Markets to make negative start of F&O expiry session

Indian markets ended lower for fourth straight session on Wednesday amid renewed worries about the economic impact of the coronavirus outbreak. Today, the start of the F&O series expiry session is likely to be negative as global markets extended losses over concerns that the coronavirus outbreak is turning into a pandemic. There will be some cautiousness with a private report that the Gross Domestic Product (GDP) growth will stay flat at 4.5 per cent in the October-December 2019. It also said that India faces the risk of getting impacted by coronavirus epidemic economically because of its high reliance on Chinese imports for various goods. Though, fall in crude oil prices overnight may support the domestic markets. Some support may also come with Finance Minister Nirmala Sitharaman’s statement that the government is keeping a close watch on the impact of the coronavirus outbreak on the Indian economy. Traders may take note of a private report that notwithstanding a slowdown in consumption due to the sluggish economy, the Indian retail market is estimated to reach $1.3 trillion by 2025, helped by multiple structural, socio demographic and economic drivers. Meanwhile, the Reserve Bank of India said that all new floating rate loans given to medium enterprises will be linked with external benchmarks from April 1. The move is aimed at further strengthening monetary policy transmission so that benefits of reduction in key lending rate (repo) can be passed on to medium enterprises also. There will be some buzz in the textile stocks as the Union Cabinet approved the National Technical Textiles Mission with an outlay of Rs 1,480 crore to position India as a leading manufacturer of technical fabrics that are mostly used in industrial applications. Auto stocks will be in focus with Moody's Investors Service’s report that car sales in India are expected to be relatively flat this year after plunging 11.8 per cent in 2019 amid slowing economic growth. There will be some reaction in banking stocks with Finance Minister Nirmala Sitharaman’s statement that there is no uncertainty related to the merger of Public Sector Banks (PSBs).

The US markets ended mostly lower on Wednesday as investors continued to weigh the fast-spreading coronavirus and its impact on the economy. Asian markets are trading in red in early deals on Thursday, struggling to find a footing as the rapid global spread of the coronavirus left investors on edge and seeking safety in gold and bonds.

Back home, Indian equity benchmarks continued to fall for the fourth straight day on Wednesday, with Sensex and Nifty ending lower by around a percent. The start of the day was lackluster as Care Ratings in its latest report projected India’s Gross Domestic Product (GDP) growth at 4.5% for the third quarter (Q3) of current fiscal year (FY20), which is lower than 6.6% GDP growth recorded in the corresponding period a year ago. Adding more worries among market participants, the payroll data of the Employees’ State Insurance Corporation (ESIC) showed that around 12.67 lakh jobs were created in December 2019 lower against 14.59 lakh in the previous month. In the last leg of the trade, markets fell sharply to settle near day’s low points, after Moody's Analytics said that a global recession is likely if coronavirus becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea. Traders overlooked former NITI Aayog Vice Chairman Arvind Panagariya’s statement that India's slowdown has bottomed out and now its economy needs to be opened up if the country wants to realise the ambition of a 10 per cent growth rate. He said in the next fiscal year, India's GDP growth is expected to be 6 per cent and then it will get back to 7-8 per cent which has been the case in the last 15-16 year period. Finally, the BSE Sensex slipped 392.24 points or 0.97% to 39,888.96, while the CNX Nifty was down by 119.40 points or 1.01% to 11,678.50.