NSE Intra-day chart (13 April 2020) | | | Top Gainers | | | Top Losers | | | World Indices | | | Indices | | | FII Activity(Rs. Cr) | | |
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Market Commentary | | 15 April 2020 | |
Benchmarks to make cautious start amid mixed cues from Asian peers
Indian equity indices ended
highly volatile day of trade on lower note on Monday, as the government is set
to extend a lockdown to contain the spread of the coronavirus, while a rise in
oil prices also weighed on sentiments. Key indices made pessimistic start and
traded with heavy losses, as traders remain concerned with the World Bank in
its South Asia Economic Focus report stating that India may record its worst
growth performance since the 1991 liberalisation this fiscal year (FY21) as the
coronavirus outbreak severely disrupts the economy. It said India's economy is
expected to grow 1.5 per cent to 2.8 per cent in FY21. Besides, overseas
investors pulled out a net Rs 9,103 crore from the Indian markets in April so
far as the Covid-19 crisis triggered a return to safe haven assets like gold
and dollar-denominated securities. However, markets recovered partly from the
lows of the day in afternoon session, taking support from data showing that
India's industrial output, measured in Index of Industrial Production (IIP),
grew 4.5% in February 2020, mainly on account of higher output in mining,
manufacturing and electricity sector. The output for February is the highest
number since July 2019 - when it stood at 4.3%. IIP had grown by 0.2% in
February 2019 and 2% in the preceding month (January 2020). Though, markets
failed to hold the recovery and fell sharply in late afternoon session, as
anxiety remained among traders with Federation of Indian Export Organisations
(FIEO) stating that India's exports sector may witness about 15 million job
losses and rising non-performing assets (NPAs) amongst exporting units,
following the cancellation of over 50 percent of orders and gloomy forecast for
the future due to the Covid-19 pandemic. Investors also awaited cues from CPI
data for March and the minutes of the Monetary Policy Committee's latest
meeting scheduled to be released later in the day. Finally, the BSE Sensex lost
469.60 points or 1.51% to 30,690.02, while the CNX Nifty was down by 118.05
points or 1.30% to 8,993.85.
The US markets ended higher on
Tuesday as traders continued to express optimism about signs of a flattening of
the coronavirus curve. President Donald Trump defended his administration's
response to the pandemic and indicated he is working on plans to re-open the
country. Meanwhile, White House health advisor Dr. Anthony Fauci and New York
Governor Andrew Cuomo, have also recently expressed cautious optimism. Cuomo
said that the number of coronavirus deaths in New York rose to 778 on Monday
after declining for two days but noted other indicators continue to be more
encouraging. However, the International Monetary Fund warned the global economy
could see the worst recession since the Great Depression as a result of the
coronavirus pandemic and the containment measures adopted to slow the outbreak.
World GDP is set to contract 3 percent this year, thanks to the lockdowns
imposed by countries around the world. The lender expects global GDP to grow
5.8 percent next year. On economic data front, import prices in the US showed a
steep drop in the month of March, according to a report released by the Labor
Department, while export prices also fell sharply. The Labor Department said
import prices plunged by 2.3 percent in March after falling by a revised 0.7
percent in February. The nosedive reflected the largest monthly drop in import
prices since January of 2015. Street had expected import prices to tumble by
1.7 percent compared to the 0.5 percent drop originally reported for the
previous month. The bigger than expected decrease in import prices came as
prices for fuel imports plummeted by 26.8 percent in March after sinking 9.0
percent in February. Prices for petroleum and natural gas both showed
substantial decreases. Excluding the steep drop in fuel prices, prices for
non-fuel imports were unchanged in March after rising by 0.3 percent in
February.
Crude oil futures ended deeply in
red on Tuesday, as mounting concerns about a drop in energy demand on account
of the virus pandemic outweighed planned output cuts from OPEC and its allies.
Traders also ignored prospects for a notable drop in US shale oil production in
the coming month. Besides, the global economic outlook is still bearish for oil
also, with the International Monetary Fund forecasting a contraction in the
global economy at a 3% annual rate this year, followed by a 5.8% rebound in
2021. That's a deeper recession than during the 2008-09 financial crisis. The
IMF said the US economy would shrink 5.9% this year. Crude oil futures for May
dropped $2.30 or 10.3 percent to settle at $ 20.11 a barrel on the New York
Mercantile Exchange., June Brent crude fell $2.14 or 6.7 percent to settle at $
29.60 a barrel on London's Intercontinental Exchange.
Erasing all of its initial
losses, Indian rupee ended almost flat against dollar on Monday, tracking weak
domestic equities and sharp rise in coronavirus cases in the country. Market
participants were concerned as the World Bank said India is likely to record
its worst growth performance since the 1991 liberalisation this fiscal year as
the coronavirus outbreak severely disrupts the economy. Besides, investors
awaited cues from CPI data for March and the minutes of the Monetary Policy
Committee's latest meeting scheduled to be released later in the day. However,
traders found some support with data showing that India's industrial output,
measured in Index of Industrial Production (IIP), grew 4.5% in February 2020,
mainly on account of higher output in mining, manufacturing and electricity
sector. The output for February is the highest number since July 2019 - when it
stood at 4.3%. IIP had grown by 0.2% in February 2019 and 2% in the preceding
month (January 2020). Finally, the rupee ended at 76.27, 1 paisa stronger from
its previous close of 76.28 on Thursday.
The FIIs as per Monday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 7376.33 crore against gross
selling of Rs 5489.37 crore, while in the debt segment, the gross purchase was
of Rs 825.07 crore with gross sales of Rs 2224.60 crore. Besides, in the hybrid
segment, the gross buying was of Rs 15.34 crore against gross selling of Rs
3.78 crore.
The US markets ended higher on
Tuesday as traders continued to express optimism about signs of a flattening of
the coronavirus curve. Asian markets are trading mixed on Wednesday as warnings
of the worst global recession since the 1930s underlined the economic damage
already done even as some countries tried to re-open for business. Indian
markets ended sharply lower on Monday, with rate-sensitive financials, auto and
realty stocks pacing the decliners. Markets remain closed on Tuesday on account
of Dr. Babasaheb Ambedkar Jayanti. Today, the start of session is likely to be
cautious amid mixed cues from Asian peers and the government's decision to
extend the nation-wide lockdown till May 3. There will be concerned with report
that confirmed COVID-19 cases in India stand at 10,815. The death toll from the
outbreak in India is at 353. Maharashtra, Delhi and Tamil Nadu have reported
the highest number of cases. Also, there will be some cautiousness as the
International Monetary Fund (IMF) cut its projection for India's economic
growth to 1.9% for the current financial year, the lowest since the 1991
balance of payments (BoP) crisis, against its 5.8% forecast earlier. Meanwhile,
investors will keep eye on start of earnings numbers for the fourth quarter
ended and year ended March 31, 2020. Though, some support may come later in the
day with supporting macro-economic data. The government data showed that the
consumer Price Index-based (CPI) inflation eased for the second month in a row
in March, at 5.91%, on the back of further reduction in rate of food inflation.
Market participants may take encouragement with report that the government may
soon come up with details of a second stimulus package. Traders may take note
of report that India may soon start trials of treatment protocols on
coronavirus (Covid-19) patients using ayurvedic medicines. Aviation stocks will
be in focus with report that India will keep domestic and international flights
suspended till May 3 in alignment with a national lockdown being extended.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8,993.85
|
8,900.15
|
9,099.80
|
BSE Sensex
|
30,690.02
|
30,377.54
|
31,099.11
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
704.14
|
74.25
|
72.10
|
77.00
|
State Bank of India
|
518.48
|
183.50
|
181.50
|
187.10
|
Vedanta
|
374.71
|
78.30
|
74.82
|
80.62
|
Axis Bank
|
334.32
|
418.95
|
404.67
|
430.57
|
NTPC
|
332.67
|
88.65
|
85.88
|
90.28
|
L&T's construction arm -- L&T construction has bagged three EPC Water Management orders from the KUIDFC for its Water a Effluent Treatment Business. Dr. Reddy's Laboratories has launched blood cancer drug Invista in India. APSEZ has raised Rs 1,500 crore and allotted 15,000 Rated, Listed, Secured, Redeemable, NCDs of the face value of Rs 10,00,000 each on private placement basis. Tata Steel has received approval from Committee of Directors to raise Rs 7,000 crore, 70,000 Unsecured, Redeemable, Rated, Listed, NCDs of face value Rs 10,00,000 each to be issued in one or more issues on the Private Placement Basis.
News Analysis
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