Meltdown continued in Indian equity markets on Wednesday, with Sensex and Nifty closing lower by over 5.55% each. The start of the day was on a positive note, as a research report by State Bank of India stated that a combination of monetary as well as fiscal policy measures are called for to salvage the economy from the collateral damage from the fallout of the spread of coronavirus disease-COVID-19. However, key indices soon turned negative, after S&P Global Ratings lowered India's economic growth forecast to 5.2% for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. Bears hold their tight grip over the Dalal Street throughout the trading day, on the back of weak cues from the global markets. Market participants paid no heed towards Fitch Solutions' latest report stating that the Reserve Bank of India (RBI) is expected to cut key interest rates by 175 basis points (bps) during the fiscal year starting April 1, up from earlier estimate of 40 bps reduction, in order to combat the economic shock from the coronavirus outbreak. As per Fitch Solutions, India's real GDP growth is likely to pick up slightly to 5.4 per cent in 2020-21, from its estimate of 4.9 per cent in the current fiscal. Finally, the BSE Sensex slipped 1709.58 points or 5.59% to 28,869.51, while the CNX Nifty was down by 498.25 points or 5.56% to 8,468.80.

The US markets ended lower on Wednesday, with the Dow Jones Industrial Average finishing below the psychologically important 20,000 level for the first time since February 2017, as investors continued to dump equities and other assets on worries over the economic impact of the global COVID-19 pandemic. Trading was briefly suspended after a circuit breaker was tripped up. A circuit breaker halts trading across the US stock exchanges for 15 minutes and is meant to ensure orderly market behavior. Wednesday marked the fourth time in a week that a circuit breaker was triggered. Meanwhile, the number of confirmed US coronavirus cases has jumped to more than 6,400, while the death count has broken above 100. Substantial weakness was visible among housing stocks, as reflected by the 12.6 percent nosedive by the Philadelphia Housing Sector Index. Energy, steel, semiconductor and banking stocks also saw considerable weakness on the day, moving sharply lower along with the other major sectors. Further, Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 13.6 percent. The sell-off by gold stocks came amid a steep drop by the price of the precious metal, as gold for April delivery plunged $47.90 to $1,477.90 an ounce.  However, markets came off their lows in the final minutes of trading after the Senate obtained the votes to pass a coronavirus relief plan to expand paid leave. 

Crude oil futures ended to their lowest level in about 18 years on Wednesday as countries continued to lock down to slow the spread of the COVID-19 pandemic, while Saudi Arabia and Russia remain on track to flood the world with crude in a global price war. Besides, Oil prices lost more ground after data from the Energy Information Administration (EIA) revealed an eighth consecutive weekly rise in US crude supplies. US crude supplies rose by 2 million barrels for the week ended March 13. However, the EIA data showed supply declines of 6.2 million barrels for gasoline and 2.9 million barrels for distillates. Crude oil futures for April plunged $6.58 or 24 percent to settle at $20.37 a barrel on the New York Mercantile Exchange. May Brent crude fell $3.85 or 13 percent to settle at $24.88 a barrel on London's Intercontinental Exchange.

Indian rupee pared most of its early losses but still weakened marginally against the American currency on Wednesday, due to fresh dollar demand from banks and importers. Investor sentiment remained fragile amid concerns over the impact of coronavirus. Some concern also came as S&P Global Ratings lowered India's economic growth forecast to 5.2% for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. However, traders took some support with Fitch Solutions' report that it expects the Reserve Bank of India to cut key interest rates by 175 basis points during the fiscal year starting April 1, up from earlier estimate of 40 bps reduction, to combat the economic shock from the coronavirus outbreak. It also forecast India's real GDP growth to pick up slightly to 5.4 percent in 2020-21, from its estimate of 4.9 percent in the current fiscal. On the global front, dollar extended its gains on Wednesday and hit new multi-year highs against both the Australian and New Zealand dollars, as companies and investors worried by the coronavirus outbreak rushed to the world's most liquid currency. The last traded price of rupee was 74.26, 2 paise weaker from its previous close of 74.24 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 7047.88 crore against gross selling of Rs 10710.84 crore, while in the debt segment, the gross purchase was of Rs 722.68 crore with gross sales of Rs 8894.46 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.92 crore against gross selling of Rs 13.41 crore.

The US markets ended sharply lower on Wednesday as the widening repercussions of the coronavirus pandemic threatened to cripple economic activity. Asian markets are trading deeply in red on Thursday following sharp losses on Wall Street overnight. Indian markets ended near their lowest levels in three years on Wednesday led by heavy selling in banking and finance stocks. Today, the start of session is likely to be gap-down tracking sell-off in the global markets amid COVID-19 outbreak. Traders will be concerned as the number of coronavirus cases continued to pile up. Italy reported 475 new deaths from the novel coronavirus on Wednesday- the highest single-day official toll of any nation since the first case was detected in China late last year. Besides, India reported its 151st coronavirus patient on Wednesday. There will be some cautiousness as exporters body Federation of Indian Export Organsations (FIEO) said export sector has started feeling the pinch of the outbreak of coronavirus as international buyers are asking to hold back shipments. Meanwhile, the finance ministry's data showed that total liabilities of the government increased to Rs 93.89 lakh crore at the end of December 2019, up 3.2 percent as compared to the previous quarter. Though, Markets may take some support later in the day as the Reserve Bank of India (RBI) said it would buy Rs 10,000 crore of bonds from the secondary market to keep the market liquid, even as it infused Rs 25,000 crore of liquidity through long-term repo operations (LTRO). Meanwhile, the government is considering rate moderation for small savings schemes in the upcoming quarter, a development that could lead to speedier transmission of monetary policy rate cuts. There will be some reaction in aviation stocks with a private report that India is planning a rescue package worth as much as $1.6 billion for the aviation sector, which has been battered after the coronavirus outbreak forced countries to close borders and brought air travel to a near-halt. 

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

Nifty Top volumes

• M&M has signed an agreement for subscribing to around 5% of the share capital of Eurl LD Azouaou, Algeria. 
• SBI has acquired over 6.82 percent stake in Zero Mass in a share transfer purchase agreement. 
• ICICI Bank has acquired 7.97 percent stake in Yes Bank through its Rs 1,000 crore capital infusion in the troubled private sector lender. 
• TCS has launched the Business Ecosystem Integration Services suite, to help businesses integrate with larger ecosystems and create new customer-centric, augmented offerings.