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Indian stock markets are expected to see a gap-up opening on Thursday, thanks to positive global cues, new liquidity measures announced by RBI and value buying at lower levels. However, concerns over economic recovery due to the spreading of the Covid-19 pandemic keep investors nervous.
The SGX Nifty at 14,735 (800 am IST) signals at least 50 points gain for Nifty futures, which on Wednesday closed at 14,679. Overnight US stocks ended on a mixed tone, with Dow Jones Industrial Average and S&P 600 gaining but the tech-focused Nasdaq closing in the red. After long holidays, Japanese markets opened on Thursday and is up two per cent. Other stocks in the Asia-Pacific region, such as Korea and Taiwan, are up, while Australia is down marginally.
The RBI on Wednesday announced an on-tap liquidity facility of ₹50,000 crore for supporting healthcare infrastructure and the three-year special long term repo operations of ₹10,000 crore for small finance banks. RBI, which also said that it would continue to purchase government securities, clearly signalled its intent to keep adequate liquidity in the financial system.
"Given the extent of the second wave of the pandemic and the suffering it has caused, the Reserve Bank of India has announced some timely liquidity measures that will provide relief to the most vulnerable by ensuring credit flow to individuals, small businesses and MSMEs as well as giving them greater repayment flexibility/ extending loan tenures," said Shanti Ekambaram, Group President – Consumer Banking, Kotak Mahindra Bank Ltd.
According to analysts, if the pandemic doesn’t subside soon, it opens up downside risks.
S&P Global Ratings on Wednesday slashed India's GDP growth forecast for the current financial year to 9.8 per cent, saying the second Covid wave may derail the nascent recovery in the economy and credit conditions. It in March had an 11 per cent GDP growth forecast for India for the April 2021-March 2022 fiscal on account of a fast economic reopening and fiscal stimulus.
Stocks to Watch
IDBI Bank : The Cabinet Committee on Economic Affairs has given its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd. LIC may reduce its shareholding in IDBI Bank through divesting its stake along with strategic stake sale envisaged by the Government.
Indian Bank : Indian Bank on Wednesday informed the exchanges that it has declared the NPA account of Saravana Stores with an outstanding balance of ₹231 crore as fraud. "We have to inform that non-performing account Saravana Stores (Gold Palace) has been declared as fraud and reported to RBI as per regulatory requirement," Indian Bank said in the notice. Indian Bank has held provision to the tune of ₹115.32 crore against this as of December 31, 2020, it said.
Ceat : The Board of Ceat has approved an additional investment by way of capex of approximately ₹1,205 crore to enhance capacity of Chennai plant in Tamil Nadu. The additional investment will take up to enhance capacity of truck bus radial (TBR) up to 190 tpd capacity over a period of next four years.
Oracle Financial Services Software: The board of Oracle Financial Services Software has approved an Interim Dividend for the financial year 2020-21 of ₹200 a share of face value of ₹5 each. The board has fixed May 18, as the Record Date for the purpose of Interim Dividend. The Dividend will be paid on or before June 3 to elibible shareholders.
Godrej Industries : The Board of Godrej Industries has approved the issuance of up to 7,500 rated, listed, unsecured, redeemable, NCDs having Face Value of ₹10 lakh each, aggregating to ₹750 crore on private placement basis.
Result Calendar
Adani Power, Adani Transmission, Apcotex Industries, Ashika Credit Capital, Blue Star, Bombay Burmah Trading Corporation, Caplin Point Laboratories, Century Textiles & Industries, Coforge, CreditAccess Grameen, Five X Tradecom, Foseco India, Hero MotoCorp, Hikal, Hindoostan Mills, ICRA, IIFL Finance, Jost's Engineering, Ludlow Jute & Specialities, Procter & Gamble Health, Praj Industries, Raymond, Solara Active Pharma Sciences, Sundram Fasteners and Tata Consumer Products will announce their quarterly earnings on Thursday.
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