of liquidity for power discoms.
For the real estate sector, she said the registration and completion dates for all registered projects expiring on or after March 25, 2020, will be extended by six months.
The finance minister will continue to make announcements pertaining to different sectors every day for the next few days. As per reports, the focus of today's announcements could be cash handouts and free foodgrain to the poorest beneficiaries. Later, there may be some tax relief aimed at the middle class and measures to benefit the sectors worst hit by Covid-19.
While these announcements are expected to lift investor sentiment, any such gain is likely to be capped due to weak global cues. Wall Street’s three major indexes closed lower for the second day in a row after Federal Reserve Chairman Jerome Powell warned of extended economic weakness due to the coronavirus pandemic and called for Congress to agree on additional fiscal support. The Dow Jones fell 2.17 per cent, the S&P 500 lost 1.75 per cent, and the Nasdaq Composite dropped 1.55 per cent.
Asian equities also slumped on Thursday. Hong Kong's Hang Seng index slipped 1.6 per cent, Australian ASX 200 fell 1.2 per cent, while Japan's Nikkei 225 fell 0.7 per cent.
In commodity markets, Brent crude prices fell 0.6 per cent to $29 a barrel. Meanwhile, OPEC further cut its forecast for global oil demand in 2020 further and now expects the same to fall by 9.07 million barrels a day this year.
Besides these, investors will today also eye the April wholesale price index inflation data which is set to be announced later in the day.
And, corporate results will continue to spark stock-specific action. A total of 18 companies including Biocon, Escorts, and Manappuram Finance are scheduled to announce their results today
Let's conclude today's podcast with India's coronavirus update. Total cases have reached 78,055 and 2,551 people have died from the Covid-19 infection so far, according to Worldometer data. Globally, over 44 lakh people have been infected.
Read by: Kanishka Gupta