Indian markets ended considerably lower on Monday, with cut of over a percent each, following Asian peers, amid decline in banking and metal stocks. Today, the start of session is likely to be negative following a global selloff as investors remain concerned over coronavirus spreading across the world. There will be some cautiousness as a SEBI-appointed panel proposed sweeping changes to strengthen the monitoring and enforcement of norms pertaining to related party transactions. However, some support may come later in the day as the government is planning to raise at least Rs 10,000 crore through the seventh tranche of CPSE ETF which will open for anchor investors on Thursday. Besides, Commerce and industry Minister Piyush Goyal has suggested the Brazilian side to reconstitute and activate India-Brazil Business Leaders Forum to boost economic ties between the two countries. Meanwhile, India pressed its largest LNG supplier Qatar to lower the price of gas under the existing long-term supply contracts, a request that Doha turned down saying sanctity of contracts is important for the credibility of both sides. Logistic stocks will be in focus with report that the government may consider announcement of national logistics policy to promote seamless movement of goods across the country in the forthcoming Budget. There will be some reaction in banking stocks with the Reserve Bank of India’s (RBI) data showing that urban cooperative banks (UCBs) have reported nearly 1,000 cases of fraud worth more than Rs 220 crore in the last five fiscals. The central bank said a total of 181 fraud cases involving Rs 127.7 crore were noticed during 2018-19. There will be lots of earnings reaction, especially in banking sector, to keep the markets buzzing.
The US markets ended sharply lower on Monday as investors grappled with fresh worries about the spread of a new virus in China that threatens global economic growth. Asian markets are trading mostly in red on Tuesday as China took more drastic steps to combat the coronavirus.
Back home, Indian equity benchmarks witnessed a bloodbath on Monday's trading session by falling over a percent. After a weak start, markets remained under a grip of bears for the whole day, amid a private report indicating that the country's fiscal deficit for 2019-20 is expected to widen to 3.8% and the upcoming Budget may set a target of 3.5% for 2020-21. Some concerns also came with a report stating that India plans to increase import duties on more than 50 items including electronics, electrical goods, chemicals and handicrafts, targeting about $56 billion worth of imports from China and elsewhere. In the last leg of the trade, losses got extended on the streets, as Nobel laureate and economist Abhijit Banerjee said that the banking sector in the country is stressed and the government is in no position to bail it out. He said the demand slowdown in the automobile sector also shows that people are lacking confidence in the economy. Market participants paid no heed towards the Reserve bank of India (RBI) Governor Shaktikanta Das’ statement that structural reforms and fiscal measures may have to be continued and further activated to provide a durable push to demand and boost growth. Finally, the BSE Sensex slipped 458.07 points or 1.10% to 41,155.12, while the CNX Nifty was down by 129.25 points or 1.06% to 12,119.00.
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