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NSE Intra-day chart (12 March 2020)
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Market Commentary 13 March 2020
Benchmarks to open deeply in red amid a rout on global markets


Indian equity benchmarks witnessed bloodbath on Thursday as coronavirus woes deteriorated sentiments after the World Health Organization (WHO) declared coronavirus as a global pandemic. After a lackluster opening of the day, key indices remained under pressure, on the back of Department-Related Parliamentary Standing Committee on Commerce's statement that the FDI equity inflow in manufacturing is declining and the sector's share in the total FDI inflow in 2018-19 was around 23% which is very low. It said the low inflow of FDI in the manufacturing sector defeats the very purpose of Make in India scheme. Bears held their tight grip over the Dalal Street throughout the trading session, tracking negative global markets. Markets participants remained pessimistic, amid a private report stating that only 15% of business executives worldwide have confidence in their company's own top leadership to successfully manage disruption - including unexpected events like pandemics, technological advances, shifting demographics and climate change. This lack of confidence is striking since 95% of executives also believe that managing disruption well is now critical for companies to succeed in turbulent times. Finally, the BSE Sensex lost 2919.26 points or 8.18% to 32,778.14, while the CNX Nifty was down by 868.25 points or 8.30% to 9,590.15.


The US markets ended deeply in red on Thursday, following the sharp pullback seen in the previous session, with the Dow Jones industrial average plummeting 10 percent. With the sell-off on the day, the Dow recorded its biggest one-day percentage drop since the stock market crash of 1987 and the Nasdaq and the S&P 500 joined the blue chip index in bear market territory. Concerns about the impact of the coronavirus continued to weigh on the markets after President Donald Trump addressed the nation about the outbreak. Trump was likely seeking to calm the markets but instead exacerbated concerns by announcing a ban on all travel from Europe to the US for the next 30 days. Markets fell even after the Federal Reserve took the highly unusual step of injecting more money into the bond market to stabilize the financial systems amid growing panic about the coronavirus and its stranglehold on the economy. The New York Fed will pump $1.5 trillion into the short-term lending markets that banks use to lend to each other on Thursday and Friday. On the economic data front, partly reflecting a steep drop in energy prices, the Labor Department released a report showing US producer prices declined by much more than expected in the month of February. Meanwhile, first-time claims for US unemployment benefits unexpectedly showed a modest decrease in the week ended March 7, according to a report released by the Labor Department. The report said initial jobless claims dipped to 211,000, a decrease of 4,000 from the previous week's revised level of 215,000. 


Crude oil futures ended sharply lower on Thursday after President Donald Trump imposed restrictions on travel from Europe to the US in an effort to contain the coronavirus pandemic, feeding concerns over the global economy and energy demand.  Besides, the slump in oil is being compounded by the threat of a flood of cheap supply as the United Arab Emirates followed Saudi Arabia in promising to raise oil output to a record high in April. The extra supply that is equivalent to 3.6 percent of global supplies will flood the market at a time when global fuel demand in 2020 is forecast to contract for the first time in almost a decade. Meanwhile, the US Energy Information Administration reported that domestic supplies of natural gas fell by 48 billion cubic feet for the week ended March 6. Crude oil futures for April fell $1.48 or about 4.5 percent to settle at 31.50 a barrel on the New York Mercantile Exchange. May Brent crude declined $2.57 or 7.2 percent to settle at $33.22 a barrel on London's Intercontinental Exchange.


Reversing previous session's strong gains, Indian rupee fell sharply against the US dollar on Thursday as market participants turned jittery amid mounting fears of a coronavirus-led economic slowdown. Traders also remained cautious with Department-Related Parliamentary Standing Committee on Commerce's statement that the FDI equity inflow in manufacturing is declining and the sector's share in the total FDI inflow in 2018-19 was around 23% which is very low. It said the low inflow of FDI in the manufacturing sector defeats the very purpose of Make in India scheme. Traders awaited official numbers of Consumer Price Index (CPI) for February and Index of Industrial Production (IIP) for January, to be released later in the day. Weakening of the American currency in the overseas market and easing crude oil prices failed to cast any impact on the rupee. On the global front, dollar slid in another seismic shift to price in more US interest rate cuts on Thursday, as President Donald Trump sapped market confidence with a coronavirus plan light on details. The last traded price of rupee was 74.25, 57 paise weaker from its previous close of 73.68 on Wednesday.


The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 9688.71 crore against gross selling of Rs 13172.43 crore, while in the debt segment, the gross purchase was of Rs 1702.78 crore with gross sales of Rs 9653.18 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.52 crore against gross selling of Rs 18.03 crore.


The US markets settled in red on Thursday with investors spooked that emergency fiscal and monetary packages won't be enough to stave off a recession. Asian markets are trading deeply in red on Friday following sell-off overnight on Wall Street over mounting recession fears linked to the coronavirus outbreak. Indian markets ended lower with losses of over 8% each on Thursday following a meltdown in global markets after the World Health Organization (WHO) termed the coronavirus outbreak as a pandemic. Today, the markets are likely to extend previous session's southward journey with yet another gap-down opening amid a rout on global equity markets amid rising worries over the spread of coronavirus across the world. As per a private report, India, on March 12, reported its first Coronavirus-linked death with the number of positive cases soaring to 78. There will some cautiousness with report that the government is likely to fall short of its revenue collection estimates in the current fiscal and may face challenges meeting the same in the next as the coronavirus pandemic slows down demand and economic activity. There will be also some concern as a private investment bank sharply cut its 2020-21 GDP growth forecast for India to 5.1% on fears around the coronavirus outbreak and also weak credit growth domestically. Though, some respite may come later in the day with optimistic macro-economic data on the domestic front. The government data showed that retail inflation dropped for the first time after six months in February, easing to 6.58% as prices of vegetables and other kitchen items cooled. Also, India's industrial output grew 2% in January against a contraction of 0.3% in December. Some support may also come with the Reserve Bank of India's (RBI) data showing that India's current account deficit narrowed sharply to $1.4 billion or 0.2% of GDP in the December quarter. Traders may take note of report that given the coronavirus pandemic and the resultant bloodbath in global markets, including in the country, and plunging asset prices, the RBI will begin to look beyond inflation and start easing rates to the tune of 65 basis points (bps) by June. Aviation stocks will be in focus as the civil Aviation ministry of India is in talks with domestic airlines to waive cancellation charge for flights which will be affected by the ongoing coronavirus situation. 


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  • M&M has signed a Share Purchase Agreement for purchase of additional 34,249 Equity Shares of Mitra, an Associate of the company, from its existing shareholders.  
  • The CCI has approved the acquisition of additional equity shares in Hero FinCorp, the financial services arm of Hero MotoCorp, by Otter and Link Investment Trust.  
  • Bharti Airtel has acquired a strategic stake in Spectacom Global under the Airtel Startup Accelerator Program, which focuses on supporting growth of early stage Indian start-ups. 
  • SBI has received approval for purchase of 725 crore shares in Yes Bank at a price of Rs 10 per share subject to all regulatory approvals.
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