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NSE Intra-day chart (01 April 2020)
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Market Commentary 03 April 2020
Benchmarks to open marginally in red amid mixed cues from Asian peers

 

A day after logging healthy gains, Indian equity benchmarks were back in the negative territory and ended with losses of over four percent on Wednesday, as the number of domestic coronavirus cases increased even as a 21-day lockdown remained in force. Domestic stocks started the first day of the fiscal year 2020-21 on lower note, tracking bearish trend from global indices. Traders turned wary with report that the government has missed the collection target for the current financial year from CPSE disinvestment set in the Revised Estimates of Budget by about Rs 14,700 crore. Sentiments also remained dampened with a report showing that the government's fiscal deficit touched 135.2% of the full-year target at February-end mainly due to slower pace of revenue collections. The bourses extended their free fall in late hour of trade, as anxiety remained among traders with the Reserve Bank releasing data relating to India's International Investment Position (IIP) for December, which showed a marginal improvement in the ratio of foreign assets to foreign liabilities. The ratio of India's international financial assets to international financial liabilities improved to 62.1 per cent at the end of December 2019, up from 60.5 per cent in September. Traders overlooked the government data showing that eight core sector industries recorded a growth of 5.5% in February, highest in 11-months, mainly due to healthy expansion in output of coal, refinery products and electricity. Meanwhile, in order to deal with the economic disruption caused by coronavirus pandemic, the Reserve Bank of India (RBI) has unveiled further measures including extension of realisation period of export proceeds, review of Limits of Way and Means Advances of States/UTs and implementation of countercyclical capital buffer. Finally, the BSE Sensex lost 1203.18 points or 4.08% to 28,265.31, while the CNX Nifty was down by 343.95 points or 4.00% to 8,253.80.

 

The US markets ended higher on Thursday as investors appeared to focus on hope that a detente between some of the biggest oil producers on the planet might be achieved to substantially curb oil production and stabilize battered prices. Oil and oil-related stocks were the main focus of the action, briefly superseding worries about the pandemic and woeful data that highlighted the economic pain exerted by measures to mitigate the spread of the deadly virus. President Donald Trump said that he has been in contact with Saudi Arabian Crown Prince Mohammed bin Salman and he expected the Saudis and Russia to cut production by about 10 million barrels a day. The strength that emerged on markets came even though the Labor Department released a report before the start of trading showing another spike in initial jobless claims in the week ended March 28. The Labor Department said initial jobless claims skyrocketed to 6.648 million, an increase of 3.341 million from the previous week's revised level of 3.307 million. With another record-breaking increase, the number of seasonally adjusted initial claims reached the highest level in the history of the seasonally adjusted series. 

 

Crude oil future ended higher with rally of around 25% on Thursday amid hopes the price war between Saudi Arabia and Russia would end soon. President Donald Trump said that he expects Saudi Arabia and Russia to reach an agreement to significantly cut production. He expects a cutback of approximately 10 Million Barrels, and maybe substantially more. Meanwhile, Saudi Arabia said the kingdom has called for an urgent meeting of the Organization of the Petroleum Exporting Countries and its allies with the aim of reaching a fair solution to restore a desired balance of the oil markets. Crude oil futures for May surged $5.01 or 24.7 percent to settle at $25.32 a barrel on the New York Mercantile Exchange. June Brent crude gained $5.20 or 21 percent to settle at $29.94 a barrel on London's Intercontinental Exchange.

 

Indian Money market remained closed on Wednesday and Thursday on account of Annual Bank Closing and Rama Navami festival, respectively.

 

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 6405.82 crore against gross selling of Rs 10030.48 crore, while in the debt segment, the gross purchase was of Rs 937.23 crore with gross sales of Rs 2737.79 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.54 crore against gross selling of Rs 3.21 crore.

 

The US markets ended sharply higher on Thursday boosted by energy shares as oil surged after President Donald Trump said Russia and Saudi Arabia would cut production. Asian markets are trading mixed on Friday, as the economic fallout from the coronavirus pandemic continues to weigh on investors. Indian markets ended deeply in red on Wednesday as rising coronavirus cases around the world and the prospect of a global recession weighed on investors' appetite for riskier assets. Markets remain closed on Thursday on the eve of Sri Rama Navami festival. Today, the start of session is likely to be slightly negative amid mixed cues from Asian peers and sharp rise in crude oil prices overnight. Investors will be looking ahead to the Prime Minister Narendra Modi's video message at 9 am wherein the PM will speak to the nation on control of the spread of the coronavirus pandemic. The union health ministry said with 235 more people being confirmed positive for the coronavirus, the number of COVID-19 cases climbed to 2,069 and the death toll to 53 in the country on Thursday. There will be cautiousness with a private survey stating that India's manufacturing activity expanded at its slowest pace in four months in March and is likely to get worse as demand and output take a hit from the coronavirus outbreak, putting a severe dent in business optimism. The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, declined to 51.8 in March from February's 54.5, its lowest since November but still above the 50-mark that separates growth from contraction for a 32nd month. Traders will also be concerned with private report that the Income Tax department on April 1 reported a massive fall in tax collection for FY20, managing to collect Rs 9.97 lakh crore - 15% short of the revised target. There will be some reaction with Fitch Solutions' statement that India's fiscal deficit in 2020-21 may shoot up to 6.2% of the GDP from 3.5% government estimate as a fallout of the Covid-19 economic stimulus package. Also, Goods and Services Tax (GST) collections on a gross basis in March came in at Rs 97, 597 crore, an 8.4% fall over the corresponding month last year, as revenue from domestic and import transactions slumped and fewer taxpayers filed returns compared to previous months. Banking stocks will be in focus as Moody's Investors Service changed the outlook for Indian banking system to negative from stable, as it expects deterioration in banks' asset quality due to disruption in economic activity from the coronavirus outbreak. There will be some reaction in auto stocks with a private report that the country's automobile sales are down by an average 64% as all manufacturing plants have been shut since the lockdown announced on March 24. 

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

8,253.80

8,105.40

8,495.15

BSE Sensex

28,265.31

27,723.83

29,156.38

                                                 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

State Bank of India

529.54

186.55

183.03

192.28

Tata Motors

381.68

67.95

66.45

70.55

Indusind Bank

334.28

342.25

311.50

381.50

ICICI Bank

331.42

311.15

304.92

320.57

Axis Bank

277.45

358.65

348.50

374.30

 

  • Maruti Suzuki India has reported total sales of 83,792 units in March 2020, over 158,076 units sold in March 2019. 
  • SBI has given a three-month relief to borrowers under its settlement schemes and will not charge extra interest keeping in mind the COVID-19 pandemic. 
  • Hindustan Unilever has completed merger of GlaxoSmithKline Consumer Healthcare with itself, almost 15 months after the announcement of the mega deal. 
  • Coal India has produced 602.14 million tonnes of coal in FY 2019-20, missing the target of 660 MT for the year.
News Analysis