Share markets in India are presently trading on a strong note, in line with global peers that rallied as optimism over the reopening of economies buoyed investor sentiment.

The BSE Sensex is presently trading up by 548 points, while the NSE Nifty is trading up by 156 points.

The BSE Mid Cap index is trading up by 0.9%, while the BSE Small Cap index is trading up by 1.3%.

Sectoral indices are trading mixed with stocks in the capital goods sector and banking sector witnessing buying interest, while IT stocks are witnessing selling pressure.

The rupee is trading at 75.71 against the US$.

Gold prices are currently trading down by 0.1% at Rs 46,540.

Market participants are tracking Ceat share price, Lupin share price, and TVS Motor Company share price as these companies are scheduled to announce their March quarter results (Q4FY20) later today.

You can read our recently released Q4FY20 results of other companies here: Lakshmi Machine, Birla Corporation, Bata India, Colgate, Honeywell Automation, Hawkins Cookers, Bayer Cropscience, JSW Steel, DCB Bank.

In news from the automobile sector, Eicher Motors' share price is in focus today.

Shares of the company are trading higher for the third straight day today after the company announced a stock split plan to make the stock more affordable for small retail investors and increase liquidity.

In an exchange filing on Monday, the company said: "the board of directors of the company is scheduled to meet on June 12, 2020, to consider and approve sub-division/split of the equity shares of the face value of Rs 10 each of the Company in such manner as may be determined by the board."

The board will also consider and approve audited standalone and consolidated financial statements for the four-quarter and financial year ended March 31, 2020.

Shares of Eicher Motors are presently trading up by 4%.

Moving on to news from the economic space, S&P Global Ratings has forecasted the Indian economy to contract 5% in the current fiscal as the lockdown imposed to contain Covid-19 pandemic has curtailed economic activity severely.

In a statement, S&P said, "the Covid-19 outbreak in India and two months of lockdown - longer in some areas - have led to a sudden stop in the economy. That means growth will contract sharply this fiscal year. Economic activity will face ongoing disruption over the next year as the country transitions to a post-COVID-19 world."

The rating agency said India has limited room to maneuver on policy support. The Reserve Bank of India (RBI) cut policy rates by 40 basis points in May, meaning the repo rate is 115 basis points lower since February.

It further added that despite the cuts, India banks have been unwilling to extend credit. Small and mid-size enterprises continue to face restricted access to credit markets despite some policy measures aimed at easing financing for the sector.

S&P said the government's stimulus package, with a headline amount of 10% of GDP, has about 1.2% of direct stimulus measures, which is low relative to countries with similar economic impacts from the pandemic.

The remaining 8.8% of the package includes liquidity support measures and credit guarantees that will not directly support growth.

Earlier this week, rating agencies Fitch and CRISIL too had projected a 5% contraction for the Indian economy.

Note that the Indian economy was grappling with its own issues and COVID-19 has made matters worse.

The industry was facing demand problems, due to which business houses were reluctant to undertake CAPEX plans. Unemployment was at its peak and exports were consistently down for several months.

India's GDP growth has been on a consistent decline after peaking out at 7.9% in Q4 of FY18 to 4.7% in Q3 of FY20. This is evident in the chart below:

The numbers are expected to have fallen further in Q4FY20 due to COVID 19.

Interestingly, there's a silver lining in all this. India can become an outsourcing hub. The global slowdown will mean that countries like the US, will be looking out for low-cost outsourcing destinations like India.

Further, a lot of global buyers have already shifted to India to source ceramics, home appliances, fashion, and lifestyle goods.

Meanwhile, as per the reports, around a thousand foreign manufacturers want to relocate their production to India, a country they see as an alternative to China.