Plus   Neg

Sensex, Nifty Seen Flat After Recent Rally

Indian shares are seen opening on a flat note Tuesday after four days of gains. Underlying sentiment may remain cautious after global credit ratings agency Moody's Investors Services downgraded India's credit rating to a notch above junk, saying the coronavirus pandemic had amplified vulnerabilities in the country's credit profile that were present and building prior to the shock.

Concerns about rising coronavirus cases in the country and the ongoing standoff between the Indian Army and China's People Liberation Army at several locations in eastern Ladakh may also weigh on sentiment.

The United States House Committee on Foreign Affairs expressed concerns at Chinese aggression, calling on Beijing to resolve its dispute with India using 'diplomacy and existing mechanisms'.

Russia also expressed anxiety at the current military stand-off between India and China, and said that it was confident that both countries would find their "way out" through established diplomatic mechanisms and tools.

With 1.90 lakh cases, India is now the seventh worst-hit country from coronavirus, surpassing France and Germany.

Meanwhile, in a bid to boost the MSME sector, the Cabinet Committee on Monday approved Rs 20,000 crore subordinate debt for the sector. This will benefit 2 lakh stressed MSMEs.

Benchmark indexes Sensex and the Nifty jumped 2.7 percent and 2.6 percent, respectively on Monday as enthusiasm over easing of curbs after a more than two-month lockdown helped investors shrug off weak GDP data. The rupee rose by 8 paise to close at 75.54 against the U.S. dollar.

Asian stocks are moving higher this morning, though overall gains remain limited after reports that China has stopped purchases of some American farm goods amid tensions over Hong Kong.

The dollar weakened after U.S. President Donald Trump threatened to deploy the military to quell civil unrest. Oil prices held steady ahead of an OPEC+ meeting on extending output cuts.

U.S. stocks rose overnight as optimism around economic reopenings offset nationwide protests against police brutality as well as rising U.S.-China tensions. In economic news, a report showed U.S. manufacturing activity contracted at a slower rate in the month of May.

The Dow Jones Industrial Average gained 0.4 percent, while the tech-heavy Nasdaq Composite added 0.7 percent and the S&P 500 rose 0.4 percent to reach their best closing levels in three months.

European markets rallied on Monday as U.S. President Trump's comments didn't contain any threat of tariff hikes on China and a private survey showed the Chinese economy returned to expansion in May.

The pan European Stoxx 600 climbed 1.1 percent. France's CAC 40 index surged 1.4 percent and the U.K.'s FTSE 100 advanced 1.5 percent, while markets in Germany and Switzerland were closed for Whit Monday holiday.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT