The Indian markets look set to open with modest gains, depicted by the SGX Nifty which is up around 50 points, largely on the back of firm global cues. However, the continuously rising Covid-19 cases in India might cap the gains. The total count of coronavirus cases in India has now crossed 1,50,000, according to Worldometer. Besides, investors will focus on earnings announcements and stock-specific action today although the upcoming derivatives expiry is likely to add to the volatility.
Overnight, the US stocks closed higher although they climbed off the day's top on report that the Trump administration was weighing a range of sanctions on Chinese officials, businesses and financial institutions. Traders returned to the New York Stock Exchange after its trading floors were partially reopened after over two months. Overall, the Dow Jones ended 2.17 per cent up, the S&P 500 gained 1.23 per cent, and the Nasdaq Composite added 0.17 per cent.
Asian equities also rose on Tuesday as China’s promise of more stimulus cheered investors, who set aside concerns about tense rhetoric between China and the US. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 1.7 per cent overnight, with South Korea up 1.75 per cent and Chinese blue chips 1 per cent higher.
In commodities, crude prices were buoyed by Russia’s saying its oil output had dropped close to its target for May and June. Brent futures rose 64 cents to settle at $36.17 a barrel.
Another factor which might keep investor sentiment in check today will be the economic growth forecasts by various institutions. While both Fitch and CRISIL projected the Indian economy to contract 5 per cent in the current fiscal year due to a prolonged lockdown, SBI Research slashed economic contraction to 6.8 per cent from earlier 4.7 per cent.
Moreover, India Ratings and Research has said it expects the aggregate fiscal deficit of states to rise to 4.5 per cent of their combined gross state domestic product in FY21, in part due to the lockdown.
BofA Securities has said the Covid-19 pandemic will trigger a second wave of consolidation in India, resulting in big firms across sectors gaining further market share from smaller and unorganised players.
Meanwhile, corporate results will induce stock-specific movements. Deepak Nitrite yesterday reported a 106 per cent spike in its net profit to Rs 116 crore during the quarter while VIP Industries' Q4 Profit slipped to Rs 9.52 crore from Rs 25.28 crore in the year-ago quarter. Today, a total of 21 companies, including Dabur India, Sun Pharma, and United Spirits are scheduled to announce their results.
Reliance Industries is again expected to be in focus today after reports said that an overseas listing may be on the cards for Jio Platforms. According to sources, work in this regard may commence soon after RIL sells 20-25 per cent in Jio Platforms and the government issues direct listing guidelines.