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NSE Intra-day chart (11 March 2020)
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Market Commentary 12 March 2020
Markets to get gap-down opening amid global sell-off

 

Indian equity bourses ended slightly higher in highly volatile session on Wednesday. After a weak start, indices altered between green & red terrain, as Moody's Investors Service cut its growth forecast for India to 5.3% for 2020 from 5.4% estimated earlier, as it expects the coronavirus outbreak to dampen domestic demand globally. In noon deals, markets added gains and remained higher till the end of the session, aided with the Reserve Bank of India's (RBI) statement that it has received Rs 48,856 crore of bids in the fourth long-term reverse repo operation (LTROs) conducted for an amount of Rs 25,000 crore with a 3-year tenor. But, in dying hours of trade, most of gains got trimmed, after Commerce and Industry Minister Piyush Goyal said that the shutdown of factories in China due to the coronavirus outbreak may affect Indian industries like pharmaceutical, electronics and automobile which import components and raw materials from the neighbouring country. Besides, the UN's trade and development agency said that the coronavirus outbreak could cost the global economy up to $2 trillion this year, warning that shock from the epidemic will cause a recession in some countries and depress global annual growth to below 2.5 percent. Finally, the BSE Sensex rose 62.45 points or 0.18% to 35,697.40, while the CNX Nifty was up by 6.95 points or 0.07% to 10,458.40.

 

The US markets ended lower on Wednesday as traders cashed in on yesterday's gains amid lingering concerns about the economic impact of the coronavirus outbreak. Total confirmed coronavirus cases have climbed to nearly 122,000 worldwide, according to data compiled by Johns Hopkins University, while the total number of deaths is closing in on 4,400. Johns Hopkins also said the number of confirmed cases in the US has jumped to more than 1,100 from just over 100 a week ago. German Chancellor Angela Merkel has warned that up to 70 percent of the German population could become infected with the coronavirus.  Stocks saw further downside after the World Health Organization (WHO) officially declared the coronavirus outbreak a global pandemic, citing the disease's rapid spread outside of China. On the economic data, a report released by the Labor Department showed a modest increase in US consumer prices in the month of February. The Labor Department said its consumer price index inched up by 0.1 percent in February, matching the uptick seen in January. Consumer prices edged higher as higher prices for food and shelter more than offset a steep drop in energy prices. The report said food prices climbed by 0.4 percent in February after edging up by 0.2 percent in January, with prices for food at home showing the largest monthly increase since May of 2014. Meanwhile, energy prices plunged by 2.0 percent in February after falling by 0.7 percent in January, as all of the major energy component indexes declined. 

 

Crude oil futures ended deeply in red on Wednesday, as US crude supplies rose a 7th straight week.  Data from the Energy Information Administration (EIA) revealed that US crude supplies rose by 7.7 million barrels for the week ended March 6. The EIA data also showed supply declines of 5 million barrels for gasoline and 6.4 million barrels for distillates. The American Petroleum Institute on Tuesday reported a climb of 6.4 million barrels. Meanwhile, Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries, unveiled plans to boost oil-production capacity to a record 13 million barrels a day. Crude oil futures for April dropped $1.38 or about 4 percent to settle at $32.98 a barrel on the New York Mercantile Exchange. May Brent crude fell $1.43 or 3.8 percent to settle at $35.79 a barrel on London's Intercontinental Exchange.

 

Reversing its two-session fall, Indian rupee bounced back sharply against the US currency on Wednesday, on persistent selling of the American currency by exporters. Sentiments turned optimistic with PHD Chamber of Commerce and Industry President D K Aggarwal's statement that the volatility in the rupee and stock markets is short-lived and primarily driven by the spread of Coronavirus disease (COVID) in many countries. He also said that the markets are expected to stabilise, as the fundamentals of the Indian economy are strong enough to withstand the external shocks on the back of robust economic reforms undertaken by the government during the last many years. Dollar losing sheen against some other currencies overseas also supported the forex sentiment. On the global front, U.S. dollar resumed its descent against the Japanese yen on Wednesday as fears over the spreading coronavirus pushed investors into safe havens, while the British pound recovered after Bank of England unexpectedly cut interest rates. The last traded price of rupee was 73.62, 55 paise stronger from its previous close of 74.17 on Monday.

 

The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 6045.05 crore against gross selling of Rs 13057.32 crore, while in the debt segment, the gross purchase was of Rs 2131.88 crore with gross sales of Rs 1212.92 crore. Besides, in the hybrid segment, the gross buying was of Rs 32.13 crore against gross selling of Rs 34.05 crore.

 

The US markets ended lower on Wednesday after the World Health Organization declared the new coronavirus a pandemic. Asian markets are trading deeply in red on Thursday following overnight fall on Wall Street. Indian markets ended marginally in green on Wednesday in choppy trading session as risk sentiment remained subdued amid rising coronavirus cases in the country. Today, the start of session is likely to be gap-down amid sell-off in the global markets as virus fears intensify. As per a private report, two cases of novel Coronavirus, or Covid-19, were confirmed in Mumbai on March 11, marking the first cases for the metropolitan city. Besides, investors will be eyeing macro-economic data of January's industrial and manufacturing production data and retail inflation for February slated to be released later in the day. Though, some respite may come later in the day with Chief Economic Adviser Krishnamurthy Subramanian's statement that the virus epidemic will not have much impact on the next fiscal's economic growth. Some support may also come with a private report that falling crude oil prices will help reduce current account deficit by 25 basis points to 0.7% of the GDP in FY2021. Besides, the Reserve Bank of India's (RBI) data showed that the central bank continued to be a net purchaser of the US dollar after it bought $10.27 billion in January on a net basis from the spot market. Meanwhile, the GST Council is likely to rationalise tax rates on five sectors, including mobile phones, footwear and textiles, and defer implementation of the new return filing system and e-invoicing in its meeting on March 14. There will be some buzz in the banking stocks as Finance Minister Nirmala Sitharaman will hold meeting with chief executives of amalgamating banks on Thursday to review preparedness for the merger beginning April 1. Auto stocks will be in focus as industry body Society of Indian Automobile Manufacturers (SIAM) warned that disruption in raw material supply due to coronavirus outbreak could critically affect production across all segments. There will be some reaction in jewellery stocks with the Gem and Jewellery Export Promotion Council's (GJEPC) report that India's gems and jewellery exports declined by 20.26% to Rs 20,763.28 crore in February, hit by the global outbreak of Covid-19, credit crunch and customs issues. 

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

10,458.40

10,346.57

10,557.67

BSE Sensex

35,697.40

35,299.04

36,058.63

                                                 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

4,136.77

28.80

24.90

31.15

Tata Motors

1,111.49

98.90

95.63

104.33

State Bank of India

908.47

245.10

239.30

254.70

Oil & Natural Gas Corporation

635.70

71.70

69.37

75.72

GAIL (India)

494.64

90.50

87.82

95.37

 

  • M&M has launched its locally assembled Scorpio pick-up vehicle in Kenya through a partnership with Simba Corporation. 
  • Infosys has joined the Qualcomm Smart Cities Accelerator Program to offer end-to-end solutions for smart stadiums, smart venues and smart event management. 
  • JSW Steel has reported crude steel production of 13.20 lakh tonnes for February 2020, registering rise of 5% over 12.57 lakh tonnes in February 2019.  
  • Bajaj Auto has launched Dominar 250, a variant of the Dominar Sports Tourer model, priced at Rs 1.6 lakh.
News Analysis