Indian equity markets snapped
seven days losing streak on Tuesday, with Sensex and Nifty ending higher, after
the Reserve Bank of India (RBI) said it is closely monitoring global as well as
domestic situation regarding the impact of deadly coronavirus and ready to take
necessary action to ensure orderly functioning of financial markets. After a
fabulous start, indices remained in green, aided with Union Finance Minister
Nirmala Sitharaman's statement that the direct tax dispute resolution scheme
announced in Budget will be of great help to people as they will be able to
save time and money spent in fighting cases. However, volatility hit over the
markets during the afternoon deals, after the Organisation for Economic
Cooperation and Development (OECD) lowered India's GDP growth forecast to 5.1%,
from its earlier projection of 6.2%, for FY21 on concerns over the impact of
deadly coronavirus on the domestic as well as the global economy. But, key
benchmarks again gained the traction in the last hours of the trading session,
after the Finance Ministry said that women account for over 81 per cent of the
total beneficiaries under the Stand Up India scheme with loans worth Rs 16,712
crore sanctioned for them in nearly 4 years time. Finally, the BSE Sensex
gained 479.68 points or 1.26% to 38,623.70, while the CNX Nifty was up by
170.55 points or 1.53% to 11,303.30.
The US markets ended deeply in
red on Tuesday, after a volatile trading session, as the Federal Reserve
announced a surprise decision to cut interest rates by 50 basis points to 1 to
1-1/4 percent. The Fed was widely expected to wait until its next monetary
policy meeting later this month to announce the rate cut. The move was partly seen
as an effort to calm the markets in the wake of the coronavirus outbreak but
may have served to raise concerns about how severely the central bank expects
the epidemic to impact the economy. In an accompanying statement, the Fed said
the fundamentals of the US economy remain strong but noted the coronavirus
poses evolving risks to economic activity. The central bank added that it is
closely monitoring developments and their implications for the economic outlook
and will use its tools and act as appropriate to support the economy. However,
Fed Chairman Jerome Powell indicated that additional stimulus would come in the
form of further rate cuts rather than tools like quantitative easing. The
surprise move by the Fed came shortly after finance chiefs from the world's
largest economies released a statement pledging to use all appropriate policy
tools to address the economic fallout from the deadly coronavirus outbreak. The
emergency rate cut, the first since the financial crisis, also came after
President Donald Trump ramped up pressure on the Fed to lower rates. In
addition to the US, a number of countries have already acted independently,
including the Reserve Bank of Australia and Malaysia's central bank, which both
reduced their benchmark interest rates Monday, citing coronavirus as the
reason. Meanwhile, the European Central Bank is working on measures to provide
liquidity to businesses harmed by the outbreak.
Crude oil futures ended higher on
Tuesday and off the day's best levels, while Brent crude settled lower on the
surprise move by the Federal Reserve to cut rates by as much as 50 basis points,
and more importantly, nearly two weeks ahead of the scheduled monetary policy
meeting, has raised fears about the magnitude of the impact of the coronavirus
outbreak on the global economy. Oil prices had traded sharply higher earlier in
the session amid expectations the Organization of the Petroleum Exporting
Countries (OPEC) and allies will decide to deepen production cuts during their
meeting this week. The OPEC and its allies are scheduled to meet this Thursday
and Friday in Vienna. Currently, the group is producing 1.7 million barrels
less per day. Crude oil futures for April gained 43 cents or about 0.9 percent
to settle at $47.18 a barrel on the New York Mercantile Exchange. However, May
Brent crude declined 4 cents or 0.08 percent to settle at $51.86 a barrel on
London's Intercontinental Exchange.
Indian
rupee came under pressure for the third consecutive trading session and went
below the 73 a dollar mark on Tuesday despite hopes that policymakers across
the world would take measures to ease the economic fallout from the coronavirus
outbreak. Finance ministers and central bank chiefs from G7 countries will hold
talks later in the day to discuss ways to coordinate their responses to cushion
the epidemic's impact on the global economy. The rupee sentiment got hit as the
Organisation for Economic Cooperation and Development (OECD) lowered India's
GDP growth forecast to 5.1%, from its earlier projection of 6.2%, for FY21 on
concerns over the impact of deadly coronavirus on the domestic as well as the
global economy. On the global front, safe-haven Japanese yen gained on the
dollar on Tuesday, as the market tempered hopes for global monetary easing with
worries about its scale and efficacy in combating the economic damage from the
coronavirus outbreak. The last traded price of rupee was 73.30, 54 paise weaker
from its previous close of 72.76 on Monday.
The FIIs as per Tuesday's data were
net sellers in the both equity and debt segments. In equity segment, the gross buying
was of Rs 9273.95 crore against gross selling of Rs 9574.56 crore, while in the
debt segment, the gross purchase was of Rs 1957.45 crore with gross sales of Rs
3940.55 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.72
crore against gross selling of Rs 10.17 crore.
The US markets ended lower on
Tuesday after the Federal Reserve cut interest rates in an emergency move to
shield the US economy from the impact of the coronavirus. Asian markets are
trading mixed in early deals on Wednesday following sell-off on Wall Street
overnight. Indian markets ended higher with gains of over a percent on Tuesday,
amid hopes of policy easing by major central banks of the world to address the
economic fallout from the spreading coronavirus. Today, the markets are likely
to get a cautious start amid mixed cues from Asian peers and ahead of India
Service PMI numbers for February to be released later in the day. Traders will
be concerned with the government data showing that foreign direct investment
(FDI) into India dipped marginally by 1.4% to $10.67 billion (about Rs 76,800
crore) during October-December period of 2019-20. Inflow of FDI during
October-December of 2018-19 stood at $10.82 billion. Though, some encouragement
may come later in the day as the Reserve Bank of India (RBI) said it stands
ready to safeguard the country's banking system from financial and market risks
stemming from the spread of Covid-19, citing expectations of coordinated policy
action by central banks around the world amid threats to global demand and
currency movements. Some support may also come as Minister of State for
Agriculture Kailash Chaudhary expressed confidence of achieving the target of
doubling farmers income by 2022. Traders may take note of report that the
government has collected over Rs 7.52 lakh crore as direct taxes till January
31 of the current fiscal. Meanwhile, Finance minister Nirmala Sitharaman has
introduced the Banking Regulation Amendment Bill in the Lok Sabha. There will
be some buzz in the auto stocks as parliamentary panel suggested a lower GST
rate for the automobile segment at least till the revival of the sector and
uniform road tax across all states against the backdrop of negative growth in
the automobile production since July 2018. Sugar stocks will be in limelight as
the government said the country's total sugar production is estimated to
decline by 18 percent to 27.3 MT in the ongoing 2019-20 season on fall in sugarcane
output in key growing states. There will be some reaction in Cement stocks with
ICRA's statement that the domestic cement industry's capacity utilisation is
likely to moderate in FY20 to sub-70% levels. It added that the demand revival
trend witnessed in recent months is likely to continue in the fourth quarter of
FY20.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,303.30
|
11,189.82
|
11,379.52
|
BSE Sensex
|
38,623.70
|
38,259.25
|
38,871.19
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,642.68
|
31.20
|
30.03
|
32.83
|
Tata Motors
|
867.66
|
130.35
|
126.60
|
132.75
|
SBI
|
619.49
|
289.85
|
285.30
|
294.40
|
Vedanta
|
369.75
|
119.55
|
115.13
|
122.48
|
ONGC
|
240.98
|
93.35
|
90.67
|
95.02
|
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