Indian equity benchmarks ended
Tuesday's volatile session in red terrain. The start of the day was on positive
note, aided with the Reserve Bank of India (RBI) Governor Shaktikanta Das'
statement that there is space for further rate cuts despite upside risks to the
inflation outlook. Indices remained in green for the most part of the day,
after Niti Aayog's National Committee on Financial Inclusion and Literacy's
chairperson Bindu Dalmia said that the government's target of achieving a $5
trillion economy by 2024-25 sounds too idealistic. She added that the target
has been so set to raise the bar of India's economic performance. However,
volatility witnessed over the Dalal Street which pushed markets to alter
between green & red terrains, on account of mixed cues from the global
markets. Market participants overlooked reports that Securities and Exchange
Board of India (SEBI) has reviewed the margin framework for cash and
derivatives segments. The move has been taken to keep pace with the changing
market dynamics and to bring more efficiency in the risk management framework.
The framework, which has been prepared in consultation with the capital markets
regulator's Risk Management Review Committee, will come into effect from May 1,
2020. Finally, the BSE Sensex slipped 82.03 points or 0.20% to 40,281.20, while
the CNX Nifty was down by 31.50 points or 0.27% to 11,797.90.
The US markets once again ended
deeply in red on Tuesday, following the sell-off seen in the previous session,
after the Centers for Disease Control and Prevention warned Americans to
prepare for a coronavirus outbreak and investors attempted to assess the impact
of the epidemic in China on global trade and travel. The number of worldwide
cases of COVID-19 continues to rise. There are now 80,238 cases in 34 countries
and at least 2,700 deaths, according to the World Health Organization (WHO).
South Korea raised its coronavirus alert to the highest level, with the latest
spike in numbers bringing the total infected to more than 800. Meanwhile, Italy
has been the worst affected country outside of Asia, with more than 130
reported cases and seven deaths. Iran also confirmed 12 deaths. The US
Department of Health & Human Services called for $2.5 billion of additional
federal funds to help combat the coronavirus, including to stockpile surgical
masks and to work on a potential vaccine, which government agencies said likely
would not be available to the public for another 12 to 18 months. On the
economic data front, data released by the Conference Board showed consumer
confidence in the US improved slightly in the month of February. The Conference
Board said its consumer confidence index inched up to 130.7 in February from a
downwardly revised 130.4 in January. On the other hand, the report said the
present situation index tumbled to 165.1 in February from 173.9 in the previous
month.
Crude oil futures ended lower on
Tuesday, extending the notable pullback seen over previous sessions, as worries
about the spread of coronavirus (COVID-19) outside China, and the impact on
energy demand. The spread of the disease outside of the China and fears it
could have further implications for supply chains and the global economy have
contributed to recent weakness, alongside uncertainty over the ability of the
Organization of the Petroleum Exporting Countries (OPEC), and its allies to
respond with additional production cuts amid signs of strain between Saudi
Arabia and Russia. OPEC and its allies will meet late next week to discuss
demand and production levels. Crude oil futures for April fell $1.53 or 3
percent to settle at $49.90 a barrel on the New York Mercantile Exchange. April
Brent crude dropped $1.35 or 2.4 percent to settle at $54.95 a barrel on London's
Intercontinental Exchange.
Indian
rupee appreciates against dollar on Tuesday, amid fresh selling of the American
currency by exporters and banks. Traders took support with Niti Aayog's
National Committee on Financial Inclusion and Literacy's chairperson Bindu
Dalmia statement that the government's target of achieving a $5 trillion
economy by 2024-25 sounds too idealistic. She added that the target has been
so set to raise the bar of India's economic performance. However, upside remain
capped with Reserve Bank of India Governor Shaktikanta Das' statement that
slowing credit growth is one of the most critical challenges for the banking
industry and there is a need to focus on prudent lending by the banks. So far
this year, credit growth in the country has moderated to 7-7.5 per cent. On
global front, US dollar stayed soft on Tuesday amid expectations that the
Federal Reserve may cut interest rates this year to curb downside pressure on
the economy caused by China's coronavirus outbreak. The last traded price of
rupee was 71.88, 7 paise stronger from its previous close of 71.95 on Monday.
The FIIs as per Tuesday's data
were net sellers in both equity and debt segments. In equity segment the gross
buying was of Rs 5997.65 crore against gross selling of Rs 7733.32 crore, while
in the debt segment the gross purchase was of Rs 1507.25 crore with gross sales
of Rs 4694.35 crore. Besides, in the hybrid segment the gross buying was of Rs
500.01 crore against gross selling of Rs 16.00 crore.
The US markets ended lower on
Tuesday as investors absorbed increasingly worrisome forecasts about the
coronavirus, which is spreading faster and more broadly than initially thought
and is renewing recession anxiety. Asian markets are trading in red in early
deals on Wednesday in the wake of a further escalation in coronavirus cases in
South Korea, Asia's fourth-largest economy. Indian markets ended highly
volatile session in red on Tuesday, extending their losses for third day, as
investors continued to weigh the financial impact of the coronavirus pandemic
on the global economy. Today, the markets are likely to get negative start
tracking sell-off in the global markets. There will be some cautiousness with
Care Ratings report that it has projected Gross Domestic Product (GDP) growth
of 4.5% for Q3-FY20, which is lower than 6.6% GDP growth recorded in the
corresponding period a year ago. For the full year FY20, it has estimated GDP
growth to be at 5% with a downward bias. Traders will also be concerned with
payroll data of the Employees' State Insurance Corporation (ESIC) showing that
around 12.67 lakh jobs were created in December 2019 lower against 14.59 lakh
in the previous month. Though, fall in crude oil prices overnight may support
the markets. Some respite may come with Crisil's report that increased demand
for retail loans, strong growth in lending by private banks and pick-up in
economic activity may improve credit growth to 8-9 per cent in the next
financial year. Some support may also come with report that India and the US
have finalised defence deals worth $3 billion, and signed three MoUs, including
one in the energy sector, as Prime Minister Narendra Modi asserted that the two
countries have decided to take Indo-US ties to comprehensive global partnership
level. Meanwhile, amid rising instances of defaults, markets regulator SEBI has
proposed a stronger framework for governing corporate bonds and debenture
trustees, including enhanced disclosure requirements. Among other measures, the
watchdog has suggested that NBFCs create charge on the identified assets for
every bond issue. There will be some buzz in the banking stocks with Crisil
Ratings' statement that a slowdown in bank lending may be bottoming out this
fiscal, while gross credit off take may rise 8-9% year-on-year in fiscal 2021
backed by retail demand. There will be some reaction in the sugar stocks as
industry body ISMA revised the country's sugar production upward by two per
cent to 26.5 million tonnes for the ongoing 2019-20 marketing year, much lower
than last year but enough to meet the local demand.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,797.90
|
11,757.52
|
11,860.67
|
BSE Sensex
|
40,281.20
|
40,155.86
|
40,471.27
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
881.85
|
35.15
|
34.60
|
35.85
|
Tata Motors
|
527.20
|
149.90
|
147.10
|
153.05
|
SBI
|
390.51
|
326.80
|
323.28
|
329.23
|
ONGC
|
182.55
|
97.55
|
96.45
|
99.45
|
ITC
|
153.14
|
201.80
|
200.40
|
204.30
|
Infosys is all set to launch a state-of-the-art Cyber Defense Center in Indianapolis.
Hindustan Unilever has received approval from its board to form a new 100% subsidiary of the company.
Tech Mahindra has signed an agreement to acquire 100% stake in US-based Zen3 Infosolutions for $64 million in an all-cash deal.
JSW Steel has been declared as a preferred bidder for Jajang iron ore block in Odisha.