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NSE Intra-day chart (27 March 2020)
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Market Commentary 30 March 2020
Benchmarks to make gap-down opening following global markets

 

In an extremely volatile session, Indian equity benchmarks traded between green and red terrain throughout the day and ended flat on Friday, despite strong trend seen in other Asian markets.  Key indices staged a gap up opening and traded jubilantly, as FM Nirmala Sitharaman announced a coronavirus relief package for the economically weaker sections of the society.  However, markets came off the day's high and turned volatile in early afternoon session after the RBI announced a cut in its repo rate by 75 basis points (bps) to 4.4 per cent while reverse repo rate was reduced by 90 bps to 4 per cent. Apart from this, the central bank cut the cash reserve ratio (CRR) for the banks by 100 bps to 3 per cent with effect from March 28 for the next year, which it said will release Rs 1.37 lakh crore in liquidity. Along with these measures, RBI Governor Shaktikanta Das said all the commercial banks were permitted to allow a three-month moratorium on payment of instalments of all term loans as on March 1, 2020. Sentiments remain muted in late trade, as RBI Governor admitted that growth projection of 4.7% for the March quarter and 5% for the whole fiscal was at risk. Some pessimism also came as Rating agency Crisil cut its growth estimate for India to 3.5 percent for next financial year (FY21) amid severe dent in the economic activity due to the coronavirus pandemic. The agency said the estimate of 3.5 percent growth in 2020-21 assumes a normal monsoon and also a subsidising of the pandemic's economic impact in the June quarter. The slump in growth will be concentrated in the first half of the next fiscal, while the second half should see a mild recovery. Finally, the BSE Sensex lost 131.18 points or 0.44% to 29,815.59, while the CNX Nifty was up by 18.80 points or 0.22% to 8,660.25.

 

The US markets ended deeply in red on Friday as traders looked to cash in on the strong gains seen in recent days. Lingering concerns about the economic impact of the coronavirus also weighed on the markets, as the number of confirmed cases in the US surpassed the number of cases in China or Italy. There have been more than 97,000 confirmed coronavirus cases in the US and nearly 1,500 deaths. Besides, adding to the negative sentiment, the University of Michigan released a report showing consumer sentiment deteriorated by much more than initially estimated in the month of March. The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9. The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century. However, the Commerce Department released a report showing personal income in the US increased more than expected in the month of February, while personal spending rose in line with street estimates. The report said personal income climbed by 0.6 percent in February, matching the increase seen in January. Street had expected income to rise by 0.4 percent. Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent for the second straight month, matching expectations. Excluding price changes, personal spending inched up by just 0.1 percent for the third consecutive month. 

 

Extending their previous session's losses, crude oil futures ended lower on Friday as worries about energy demand outlook outweighed massive stimulus announced by central banks and governments to limit the economic impact of the coronavirus spread. Meanwhile, Saudi Arabia said that the kingdom has not had any contacts with Moscow about oil production cuts or building out the OPEC+ alliance. Besides, oil prices have collapsed in March, with the near-lockdown of major economies in response to the COVID-19 pandemic slashing demand for crude. Month to date, WTI and Brent prices have each lost roughly 50%. Crude oil futures for May fell $1.09 or 4.8 percent to settle at $21.51 a barrel on the New York Mercantile Exchange. May Brent crude declined $1.41 or 5.4 percent to settle at $24.93 a barrel on London's Intercontinental Exchange.

 

Indian rupee rose for the third straight day against dollar on Friday, amid fresh selling of the American currency by exporters and banks. Traders took support after the Reserve Bank of India (RBI) announced various measures to support the economy amid the coronavirus-induced crisis. The RBI cut benchmark interest rate by 75 basis points to 4.4 percent. The central bank also reduced the cash reserve ratio (CRR) of all banks by 100 basis points to 3 percent with effect from March 28 for 1 year.  Traders paid no heed towards rating agency Crisil's report that it has cut its growth estimate for India to 3.5 percent for next financial year (FY21) amid severe dent in the economic activity due to the coronavirus pandemic. On the global front, Euro fell against dollar on Friday in a sign investors were focusing once more on the spread of the coronavirus pandemic despite hopes for further stimulus measures to combat its economic impact. The last traded price of rupee was 74.90, 26 paise stronger from its previous close of 75.16 on Thursday.

 

The FIIs as per Friday'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 9480.60 crore against gross selling of Rs 9469.62 crore, while in the debt segment, the gross purchase was of Rs 621.73 crore with gross sales of Rs 2450.15 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.62 crore against gross selling of Rs 4.58 crore.

 

The US markets ended sharply lower on Friday as the national shutdown in response to the coronavirus delivered crushing losses to investors. All Asian markets are trading in red on Monday as fears mounted that the global shutdown for the novel fast-spreading coronavirus (COVID-19) could last for months, doing untold harm to economies. Indian markets gave up early gains and ended mixed on Friday as coronavirus worries persisted. Today, the markets are likely to get gap-down opening tracking sell-off in the global markets amid Covid-19 pandemic. Globally, the total number of reported cases has now risen to over 7.2 lakh with nearly 34,000 deaths. In India, the total number of confirmed coronavirus cases has crossed 1,000 mark, with 27 people dead so far. Traders will be concerned with the International Monetary Fund's (IMF) statement that the world is in the face of a devastating impact due to the coronavirus pandemic and has clearly entered a recession, but projected a recovery next year. There will be some cautiousness with domestic rating agency Icra's statement that India's gross domestic product (GDP) is likely to contract by 4.5 per cent in the April-June 2020 quarter and will rise by only 2 per cent in 2020-21 on the coronavirus impact, despite the Reserve Bank of India's (RBI) massive actions to spur the economy. Also, the country's foreign exchange reserves fell by a whopping $11.98 billion to $469.909 billion in the week to March 20 as the Reserve Bank continued to supply dollars into the market to stem fall in the rupee. Investors will be eyeing on the Finance Ministry and RBI meeting to be held on March 31 to decide on government's borrowing plan for the first half of 2020-21 amid the lockdown to contain the spread of coronavirus. Though, traders may take note of the Economist Intelligence Unit (EIU) in its post-Covid-19-outbreak stating that even as the Indian economy is likely to be battered by the Coronavirus pandemic this year, it is still likely to be better off than all other G20 countries. Meanwhile, a report stated that India is boosting its overall health infrastructure by initiating measures like designating dedicated hospitals for affected patients in states, ramping up procurement of ventilators and mobilising resources of Railways and armed forces to deal with any eventuality. There will be some buzz in the telecom stocks with industry body COAI's statement that debt-ridden telecom operators are likely to opt for three-month moratorium to avoid cash crunch during the lockdown. Auto stocks will be in focus as the Supreme Court (SC) allowed the sale of only 10 of the 700,000 unsold BS4 vehicles (7.27 lakh vehicles) beyond the March 31 deadline. There will be some reaction in power stocks with report that peak power demand in the country dipped over 26% to 120.31 gigawatts (GW) on March 26 as compared to 163.72 GW on March 20, showing impact of a nationwide lockdown amid the coronavirus outbreak. 

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

8,660.25

8,442.47

8,958.47

BSE Sensex

29,815.59

29,066.38

30,845.42

                                                 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

State Bank of India

1,147.47

195.95

190.00

206.90

ICICI Bank

728.91

339.85

324.05

357.60

Axis Bank

710.43

359.75

339.38

394.78

Tata Motors

588.24

70.70

68.07

74.62

Indusind Bank

438.92

411.10

356.12

502.32

 

  • NTPC has executed a SPA with the President of India for acquisition of legal and beneficial ownership of equity shares held by the President of India in NEEPCO. 
  • Coal India has relaxed payment terms and directed the railways to defer loading of rakes for non-power buyers due to last-mile connectivity disruption following the nationwide lockdown. 
  • ICICI Bank has invested Rs 51.09 crore in Auxilo Finserve, an associate company of Balrampur Chini Mills, by way of subscription to its 3,40,62,153 Equity Shares. 
  • HDFC Bank has offloaded shares worth Rs 7.63 crore of GHCL.
News Analysis