The benchmark Sensex and Nifty indices are likely to open on a flat-to-positive note on May 7 as trends in the GIFT Nifty indicate a muted start for the broader index with a gain of 10 points.
Equity markets on Monday ended flat after opening nearly 0.5 percent higher amid selling seen in PSU stocks. The Sensex was up 17.39 points or 0.02 percent to close at 73,895.54, and the Nifty was down 33.15 points or 0.15 percent to end at 22,442.70. About 1,294 shares advanced, while 2,627 shares declined, and 172 shares were unchanged.
Among gainers, Kotak Mahindra Bank was the top gainer, up over five percent followed by Tata Consultancy Services and Hindustan Unilever which gained 2.1 percent and 1.8 percent, respectively. Among losers, Titan Co Ltd fell over 7.2 percent, its sharpest decline in 22 months after weak Q4 earnings. SBI lost 2.9 percent while NTPC lost 2.31 percent.
Among sectoral indices, the Nifty Realty index jumped 2.76 percent. Among losers, the Nifty PSU Bank index dropped 3.66 percent, with consumer durables, oil & gas losing 2.55 percent and 1.75 percent, respectively.
Stay tuned to GrowMudra to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms, which could impact Indian as well as international markets.
Gift Nifty
Trends in the GIFT Nifty indicate a flat start for the broader index in India, with a gain of 10 points or 0.04 percent. The Nifty futures were trading around the 22,590 level.
US markets
Stocks surged in their best three-day rally since November, driven by speculation of potential interest rate cuts by the Federal Reserve this year. The S&P 500 climbed 1%, surpassing its 50-day average price—a crucial level for many chartists. Solid earnings fueled optimism despite concerns about trading volume, with most industries gaining. Traders monitored geopolitical tensions, including Israel's rejection of a cease-fire proposal by Hamas. Oil prices rose. Investors analyzed remarks from various Fed officials following Jerome Powell's recent comments. Fed Bank of Richmond President Thomas Barkin anticipates high rates to slow the economy and cool inflation, while his New York counterpart, John Williams, suggests eventual rate cuts depending on data trends.
Asian markets
Asian stocks surged early, buoyed by Wall Street's optimism that the Federal Reserve will initiate interest rate cuts this year. Japan's Nikkei 225 soared up to 1.6%, resuming trading after a holiday, while Australian shares rose 0.7%. The yen weakened after Japan's top currency official suggested no government intervention unless market functioning is disrupted. In China, optimism prevails with supportive policies boosting shares and the yuan. Rebounding assets attract investors amid earnings recovery, policy backing, and attractive valuations. Australia's central bank is anticipated to maintain its key interest rate while acknowledging persistent consumer prices.
Crude
Oil climbed 0.5% in early Asian trading, while US stock futures held steady despite Israel rejecting Hamas's ceasefire proposal in Gaza. The US equity benchmark surpassed 5,180 on Monday.
General Elections
After intense campaigning, the third phase of the Lok Sabha elections is set to cover 93 seats across 11 states and Union Territories. This phase marks the halfway point of the general election, with over 280 constituencies having already voted. The BJP-led NDA and opposition bloc INDIA clashed over issues like reservation and sexual abuse allegations against suspended JD(S) leader Prajwal Revanna. The third phase is crucial for the BJP, especially in Gujarat where it aims to win all seats. Around 1,300 candidates, including approximately 120 women, are contesting, including notable figures like Union ministers Amit Shah, Jyotiraditya Scindia, and Mansukh Mandaviya.
FII and DII
FIIs sold shares worth Rs 2,168.75 crore. DIIs pumped in Rs 781.39 crore worth of stocks on May 6.
Q4 earnings today
Dr Reddy's Labs, PB Fintech, JSW Energy, Voltas, Delta Corp, Graphite India, Indraprastha Gas, IRB Infrastructure, Jindal Saw, KEC International, Max Financial.
Stocks under NSE F&O ban
SAIL, Aditya Birla Fashion & Retail, Balrampur Chini Mills, Biocon, GMR Airports Infrastructure, Vodafone Idea.
IIFL Finance Faces Liquidity Crunch Amid Bank Caution on Lending
IIFL Finance is experiencing a liquidity crunch as banks become cautious about lending to non-bank lenders following restrictions on its gold loan business, according to a Reuters report. Banks are refraining from sanctioning new lines of credit or disbursing from existing limits. The impact of these restrictions on the overall business is estimated to be around Rs 500 crore ($60 million). Despite this, IIFL Finance has yet to respond to a Reuters' request for comment. In early March, the Reserve Bank of India (RBI) instructed IIFL Finance to halt sanctioning, disbursing, and selling gold loans due to "material supervisory concerns" in its gold loan portfolio.
PSU Bank Shares Plunge on RBI's Proposed Tighter Norms for Lending
The Reserve Bank of India (RBI) released a draft proposing stricter lending norms and increased monitoring for under-construction infrastructure projects on May 6. Public-sector banks bore the brunt of the impact, as the proposal mandates higher provisions and stricter monitoring for such projects. The RBI emphasized that the proposal is based on banks' experiences with project loans. While India is witnessing a surge in infrastructure and manufacturing projects, past defaults on infrastructure loans have strained the banking sector. The proposed guidelines aim to prevent such occurrences amid the current focus on infrastructure spending.
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