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.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,590.15
|
9,385.18
|
9,917.93
|
BSE Sensex
|
32,778.14
|
32,023.33
|
34,002.73
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
3,378.13
|
25.05
|
18.77
|
30.02
|
Tata Motors
|
1,435.51
|
88.00
|
83.10
|
93.90
|
SBI
|
997.70
|
212.60
|
203.50
|
226.80
|
ONGC
|
761.38
|
62.50
|
60.20
|
66.60
|
ITC
|
520.41
|
155.80
|
147.85
|
166.45
|
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.