Market Ahead, June 25: Top factors that could guide markets today

The Indian markets are likely to open gap-down today after a steep fall in the US markets overnight. At 7:25 AM, the SGX Nifty was trading at 10,205, over 100 points down from yesterday's close of Nifty futures. Meanwhile, the International Monetary Fund's downgrade to global economic projections will remain a key risk for the markets today while volatility is also expected to remain high today since it being the scheduled expiry of June series derivative contracts.

The IMF has warned that the Indian economy faces an even deeper downturn than what it had projected in April. It has projected a sharp contraction of 4.5 per cent in FY21, a steep drop from its April forecast of a 1.9 per cent expansion, calling it a "historic low" for India. In terms of global outlook, the IMF said it now expects a deeper recession and has projected global output to shrink 4.9 per cent this year, much sharper than the 3 per cent contraction predicted in April.

Such a projection and surging US coronavirus cases sent the Wall Street’s three major indexes spiraling to their biggest daily percentage drop in almost two weeks. The Dow Jones fell 2.72 per cent, the S&P 500 lost 2.59 per cent and the Nasdaq Composite dropped 2.19 per cent. Asian markets followed the tumble although the losses were less servre. Australian S&P/ASX 200 lost 1 per cent in early trading while Japan’s Nikkei fell 0.74 per cent.

In commodities, oil prices tumbled as much as 5 per cent overnight. Brent crude was last up 0.8 per cent at $40.63.

Meanwhile, India Ratings is also painting a grim picture for India. It expects India’s real GDP to contract 5.3 per cent in FY21 while nominal GDP is expected to contract 3.4 per cent for the year and gross value added to contract by 5.5 per cent.

On the Covid-19 front, India's total cases rose to 4.72 lakh after yet another sharp daily spike, according to Worldometer. Around 14,907 people have died in the country from Covid-19 so far. Meanwhile, West Bengal yesterday announced the extension of the lockdown till July 31 with continuance of the existing relaxations

Now, a quick look at the corporate results announced post market hours yesterday

GAIL India yesterday posted 62 per cent increase in its consolidated profit before tax in Q4 to Rs 3,598.7 crore owing to the adoption of a lower tax regime. 

Indian Oil Corporation posted a consolidated net loss of Rs 7,783 crore for the quarter on a one-time loss of Rs 11,305 crore.

And, Canara Bank reported widening of its standalone net loss to Rs 3,259 crore for the quarter during which it made a huge provisioning of Rs 5,375.38 crore for the March quarter.

A total of 147 companies, including Apollo Hospitals, Ashok Leyland, and Bank of India are scheduled to announce their quarterly results today.

And, now, let's go through the other top news of the day.

Sources have told Business Standard that the government is set to release the second draft of the proposed e-commerce policy soon, which would focus on domestic traders and have more scrutiny on predatory pricing.

The government yesterday announced that it has decided to bring co-operative banks under the RBI's governance. Once the ordinance is approved by the President, the RBI will get more auditory and managerial powers over 1,482 urban co-operative banks and 58 multi-state co-operative banks.

The Sebi on Wednesday put curbs on algorithmic trading. The regulator has directed stock exchanges to introduce tighter rules to bring down the so-called order-to-trade ratio.

The RBI yesterday said digital lending platforms must disclose to the customers which bank or NBFC these platforms are working for so that customers availing so called ‘hassle free’ loans are not harassed later.

And, in the end, some news on the personal finance front. The government has extended the deadline for filing income-tax returns to November 30 in view of prolonged disruption caused by the Covid-19 pandemic.

Read by Chirinjibi Thapa