Sensex ends 81 points lower; financial stocks drag

Closing bell

Benchmark Sensex gave up all its early gains to end 81 points lower on Monday, dragged by losses in financial stocks as lenders beefing up provisions against Covid-19 risks stoked slippages worry.

Besides, spiking Covid-19 cases in the country and tepid cues from global markets weighed on investor sentiment.

After gyrating over 800 points during the day, the 30-share index settled 81.48 points or 0.26 per cent lower at 31,561.22.

Similarly, NSE Nifty fell 12.30 points, or 0.13 per cent, to 9,239.20.

ICICI Bank was the top laggard in the Sensex pack, cracking over 5 per cent, followed by Kotak Bank, HUL, HDFC, IndusInd Bank, HDFC Bank and Nestle India.

On the other hand, Hero MotoCorp, Bajaj Auto, Maruti, TCS and HCL Tech were among the gainers.

Joining peers, ICICI Bank made Covid-19 related provisions of Rs 2,725 crore to further strengthen the balance sheet -- causing worries on fiscal slippages front.

“Indian market opened on a positive note following global cues as trade-war fears receded and more countries announced plans to ease their lockdown restrictions amid hopes of global economies reopening, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.

The traders also took note of Prime Minister Modi’s meeting with chief ministers of all states which is expected to discuss the plan for exit from the ongoing nationwide lockdown to prevent the spread of coronavirus.

However, the market couldn’t hold the strength during the day as selling pressure was witnessed in heavy index weighing sectors like financial and bank stocks, erasing majority of gains in afternoon session as Covid-19 related one time provision were seen undercutting the earnings on the financial companies, he added.

Globally, bourses in Hong Kong and Tokyo ended on a positive note, while this in Shanghai and Seoul closed with losses.

Stock exchanges in Europe were trading significantly lower in early deals.

International oil benchmark Brent crude futures were trading 2.39 per cent lower at $30.23 per barrel.

On the currency front, the rupee slipped 19 paise to close at 75.73 against the US dollar.

In India, the death toll due to Covid-19 rose to 2,206 and the number of cases climbed to 67,152, according to the health ministry.

Globally, the number of cases linked to the disease has crossed 41 lakh and the death toll has topped 2.82 lakh. - PTI

Dollar edges up, yen falls as easing lockdowns boosts risk appetite

The dollar edged up in early London trading on Monday, while the Japanese yen weakened as risk appetite was boosted by more countries making moves to re-open their economies, despite the coronavirus continuing to spread.

Japan said on Monday it could end its state of emergency in many regions this week and New Zealand said it could ease restrictions on Thursday. The UK has also set out plans to ease the lockdown while in France shops re-opened on Monday. Click here to read more on the global forex markets .

Sensex, Nifty trim morning gains

The benchmark indices, which surged over 1 per cent in opening trade, dropped lower ahead of the close on Monday.

The BSE benchmark held gains of 77 points or 0.25 per cent at 31,720, while the Nifty was up 38 points or 0.41 per cent at 9,289.

The top gainers on the 30-share benchmark were Bajaj Auto, HeroMoto Corp, Maruti, TCS and HCL Tech, while the laggards were ICICI Bank, IndusInd Bank, Kotak Bank, HDFC and Tech Mahindra.

Among the BSE sectoral indices, the auto indiex gained 4.82 per cent in late session.

European stocks climb as investors cling to lockdown loosenings

The pan-European STOXX 600 was up 0.5 per cent. File Photo

European shares climbed on Monday as investors clung to signs that more countries were restarting their economies and looked past reports of a pick-up in new coronavirus cases.

The gains for stocks, while small, began in Asia where markets cheered further loosening of coronavirus restrictions in the region - New Zealand eased some curbs from Thursday, while Japan plans to end a state of emergency for areas where infections have stabilised. Click here to read more on the European markets .

Playing it safe has paid off for NPS investors

It has been 11 years since the National Pension System (NPS) was opened up for all citizens in May 2009 and, in this period, conservatism seems to have paid off for those investors. The average returns of Tier I schemes that invest in government securities (Scheme G) and other fixed income instruments (Scheme C) have outperformed equity (Scheme E) and alternate assets (Scheme A) categories over three-, five- and ten-year time-frames. Click here to read more on NPS investments .

Why ICICI Bank stock has come under pressure post Q4 results

A significant rise in slippages, sharp increase in write-offs, sizeable Covid-related provisions and slowdown in domestic loan growth are key highlights that sum up the latest March quarter results for ICICI Bank. Click here to read more on the ICICI Bank stock price movement.

Oil prices fall on supply glut, fears of second virus wave

Oil prices slipped more than 1 per cent on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic cancelled out support from supply cuts at some of the world's top producers.

Brent crude futures were down 51 cents, or 1.7 per cent, at $30.46 a barrel by 0624 GMT, while US West Texas Intermediate crude futures fell 49 cents, or 2.0 per cent, to $24.25 a barrel.

Both benchmarks have notched up gains over the past two weeks as countries have eased business and social lockdowns imposed to cope with the coronavirus and fuel demand has rebounded modestly. Oil production worldwide is also declining. Click here to read more on the global oil markets .

Asian stocks rise as more economies emerge from lockdown

Japan's Nikkei climbed 1.5 per cent in afternoon trade.

Asian shares followed Wall Street higher on Monday as investors looked ahead to more countries restarting their economies, even as some reported an unwelcome pick-up in new coronavirus cases.

European markets are also heading north, with EUROSTOXX 50 futures and FTSE futures up about 1 per cent. E-Mini futures for the S&P 500 opened softer but bounced as the Asia day wore on and was last up 0.5 per cent.

Encouraging investors in Asia was a further loosening of coronavirus restrictions in the region, with New Zealand easing some curbs from Thursday, while Japan plans to end a state of emergency for areas where infections have stabilised. Click here to read more on the Asian markets .

Nifty call: Sell on rallies with stop-loss at 9,420

A security guard walks past the logo of the National Stock Exchange (NSE) inside its building in Mumbai, India, May 28, 2019. REUTERS/Francis Mascarenhas

The Indian benchmarks -- the Nifty spot and the Sensex spot indices -- witnessed a gap-up open. They rallied during the initial hour, but subsequently began to moderate. Both the indices are now trading higher by about 0.6 per cent. The Nikkei index, one of the major Asian indices, closed today’s session with a gain of one per cent; also, the Hang Seng index is up by 1.4 per cent.  Click here to read in full the Nifty call report .

Sensex, Nifty trim gains

The benchmark indices were firm but off their morning highs in the afternoon session on Monday.

The 30-share benchmark was up 234 points or 0.74 per cent higher at 31,870. The Nifty also trimmed its gains to 71 points or 0.77 per cent at 9,322.

The top gainers on the Sensex were Maruti (up nearly 6 per cent), HeroMoto Corp (5.83 per cent), Bajaj AUto (4.53 per cent), Bharti Airtel (3.11 per cent) and TCS (2.66 per cent).

The laggards were ICICI Bank (down over 3 per cent), HDFC, Hindustan Unilever, Asian Paints and Kotak Bank

Among the BSE sectoral indices, the auto index gained nearly 4 per cent, followed by telecom, IT (up over 2 per cent). The banking index was down nearly 1 per cent and finance was down 0.62 per cent.

Tata Power’s defence business bags Rs 1,200-crore contract to modernise 37 airfields

Tata Power Strategic Engineering Division (Tata Power SED), a division of Tata Power Company, has signed a contract with the Ministry of Defence for modernisation of infrastructure at 37 airfields.

Under the contract, valued at about Rs 1,200 crore, the company will modernise infrastructure at airfields belonging to the Indian Airforce, Indian Navy and Indian Coast Guard. The contract has to be executed over the next four years, the company said in a regulatory filing. Click here to read in full the report on Rs 1,200-cr airfield modernisation contract for Tata Power SED .

IRCTC shares climb 5 per cent as select passenger train services to resume from May 12

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) jumped 5 per cent in early trade on Monday after the Indian Railways said it will gradually resume passenger train services from May 12.

The company’s shares gained 5 per cent to Rs 1,302.85 -- its highest trading permissible limit for the day -- on the BSE. At the National Stock Exchange (NSE), it rose 5 per cent to Rs 1,303.55 -- its upper circuit limit.

Booking for reservation in these trains will start at 4 pm on May 11 and will be available only on the IRCTC website.

The Indian Railways will gradually resume passenger train services from May 12 and will ask passengers to arrive at the station at least an hour before departure, the national transporter said on Sunday.

Initially, all air-conditioned services will begin on 15 Rajdhani routes and the fare would be equivalent to that of the super-fast train, it said.

The special trains will run from New Delhi to Dibrugarh, Agartala, Howrah, Patna, Bilaspur, Ranchi, Bhubaneswar, Secunderabad, Bengaluru, Chennai, Thiruvananthapuram, Madgaon, Mumbai Central, Ahmedabad and Jammu Tawi.

All passenger services were suspended due to a lockdown announced on March 25 and the railways later started the on-demand Shramik Specials to ferry migrants stranded across the country. It, however, has been running freight and parcel services.  - PTI

Rupee slips 16 paise to 75.70 against US dollar in early trade

The rupee slipped 16 paise to 75.70 against the US dollar in opening trade on Monday as rising coronavirus cases in the country weighed on investor sentiment.

Forex traders said rupee was trading in a narrow range as a positive opening in domestic equities supported the local unit, but market participants were concerned about the impact of spiking coronavirus cases on the economy.

The local unit opened at 75.55, then lost further ground and fell to 75.70 against the greenback, down 16 paise over its previous close.

It had settled at 75.54 against the US dollar on Friday. Click here to read in full the rupee report .

Sensex, Nifty trade firm

The Sensex and Nifty rallied 1 per cent in morning trade on Monday.  After opening on a firm note, the market benchmarks maintained a firm undertone. The Sensex was up 314  or 0.99 per cent at 31,957, while the Nifty gained 93 points or 1.01 per cent at 9,345.

The top gainers on the Sensex were HeroMoto Corp, Maruti, Bajaj Auto, UltraTech Cement and Tata Steel. The laggards were ICICI Bank, Hindustan Unilever, SBI, Asian Paints and HDFC.

According to a PTI report, Sensex surged over 500 points in opening session as strong gains in index-heavyweights Reliance Industries, HDFC, Infosys and positive cues from global markets boosted market sentiment.

The report, quoting Jimeet Modi, Founder and CEO, Samco Securities, said in the midst of all the coronavirus-driven chaos, Reliance Industries seems to have created its own bull market territory through a V-Shaped recovery by concerted efforts to bring quality investors, reduce its net debt and streamline its balance sheet.

“RIL having the highest weight in Nifty50 is also keeping markets on a better footing which in a way is helping to neutralise negative sentiments and is good for the current pandemic-stricken economy, he added.

Meanwhile, Nestle India and ICICI Bank were trading in the red.

In the previous session, the BSE barometer settled 199.32 points or 0.63 per cent higher at 31,642.70, while the broader Nifty rose 52.45 points, or 0.57 per cent, to finish at 9,251.50.

Foreign portfolio investors purchased equities worth Rs 1,724.71 crore in the capital market on Friday, provisional exchange data showed.

Besides stock-specific action, foreign fund inflow and firm cues from global markets supported the positive sentiment in the domestic market, traders said.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with gains.

International oil benchmark Brent crude futures were trading 1.16 per cent lower at $30.61 per barrel.

In India, the death toll due to COVID-19 rose to 2,206 and the number of cases climbed to 67,152, according to the health ministry.

Globally, the number of cases linked to the disease has crossed 41 lakh and the death toll has topped 2.82 lakh. (with inputs from PTI)

Daily rupee call: Take a cautious approach to intra-day

The rupee (INR) lost a little over half a per cent last week against the dollar (USD). The domestic currency closed at 75.55 versus the preceding week’s close of 75.1.

Today, the Indian currency has opened at 75.58. A rally from here can be obstructed by the resistance at 75.3, above which the hurdle is at 75.15. But if the local currency slips below 75.6, it can depreciate to 75.8 and then 76. Hence, 75.6 holds the key.

The net flow from Foreign Portfolio Investments (FPI) have turned positive for the month. This is because of a bulk deal in one particular security and so this may not indicate an overall change in the FPI trend. The net inflows for the current month are now at ₹15,940 crore (equity and debt combined). Nevertheless, if more buying follows, it can keep the rupee afloat.

Oil prices drop amid supply glut, fears of 2nd coronavirus wave

Oil prices slid nearly $1 a barrel on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world’s top producers.

Brent crude futures were down 73 cents, or 2.4 per cent, at $30.24 a barrel by 0114 GMT, while US West Texas Intermediate crude futures fell 81 cents, or 3.3 per cent, to $23.93 a barrel.

Both benchmarks have notched gains over the past two weeks as countries have eased business and social lockdowns imposed to cope with the coronavirus and fuel demand has rebounded modestly. Oil production worldwide is also declining. Click here to read in full the global oil report .

Dollar up as focus shifts to economic re-starts from coronavirus lockdowns

The dollar rose on Monday as moves by the United States and other countries to re-open their economies raised hopes for a quicker global recovery from a deep recession triggered by the coronavirus health crisis.

Sterling was little changed against the dollar and the euro after British Prime Minister Boris Johnson outlined plans to slowly ease coronavirus lockdown restrictions.

Data on Friday showed the United States shed a 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression, but traders are starting to look past such grim economic numbers as they bet on future growth. Click here to read in full the global forex report .

Rupee slips 5 paise to 75.59 against US dollar

Ind-Ra remains cautious over the tightening market conditions, which could have an impact on funding sources

The Indian unit slipped 5 paise to 75.59 against the US dollar in early trade on Monday.  - PTI

Asian shares push higher as more countries ease lockdowns

Japan's Nikkei climbed 1.5 per cent in afternoon trade.

Asian shares followed Wall Street higher on Monday as investors looked ahead to more countries restarting their economies, even as some reported an unwelcome pick up in new coronavirus cases.

South Korea warned of a second wave of the new coronavirus as infections rebounded to a one-month high, while new infections accelerated in Germany. Yet millions of French people are set to cautiously emerge from one of Europe's strictest lockdowns on Monday, as countries across Europe ease restrictions.

Investors seemed determined to stay optimistic and MSCI's broadest index of Asia-Pacific shares outside Japan firmed 1.1 per cent. Japan's Nikkei added 1.6 per cent and Chinese blue chips 0.7 per cent. E-Mini futures for the S&P 500 opened soft but bounced as the morning wore on and was last up 0.5 per cent. EUROSTOXX 50 futures gained 0.8 per cent and FTSE futures 0.7 per cent. Click here to read more on the Asian markets .

How to use Commitment of Traders report

With elevated levels of volatility in commodity trading these days, price-based indicators are swinging wildly, posing a challenge to decision-making.

How about an indicator that neglects the price volatility and instead tells us the bigger picture by keeping a tab on fund flows? The Commitment of Traders report, often referred to as COT or COTR, is one such indicator that shows the positioning of market participants in futures and options contract of various asset classes. Click here to read more on how to use Commitment of Traders  report .

Big Story: Has Covid-19 made matters worse for road construction companies?

Road construction companies began 2020 on a high note with booming stock prices, following the announcement of the National Infrastructure Pipeline (NIP). However, most of their gains now have been eroded in the recent market carnage.

The rout in stock prices reflects the bleak prospects of most companies in the sector, which are expected to worsen further due to the Covid-19-induced lockdown. Many experts are now beginning to compare the current slowdown in the construction sector to 2008 and 2013, when many players with weak financials were forced to exit the industry.

How were the road construction companies placed before the Covid-19 pandemic? How does the lockdown impact their business? What are the key parameters that will drive business growth going forward? Read on to find out. Click here to read in full the Big Story on how the impact of Covid-19 on road construction companies .

Opening bell

The benchmark indices, the BSE Sensex and the NSE Nifty, opened the week on a firm note.

The Sensex opened at 32,005, up 363 points or 1.15 per cent, while the Nifty opened at 9,365, up 114 points or 1.24 per cent.

Index Outlook | Sensex, Nifty 50 reverse from key resistance levels

People are being checked before entering the Bombay Stock Exchange for COVID-19 in Mumbai.

The domestic equity indices — the Sensex and the Nifty 50 — began last week on the back foot, taking bearish cues from the global markets, and continued to trend downwards.

Selling pressure and profit-taking at higher levels kept the indices in a narrow band for the rest of the week.

The US markets’ higher close on Friday could trigger a positive start in domestic markets this week . However, the Sensex and the Nifty need to move above the key resistance level of 33,000 and 9,600, respectively, to bring back the bullish momentum. Click here to read in full the Index Outlook .

Weekly trading guide: Infosys stays above key base

SBI (₹166.6)

The stock of SBI, which has been trading in a sideways trend between ₹173.5 and ₹200 for over a month, broke below the lower boundary of the range last week and closed at ₹166.6. On Friday, it registered a fresh one-year low of ₹166.1, which is also the lowest price since February, 2016.

The fresh breakdown has opened the door for further weakness. The fact that the trend prior to the consolidation had been bearish will only make the case stronger for sellers. Last week, the price slipped below the 21-day moving average. The moving average convergence divergence indicator in the daily chart is showing signs of fresh downward momentum and remains in the negative territory.

Also, the daily relative strength index, which was already below the midpoint level of 50, is showing a fresh downtick. Given these bearish indications, traders can short the stock on rallies with a stop-loss at ₹185.

On the downside, the stock might find a base in the form of a support band between ₹150 and ₹156. A break below those levels can drag the stock price to ₹140.

ITC (₹158.2)

Unable to break out of resistance at ₹187, the stock of ITC declined sharply last week, falling below both the 21- and 50-day moving averages. The stock has breached the critical support of ₹175, turning the outlook bearish. The stock registered a five-week low of ₹157.1 on Friday.

Thus, the recovery phase, which had been in place for the past one month, seems to have hit a roadblock, and now the stock might be aligning with the major bear trend. Corroborating the bearish outlook, the daily relative strength index has dipped below the midpoint level of 50 and is exhibiting downward strength.

The moving average convergence divergence indicator in the daily chart, which was hovering in the neutral region, has fallen to the negative territory. Thus, all the factors point to a possible decline from current levels. But the stock has a minor support at ₹155.

So, traders can sell the stock if it breaks below ₹155 and place a stop-loss at ₹166. The immediate support below ₹155 can be spotted at ₹146. Below that level, the stock might test its prior low at ₹134.6.

Infosys (₹674.2)

The stock of Infosys declined last week as it struggled to retain the upward momentum. Notably, it had gained during the preceding two weeks. The price has slipped below the support of ₹700, but remains above the crucial level of ₹650.

Also, it stays above the 21- and 50-day moving averages, which lie at ₹655 and ₹663, respectively. This indicates that the stock still has several supports which can arrest the decline and even help resume its upswing. Substantiating this, the moving average convergence divergence indicator in the daily chart remains in the positive territory. The daily relative strength index, too, lies above the midpoint level of 50.

So, despite moderation in price, a bearish trend-reversal cannot be confirmed yet. One can be bullish until the stock remains above ₹650. Hence, traders can go long on the stock with a stop-loss at ₹630. A resumption in uptrend can lift the stock price beyond ₹700, where it can retest its previous high of ₹720.

The nearest resistance above that level is at ₹760, beyond which the stock can rally towards the resistance at ₹800.

RIL (₹1,561.8)

The stock of Reliance Industries has been one of the standout performers among the major stocks. Retaining its strong bull trend, the stock appreciated last week and is now within a striking distance from its all-time high, which is ₹1,617.5.

Though the stock looked sluggish during the first half of last week, it regained traction and rose sharply towards the end, decisively breaking out of the resistances at ₹1,500 and ₹1,540. Adding to it, the 21-day moving average has crossed over the 50-day moving average. Ending the week at ₹1,561.8, the stock has posted gains for seven weeks in a row, a strong bullish indication.

The daily relative strength index continues to rise in tandem with the stock price. The moving average convergence divergence indicator in the daily chart remains in a strong upward trajectory.

Considering the above factors, traders can initiate fresh long positions on the stock on declines with a stop-loss at ₹1,425. The stock can potentially test its lifetime high of ₹1,617.5. A breakout of that level can lift the stock to ₹1,700.

Tata Steel (₹272.9)

After opening with a gap down, the stock of Tata Steel was moving in a sideways trend throughout the last week. Thus, the stock remains within the broader consolidation range between ₹250 and ₹300. Unless it breaches either of these levels, the next leg of the trend cannot be confirmed.

The 50-day moving average is at ₹305. Thus, the price area between ₹300 and ₹305 can act as a resistance band. As there is a lack of trend, the daily relative strength index remains flat, and lies below the midpoint level of 50.

But the moving average convergence divergence indicator in the daily chart has been in an upward trajectory. However, it shows signs of the bulls losing strength. Until the price oscillates within ₹250 and ₹300, the stock cannot be expected to trend; so, traders can adopt a range-trading strategy till a break occurs.

Above the upper boundary of the range, the resistance levels can be spotted at ₹325 and ₹345, the 38.2 per cent Fibonacci retracement level. The support levels below the lower boundary of the range are at ₹240 and ₹225.

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