Markets to open flat; Moody’s downgrades India's rating

The downgrade of India by global rating agency Moody’s Investors Service may put a brake to the current rally.

Jun 02, 2020 08:06 IST India Infoline News Service

Stock Market Chart
Indian markets are likely to open on a flat to soft note as the mood of the market would be sour on the rating given by the global rating agency Moodys Investors Service. The agency downgraded India’s rating to Baa3 from Baa2 and changed its outlook to negative from stable.

On the other hand, the government continues to combat the situation arising out of pandemic as they announced a host of measures for micro, small and medium enterprises (MSMEs) as well as street vendors.

Further, Union Cabinet also announced an increase in minimum support price (MSP) of 14 Kharif crops and this may provide a support to the stock markets after the initial bump, which could be seen on the back of the downgrade by Moody’s. At 7:57 am, SGX Nifty was trading at 9,805.50, down by 28.50 points.

On the earnings front, key stocks which are scheduled to announce their earnings today for the quarter ended March 2020 include Britannia, Indigo and Motherson Sumi Systems.

Asian stock markets were seen buoyant on Tuesday amid positive cues from overnight on Wall Street. Japan’s Nikkei 225 has climbed over 1% as they have further lifted the restrictions on social and economic activities in urban areas. Meanwhile Hong Kong’s Hang Seng has gained 0.5% and China’s Shanghai Composite is trading almost unchanged.
Asian Markets
Asia Opening Price Change % Change
Nikkei 225 22,295.91 233.52 1.06
Hang Seng 23,844.36 111.84 0.74
Shanghai 2,916 0.57 0.02
SGX Nifty 9,805.50 -28.5 -0.29

What a fine way to start the new month! Indian equity market jumped sharply on Monday to register gains of over 2.5% and extended their gains for the fourth straight session. Sensex climbed 2.71% to end above 33,300 mark and Nifty surged 2.57% to settle above 9,800 mark.

Positive cues from the global markets and the news of timely arrival of monsoon aided the surge. The broader markets registered gains of over 3% and thereby, outperformed the frontline gauges. The buying momentum was so strong that all the sectoral indices ended in the green, wherein, Nifty PSU Bank led the rally, followed by Nifty Metal and Nifty Financial Services.

In overnight developments, US stocks rose on the back of US manufacturing activity rising from an 11-year low in May, indicating stabilization, following a pandemic-driven dive. However, the escalating social tensions across the country on the heels of the death of George Floyd kept a lid on the enthusiasm. 

The tech-heavy Nasdaq composite outperformed as it gained nearly 0.66%, followed by S&P 500 and Dow, which rose 0.38 and 0.36%, respectively. European indices too inched higher on Monday after manufacturing output recovered in the month of May.
US Markets
US Closed Price Change %Change
Dow 25,475.02 91.91 0.36
S&P 500 3,055.73 11.42 0.38
Nasdaq 9,552.05 62.18 0.66
GlobalDow 2,776.73 3.44 0.12
Europe Markets
Europe Closed Price Change %Change
FTSE 100 6,166.42 89.82 1.48
CAC 40 4,762.78 67.34 1.43
FTSE MIB 18,523.71 326.15 1.79
IBEX 35 7,221.40 124.9 1.76
Stoxx 600 354.2 3.84 1.1
Commodity Price Change % Change
Gold 1,750.20 -0.1 -0.01
Oil 35.57 0.13 0.37

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