Indian equity benchmarks
witnessed a bloodbath on Monday's trading session, by falling over four
percent, tracking weak cues from overseas as investors braced for a prolonged
period of uncertainty as coronavirus-induced lockdowns tightened across the
world and in India. Key indices opened in red and stayed in the negative
terrain for whole trading session, as traders remain 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. Some cautiousness also came in
as 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. Key indices continued
their free fall during the final hour of trade, as Fitch Solutions slashed its
estimate for India's GDP growth in the fiscal starting April 1 to 4.6 per cent
due to weaker private consumption and contraction in investment amid
coronavirus outbreak, costing economies around the globe. Anxiety persisted
over the street, even after the government constituted 11 empowered groups to
suggest measures to ramp up healthcare, put the economy back on track and
reduce misery of people as quickly as possible post the 21-day lockdown imposed
to contain the coronavirus pandemic. Traders even overlooked 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. Finally, the
BSE Sensex lost 1375.27 points or 4.61% to 28,440.32, while the CNX Nifty was
down by 379.15 points or 4.38% to 8,281.10.
The US markets ended higher with
gains of over three percent on Monday, largely offsetting the pullback seen in
last session, after President Donald Trump extended national social distancing
guidelines until at least April 30. Trump had previously hoped to reopen the
country by Easter Sunday, on April 12, but said he decided to extend the guidelines
in an effort to keep the death toll from the coronavirus below 100,000. The
announcement by Trump comes as data from Johns Hopkins University shows more
than 153,000 confirmed coronavirus cases in the US and more than 2,800 deaths.
Trump said that he expects the US to be well on our way to recovery by June 1.
On the economic data front, pointing to a healthy housing market before the
coronavirus-induced shutdown, the National Association of Realtors (NAR)
released a report showing an unexpected jump in pending home sales in the month
of February. NAR said its pending home sales index surged up by 2.4 percent to
111.5 in February after spiking by 5.3 percent to an upwardly revised 108.9 in
January. The continued increase surprised market participants, who had expected
pending home sales to pull back by 1.0 percent. A pending home sale is one in
which a contract was signed but not yet closed. Normally, it takes four to six
weeks to close a contracted sale.
Crude oil futures ended sharply
lower on Monday, pushing the front month contracts to their lowest close in
more than 18 years. Rising concerns about the outlook for energy demand due to
businesses across the globe shutting down to prevent the spread of the novel
coronavirus took a toll of oil prices. Additionally, with large producers like
Saudi Arabia and Russia not appearing keen on resorting to any meaningful
output reductions, there is a possibility of a glut in the oil market. For the
month to date, WTI and Brent crude are both off by about 55%, based on the
front month contracts. Crude oil futures for May fell $1.42 or 6.6 percent to
settle at $20.09 a barrel on the New York Mercantile Exchange. May Brent crude
fell $2.17 or 8.7 percent to settle at $22.76 a barrel on London's
Intercontinental Exchange.
Indian rupee depreciated sharply
against the US dollar on Monday, amid buying in the American currency by banks
and importers. Traders remain concerned as Fitch Solutions slashed its estimate
for India's GDP growth in the fiscal starting April 1 to 4.6 per cent due to
weaker private consumption and contraction in investment amid coronavirus
outbreak, costing economies around the globe. A broadly stronger US dollar
along with a weak trend in domestic equity markets also weighed on investors'
sentiment. On the global front, dollar snapped a week of declines and the
safe-haven yen found support on Monday, as coronavirus lockdowns tightened across
the world and investors braced for a prolonged period of uncertainty. The last
traded price of rupee was 75.59, 70 paise weaker from its previous close of
74.89 on Friday.
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 9616.35 crore against gross
selling of Rs 8586.97 crore, while in the debt segment, the gross purchase was
of Rs 407.33 crore with gross sales of Rs 1979.38 crore. Besides, in the hybrid
segment, the gross buying was of Rs 6.00 crore against gross selling of Rs 6.95
crore.
The US markets ended higher on
Monday after President Donald Trump abandoned the idea of getting the economy
back up and running by Easter. Asian markets are trading in green on Tuesday as
factory data from China held out the hope of a rebound in activity even as
other countries across the globe all but shut down. Indian markets ended deeply
in red on Monday as the number of coronavirus infections in the country showed
no signs of slowing in spite of a nationwide lockdown. Today, the start of last
trading session of fiscal year 2019-20 (FY20) is likely to be gap-up following
rebound in the global markets. Some support will come with report that the
government has put off implementation of the uniform stamp duty on transfer of
shares, debentures, futures, options, currency and other capital market
instruments to July 1, 2020. Also, some support will come as in line with the
Budget announcement, the Reserve Bank opened certain specified categories of
government securities (g-secs) for non-resident investors as part of an
initiative to deepen the bond market. Traders may take note of report that the
government has budgeted a total of Rs 42,000 crore towards disaster relief in
the FY21 budget. From April onwards, these budget lines will be available to
states to fight against COVID-19 among other calamities. Though, there may be
some concern amid fast spreading coronavirus. India's cumulative coronavirus
infections have reached 1,251, registering the highest single-day increase of
227 cases on March 30, while the death toll rose to 32. Also, there may be some
caution as Fitch Solutions slashed its estimate for India's GDP growth in the
fiscal starting April 1 (FY21) to 4.6% due to weaker private consumption and
contraction in investment amid coronavirus outbreak, costing economies around
the globe. Traders will be cautious as domestic credit rating agency India
Ratings (Ind-Ra) cut its FY21 growth forecast to 3.6% amid coronavirus-related
worries. It has assumed that a full or partial lockdown will continue till end
of April and economic activities will be gradually restored only after May.
Besides, the impact of the novel coronavirus outbreak has been felt in the
collection of the Goods and Services Tax (GST) for February, with the
government collecting Rs 98,000 crore so far (till March 30, 2020). Meanwhile,
SEBI has decided to provide temporary relaxations in compliances for Credit
Rating Agencies (CRAs). There will be some buzz in the e-commerce stocks with
report that e-commerce companies are resuming their services. But, several
ecommerce companies are struggling to get enough of curfew passes, besides
being short of delivery personnel. Auto stocks will be in focus with a private
report that auto sales for March could see a 50% year-on-year (Y-o-Y) decline
in volumes, given the lockdown and decline in footfall during the second half
of the month.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8,281.10
|
8,158.07
|
8,490.07
|
BSE Sensex
|
28,440.32
|
27,988.35
|
29,194.93
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Axis Bank
|
617.73
|
368.15
|
345.00
|
386.65
|
State Bank of India
|
600.83
|
186.90
|
183.77
|
192.52
|
ICICI Bank
|
365.61
|
313.40
|
305.03
|
327.83
|
Tata Motors
|
352.78
|
68.15
|
66.93
|
69.68
|
Oil & Natural Gas
Corporation
|
329.36
|
63.35
|
66.93
|
65.97
|
NTPC has completed acquisition of entire equity stake of Government of India in North Eastern Electric Power Corporation and THDC India.
State Bank of India has raised $100 million green bonds, the first such bond by any state-owned bank in this fiscal.
Sun Pharmaceutical Industries has received a communication from the USFDA indicating that the Halol facility has been classified as Official Action Indicated.
Maruti Suzuki India has examined its ability to assist in the production of ventilators, masks and other protective equipment to support India's preparation against COVID-19.