Indian equity benchmarks ended
lower on Monday for the seventh straight day, as detection of fresh coronavirus
cases in the country spooked domestic investors. After a firm start, indices
remained in green for the most part of the session, as the government collected
Rs 1.05 lakh crore as Goods and Services Tax (GST) revenue in February, up 8%
over the same month last year. Adding some relief among market participants,
the growth of India's eight core sectors improved to 2.2% in January 2020 against
1.5% in the same month last year, helped by expansion in the production of
coal, refinery products and electricity. But, indices slipped into red in the
last hour of trade, as Fitch Solutions cut its forecast for India's economic
growth to 4.9 per cent in the current fiscal that ends March 31, saying
manufacturing could come under pressure from weak domestic demand and supply
chain disruptions due to the coronavirus outbreak. The GDP growth is forecast
to recover slightly to 5.4 per cent in 2020-21 (April 2020 to March 2021).
Besides, the Controller General of Accounts data showed that India's fiscal
deficit touched 128.5 percent of current financial year budget target at
January-end. The deficit during the same period of FY19 was 121.5 percent. Finally,
the BSE Sensex slipped 153.27 points or 0.40% to 38,144.02, while the CNX Nifty
was down by 69.00 points or 0.62% to 11,132.75.
The US markets ended sharply
higher on Monday with Dow Jones Industrial Average scoring its biggest one-day
percentage gain in nearly 11 years, as stocks bounced back sharply from the
previous week's selloff, with the rebound fueled by expectations that policy
makers will move to cushion the impact of the COVID-19 outbreak on the global
economy. Expectations the Federal Reserve and other central banks will move to
ease policy were credited with helping to fuel a rebound in global equities.
However, the Paris-based Organization for Economic Cooperation and Development
forecast that the global economy would grow by 2.4% in its best case scenario,
compared with 2.9% expansion projected before the viral outbreak. The global
death toll from COVID-19 stands at more than 3,000, while health officials in
Washington state on Monday said there have been four more deaths from the
outbreak, bringing the total to six. On the economic data front, construction
spending in the US jumped by much more than expected in the month of January,
according to a report released by the Commerce Department. The Commerce
Department said construction spending surged up by 1.8 percent to an annual
rate of $1.369 trillion in January after inching up by 0.2 percent to a revised
rate of $1.346 trillion in December. Street had expected construction spending
to climb by 0.7 percent compared to the 0.2 percent dip originally reported for
the previous month. The bigger than expected spike in construction spending
reflected sharp increases in both private and public construction spending.
Meanwhile, a report released by the Institute for Supply Management (ISM)
showed US manufacturing activity saw a slight expansion in the month of
February. Dow Jones Industrial Average surged 1,293.96 or 5.09 percent points
26,703.32 Nasdaq gained 384.8 points or 4.49 percent to 8,952.17and S&P 500
was up 136.01 points or 4.6 percent to 3,090.23.
Crude oil futures ended sharply
higher with gains of over four percent on Monday on optimism that Organization
of the Petroleum Exporting Countries (OPEC) and its allies will soon announce
additional production cuts. Oil prices also found support from expectations
that global central banks are ready to support economies amid the coronavirus
outbreak. Besides, the gains also came amid volatile trade in equities, with
the Dow Jones Industrial Average gaining over 5 percent and other major indexes
rallying Monday after suffering their worst week since the financial crisis in
2008. Crude oil futures for April surged $1.99 or about 4.5 percent to settle
at $46.75 a barrel on the New York Mercantile Exchange. April Brent crude rose
$2.23 or 4.5 percent to settle at $51.90 a barrel on London's Intercontinental
Exchange.
Erasing
all of its initial gains, Indian rupee depreciated considerably for second
straight session against the US dollar on Monday, amid buying in the American
currency by banks and importers. Investor sentiments remained fragile as the
government data showing that Q3 GDP growth slowed a 7-year low of 4.7% on the
back of a continued slump in manufacturing and escalating coronavirus fears.
Some pessimism also came with a private survey showed India's factory activity
growth slowed in February from the previous month's eight-year high due to a
modest weakening in demand and output, although overall conditions remained
firm. The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS
Markit, fell to 54.5 last month from January's 55.3. The rupee's losses were
also caused by late hour sell-off in domestic equity market. On the global
front, Euro steadied on Monday after their worst weekly showing since the 2008
financial crisis, as traders swung their attention to the extra injections of
support they now expect major central banks to provide following the virus
outbreak. The last traded price of rupee was 72.73, 49 paise weaker from its
previous close of 72.24 on Friday.
The FIIs as per Monday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 12531.64 crore against gross selling of Rs 15872.49 crore,
while, in the debt segment the gross purchase was of Rs 452.36 crore with gross
sales of Rs 2717.67 crore. Besides, in the hybrid segment the gross buying was
of Rs 14.99 crore against gross selling of Rs 8.65 crore.
The US markets ended sharply
higher on Monday as investors grew optimistic that the Federal Reserve and
other central banks would soon intervene to limit the economic impact from the
spread of the novel coronavirus. Asian markets are trading in green in early
deals on Tuesday tracking overnight gains on Wall Street. Indian markets wiped
out all of their early gains and ended lower with cut of around half a percent
each on Monday after two people from Delhi and Telangana tested positive for
the coronavirus. Today, the benchmarks are likely to make flat-to-positive
start following gains in global markets. Some support will also come 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. Though, sharp rise
in crude oil prices may keep gains in check. Traders may be concerned 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 2020 on
concerns over the impact of deadly coronavirus on the domestic as well as the
global economy. There will be some cautiousness as the National Statistical
Office's (NSO) data showed that as the economy grapples with a prolonged
slowdown, close to Rs 10.52 lakh crore of the corporate debt is at the risk of
default over the next three years. Besides, the finance ministry has said that
the central GST authorities have detected evasion of Rs 70,206 crore between
July 1, 2017 launch of GST and January, 2020. There will be some buzz in the
banking stocks with report that Public Sector Banks (PSBs) may end the current
fiscal year 2019-20 on a positive note after registering a profit in the three
quarters so far. Gems and jewelry stocks will be in focus with Crisil Ratings'
report that the country's diamond exports could shrink by a fifth to $19
billion by the end of 2020-21, as the novel coronavirus (n-CoV) outbreak
amplifies sluggishness in global demand. There will be some reaction in sugar
stocks with ICRA's report that higher-than-anticipated exports and lower
production for the SY2020 (sugar year 2019-2020) season are likely to support
domestic sugar prices. On expectations of a global deficit, sugar prices have
risen from $313/MT in August 2019 to $388/MT in January 2020.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,132.75
|
10,968.33
|
11,365.08
|
BSE Sensex
|
38,144.02
|
37,592.28
|
38,889.46
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,277.51
|
31.55
|
29.05
|
34.80
|
Tata Motors
|
1,115.86
|
125.40
|
121.50
|
131.60
|
SBI
|
667.11
|
287.40
|
276.97
|
304.92
|
Vedanta
|
327.33
|
110.95
|
106.83
|
117.23
|
ICICI Bank
|
286.42
|
506.10
|
496.18
|
518.28
|
Coal India has reported rise in its production by 14.2% to 66.26 million tonnes in February 2020.
Tata Motors has reported domestic sales of 38,002 units for February 2020, as compared to 57,221 units for February 2019, posting a decline of 34%.
SBI is expecting that growth in corporate credit offtake during Q4 of 2019-20 of the bank to be in the region between five to seven per cent on year-on-year basis.
Maruti Suzuki India has reported total sales of 147,110 units in February 2020, as compared 148,682 units in February 2019, registering fall of 1.1%.