Bears made a strong comeback over the Dalal Street on Monday, with the Sensex and Nifty ending the session lower by around 8 percent each. The start of the day was weak, amid CRISIL's report that credit pressures have intensified on India Inc as the coronavirus spread deepens in India and across the globe. It warned that Airlines, hotels, malls, multiplexes and restaurants will be the worst hit businesses. Traders also got worried, with a report that foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession. Weakness persisted over key equity markets throughout the trading day, even after India's Wholesale price index (WPI) inflation eased sharply to 2.26 percent for the month of February, 2020 as compared to 3.1 percent for the previous month and 2.93 percent during the corresponding month of the previous year. Market participants overlooked the Commerce Ministry's data report showing that India's exports rose for the first time in seven months in February growing by 2.91 percent to $27.65 billion. Besides, imports too grew by 2.48 percent to $37.5 billion, leaving a trade deficit of $9.85 billion as against $9.72 billion in February 2019. Finally, the BSE Sensex slipped 2713.41 points or 7.96% to 31,390.07, while the CNX Nifty was down by 757.80 points or 7.61% to 9,197.40.

The US markets ended sharply lower on Monday with the Dow Jones Industrial Average suffering its worst day since the Black Monday market crash in 1987 and its third-worst day ever - even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak. The US Federal Reserve reduced the interest rate to near zero as the coronavirus outbreak harmed communities and disrupted economic activity. Further, the Fed said it will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. Trading was halted for 15 minutes shortly after the open as a then-8% drop on the S&P 500 triggered a so-called circuit breaker. The markets fell to their lows into the close after President Donald Trump said the worst of the outbreak could last until August. He also said the US may be heading into a recession. On the economic data front, New York manufacturing activity unexpectedly contracted in the month of March, according to a report released by the Federal Reserve Bank of New York. The New York Fed said its general business conditions index plunged to a negative 21.5 in March from a positive 12.9 in February, with a negative reading indicating a contraction in regional manufacturing activity. Street had expected the general business conditions index to show a much more modest decrease and remain positive at 4.0. The steeper than expected represented the largest point decrease on record and dragged the index down to its lowest level since 2009. 

Crude oil futures ended at a four-year low on Monday, with US oil prices below $30 a barrel, on escalating concerns about outlook for energy demand after rising fears about the coronavirus outbreak prompted governments to impose travel restrictions. With the US government and more countries across Europe coming out with travel restrictions, and airlines slashing services, it is feared the demand for energy will see a substantial drop in the near to medium term. Oil prices dropped despite comments from the US President Donald Trump on Friday that the Department of Energy would purchase crude oil for the SPR in a bid to prop up prices. Crude oil futures for April dropped $3.03 or 9.6 percent to settle at $28.70 a barrel on the New York Mercantile Exchange. May Brent crude fell $3.80 or 11 percent to settle at $30.05 a barrel on London's Intercontinental Exchange.

Reversing previous session's strong gains, Indian rupee witnessed significant fall against the US dollar on Monday as market participants turned jittery amid mounting fears of a coronavirus-led economic slowdown. Besides, yet another meltdown in the equity markets put pressure on the rupee. Traders remained cautious even as India's Wholesale price index (WPI) inflation eased sharply to 2.26% for the month of February, 2020 as compared to 3.1% for the previous month and 2.93% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 1.92% compared to a build up rate of 2.75% in the corresponding period of the previous year. On the global front, dollar fell against a broad range of currencies on Monday after the US Federal Reserve made another surprise interest rate cut and major central banks took steps to relieve a shortage of dollars and provide extra liquidity. The last traded price of rupee was 74.27, 52 paise weaker from its previous close of 73.75 on Friday.

The FIIs as per Monday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 8436.59 crore against gross selling of Rs 15177.61 crore, while, in the debt segment, the gross purchase was of Rs 316.89 crore with gross sales of Rs 6794.76 crore. Besides, in the hybrid segment, the gross buying was of Rs 15.04 crore against gross selling of Rs 27.26 crore.

The US markets ended deeply in red on Monday after unprecedented steps taken by the Federal Reserve, lawmakers and the White House to slow the spread and blunt the economic hit of the coronavirus failed to restore order to markets. Asian markets are trading mostly lower on Tuesday following overnight sell-off on Wall Street. Indian markets plummeted on Monday as worries about the impact of coronavirus on domestic as well as the global economy grew stronger. Today, the start of session is likely to be slightly positive amid sharp fall in crude oil prices. Traders will be taking encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that RBI has many provisions to provide cushion to the sagging economy, however, that will completely depend on the circumstances. The RBI has announced two key measures that the central bank will take to improve the liquidity condition of the Indian economy and financial markets. The RBI will conduct another 6-month dollar/rupee swap on March 23 later this month along with conducting Long-Term Repo Operations (LTRO) of up to Rs 1 lakh crore at the policy rate in multiple tranches. Das noted that the government has been on a war-footing, taking necessary steps to prevent the spread of COVID-19. Though, there may be some cautiousness as the number of cases worldwide continue to pile up, with 114 cases in India. Traders may also be concerned with Care Ratings' repro that corporate India is expecting a 0.5% hit on economic growth in FY2020-21 if the coronavirus pandemic lasts longer, pushing up fiscal deficit and creating more bad loans for the bank. Meanwhile, capital markets regulator SEBI has proposed to exempt a listed company from following delisting regulations in case of its merger with a listed holding firm, if the shareholders of the subsidiary entity gets shares of the parent. Aviation stocks will be in focus with a private report that the coronavirus pandemic will bankrupt most airlines worldwide by the end of May unless governments and the industry take coordinated steps to avoid such a situation. There will be some reaction in power stocks with report that reversing the trend witnessed in the first two months of 2020, power demand has recorded a negative growth in the first half of March. 

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

Nifty Top volumes

• Infosys has completed the acquisition of Simplus, one of the fastest growing Salesforce Platinum Partners in the USA and Australia. 
• HDFC has received approval from its Board of Director for entering into an equity commitment letter agreement in relation to investment in YES Bank. 
• Maruti Suzuki's Pre-Owned car network -- True Value has introduced the facility of Vehicle Buying for car owners. 
• Bajaj Auto has launched its BS-VI range of commercial vehicles across brands -- RE, Maxima and Maxima Cargo.