Looming coronavirus fears pushed
Indian equity markets deeper into red on Friday. Indices made a weak start,
impacted by the Association of Indian Forging Industry's statement that disruption
in supplies due to the coronavirus outbreak in China has hit domestic forging
industry along with automobile and auto component manufacturing sectors.
Sentiments remained down, amid a private report that coronavirus outbreak could
cause a dent to the recovery of the Indian economy amid supply chain
disruptions and inflationary pressures. The report also said that manufacturing
companies could face production disruptions if the length of the outbreak gets
prolonged and their supply chain is not restored to normalcy. Markets continued
to hit with huge losses during the whole trading day, as Industry body PHDCCI
said that the coronavirus outbreak may negatively impact global growth by 30
basis points or $250 billion. It said disruptions in the global supply chains
will not only hit China's exports but also the exports of the importing
countries as they import a large chunk of raw materials and intermediate goods
from China while exporting to other respective destinations. The street
remained cautious, even after Union Finance Minister Nirmala Sitharaman
asserted that the anti-CAA protests and the recent violence in Delhi have not
dampened the spirit of investors. Finally, the BSE Sensex slipped 1448.37
points or 3.64% to 38,297.29, while the CNX Nifty was down by 431.55 points or
3.71% to 11,201.75.
The US markets ended mostly lower
on Friday, though Nasdaq settled the day nearly unchanged, amid intensifying
fears over the potential degree of damage the spread of COVID-19 will inflict
on the global economy and supply chains. New Zealand and Nigeria are among the
countries that have recently confirmed their first coronavirus cases, with the
World Health Organization warning that the fast-spreading disease could soon
reach most, if not all countries around the world. WHO director-general Tedros
Adhanom Ghebreyesus recently said the organization has raised its assessment of
the risk of spread and the risk of impact of the coronavirus to very high. In
addition to the confirmed cases in new countries, the number of cases in
countries like China, South Korea and Iran countries to rise. However, markets
trimmed most of their losses after Federal Reserve Chairman Jerome Powell said
the central bank will act as appropriate to support the economy amid the evolving
risks posed by the coronavirus outbreak. On the economic data front, the
government said consumer spending increased a mild 0.2% last month. Meanwhile,
incomes shot up 0.6% - the biggest gain in 11 months - but the increase
included annual cost-of-living increases in Social Security benefits as well as
tax credits tied to the Affordable Care Act. Separately, a measure of business
conditions in the Chicago region improved in February but remained in
contraction territory. MNI Indicators said the Chicago PMI business barometer
increased to 49.0 in February from 42.9 in January. Any reading below 50
indicates worsening conditions.
Extending their recent losses,
crude oil futures closed sharply lower on Friday as growing concerns about
energy demand due to the impact of the fast-spreading coronavirus on the global
economy weighed on the commodity once again. Besides, the Organization of the
Petroleum Exporting Countries (OPEC) and allies are scheduled to meet next
week, March 5-6, to consider deepening production cuts to support prices.
Currently, the group is producing 1.7 million barrels less per day. According
to the Production Supply Monthly report from the US Energy Information
Administration, US oil output fell to 12.78 million barrels per day in December
from 12.86 million barrels per day a month earlier. But then, weekly oil
reports from EIA since January this year, have showed a jump in crude
production in the US, with output rising to a record 13 million barrels per
day. Crude oil futures for April slipped $2.33 or about 5 percent to settle at
$44.76 a barrel on the New York Mercantile Exchange. April Brent crude dropped
$1.66 or 3.2 percent to settle at $50.75 a barrel on London's Intercontinental
Exchange.
Indian
rupee fell sharply against US dollar on Friday, amid sustained foreign fund
outflows. Markets' sentiment also took a hit as Industry body PHDCCI said that
the coronavirus outbreak may negatively impact global growth by 30 basis points
or $250 billion. Investors also remained on sidelines ahead of the release the
Gross Domestic Product (GDP) figures for the October-December period to be
released later in the day. Subdued equity market too put pressure on the
domestic unit. Easing crude oil prices and weakening of the American currency
in the overseas market failed to cast any impact on the rupee. On the global
front, dollar nursed losses on Friday after its worst day against the euro in
nearly two years, as the global spread of the coronavirus fired up expectations
for a U.S. rate cut and pushed the hunt for yield elsewhere. The last traded
price of rupee was 72.20, 59 paise weaker from its previous close of 71.61 on
Thursday.
The FIIs as per Friday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 6276.36 crore against gross selling of Rs 9341.21 crore, while
in the debt segment, the gross purchase was of Rs 1267.77 crore with gross
sales of Rs 3207.61 crore. Besides, in the hybrid segment, the gross buying was
of Rs 6.90 crore against gross selling of Rs 6.19 crore.
The US markets ended mostly in
red on Friday as fears escalated over the fast-spreading coronavirus. Asian
markets are trading mostly higher in early deals on Monday as markets are
recovering after the novel coronavirus outbreak sent stocks into a downward
spiral last week. India markets crashed, for sixth straight session, on Friday,
tracking global markets meltdown as economies worldwide struggle in battling
the Coronavirus pandemic. Today, the start of new month is likely to be
optimistic tracking positive cues from Asian peers and ahead of India
Manufacturing PMI numbers for February slated to be released later in the day.
Traders will be getting some encouragement as the government collected Rs 1.05
lakh crore as Goods and Services Tax (GST) revenue in February, up 8% over the
same month last year. Some support also came in with report that the output of
eight core sectors of the economy managed to rise for a second straight month
in January, growing by 2.2% as key sectors like refinery products and
electricity continued to see slow growth. Also, the Reserve Bank of India's
(RBI) data showed that India's foreign exchange reserves inched up by $29
million to a fresh lifetime high of $476.122 billion in the week to February
21, aided by an increase in the value of gold holdings. Market participants may
take note of industry body Assocham's statement that with the Chinese economy
getting impacted due to the coronavirus outbreak, India can push its exports in
the global markets to fill up the space vacated by the neighbouring country.
Though, some cautiousness may crept in as Q3 GDP growth slowed a 7-year low of
4.7% on the back of a continued slump in manufacturing and escalating
coronavirus fears. The GDP growth for the December quarter is the lowest since
January-March of 2012-13 when it stood at 4.3%. Also, the Controller General of
Accounts (CGA) said India's fiscal deficit touched 128.5% of the whole year
budget target at January-end. Traders may also be concerned with report that
overseas investors invested only Rs 6,554 crore in Indian markets on net basis
in February, as they adopted a cautious stance amid coronavirus scare, subdued
economic data and disappointing corporate earnings. There will be some buzz in
the banking stocks with report that in a bid to address weaknesses in
cooperative banking sector, the Parliament is likely to clear a Bill to amend
Banking Regulation Act to bring multi-state cooperative banks under effective
regulation of RBI during the Budget session. Steel stocks will be in focus as
the World Steel Association (worldsteel) in its latest report stated that
India's crude steel production registered a decline of 3.26 per cent to 9.288
million tonnes (MT) in January this year. The auto sector stocks will also be
in action, reacting to their monthly sales numbers. Besides, SBI Cards and
Payment Services' initial public offer (IPO) will hit the primary market with a
Rs 10,350 crore initial public offering today.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,201.75
|
11,122.93
|
11,332.68
|
BSE Sensex
|
38,297.29
|
37,982.35
|
38,849.85
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,417.20
|
34.60
|
33.98
|
35.53
|
Tata Motors
|
944.70
|
128.95
|
124.13
|
136.68
|
SBI
|
597.05
|
303.00
|
297.85
|
311.40
|
Vedanta
|
573.63
|
114.00
|
108.73
|
122.63
|
ICICI Bank
|
327.38
|
497.25
|
490.68
|
505.33
|
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