Stimulus boost to propel the market

Defying weak global cues, Indian markets are set for a blistering opening as SGX Nifty indicates Nifty to open at 9,439, up by 2.87 per cent. The key catalyst for the domestic markets on May 13 would be the stimulus plan of Rs 20 trillion announced by Prime Minister Narendra Modi to revive Indian economy. The specifics are yet to be known but the markets are full of enthusiasm as this relief package is one of the largest in the world. But, with the announcement of Rs 20 trillion stimulus package again raises concerns over the fiscal deficit and it is not clear if the 50 per cent jump in borrowing limits factors the additional stimulus for this year. The level of 9,450-9,510 is a key resistance for Nifty as we have to see whether this resistance gets cleared or not by the steroid of stimulus.

On the earnings front, Maruti Suzuki, Kotak Mahindra Bank, Escorts and Siemens are some of the key corporates slated to report their March quarter earnings today.

Asian markets were trading on a soft note on Wednesday, following a sharp sell-off on Wall Street on Tuesday as Dr Anthony Fauci warns strongly against an overly aggressive reopening plan and said that it could lead to needless suffering and death. Japan’s Nikkei 225 slipped 0.74 per cent, China’s Shanghai Composite was down by 0.25 per cent and Hong Kong’s Hang Seng has slid 0.18 per cent.  

Back home, after a disastrous performance, in the first half of the trading session, the key benchmark indices staged a smart recovery in the second half of the trading session and as a result, indices closed off the day’s low. At the close, Nifty settled at 9,197, down by 0.46 per cent and BSE Sensex lost 0.60 to settle at 31,371. In the broader market, both Nifty Mid-cap and Small-cap dropped 0.72 and 0.67 per cent, respectively. On the sectoral front, Nifty Media, Nifty Metal and Nifty Realty were the top gainers while, on the flipside; Nifty Private Bank and Nifty Pharma were the top losers.

On Tuesday, US stocks sold off aggressively in the second half of the trading session after Dr Anthony Fauci warned Senate Committee on Health about the lingering threat of a second wave of Coronavirus. At close, Dow fell by 1.9 per cent, the tech-heavy Nasdaq plunged 2.1 per cent and S&P 500 slumped 2.1 per cent. European indices ended Tuesday’s session on a mixed note.