Markets likely to get optimistic start of new month

India markets crashed, for sixth straight session, on Friday, tracking global markets meltdown as economies worldwide struggle in battling the Coronavirus pandemic. Today, the start of new month is likely to be optimistic tracking positive cues from Asian peers and ahead of India Manufacturing PMI numbers for February slated to be released later in the day. Traders will be getting some encouragement 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. Some support also came in with report that the output of eight core sectors of the economy managed to rise for a second straight month in January, growing by 2.2% as key sectors like refinery products and electricity continued to see slow growth. Also, the Reserve Bank of India’s (RBI) data showed that India's foreign exchange reserves inched up by $29 million to a fresh lifetime high of $476.122 billion in the week to February 21, aided by an increase in the value of gold holdings. Market participants may take note of industry body Assocham’s statement that with the Chinese economy getting impacted due to the coronavirus outbreak, India can push its exports in the global markets to fill up the space vacated by the neighbouring country. Though, some cautiousness may crept in as Q3 GDP growth slowed a 7-year low of 4.7% on the back of a continued slump in manufacturing and escalating coronavirus fears. The GDP growth for the December quarter is the lowest since January-March of 2012-13 when it stood at 4.3%. Also, the Controller General of Accounts (CGA) said India's fiscal deficit touched 128.5% of the whole year budget target at January-end. Traders may also be concerned with report that overseas investors invested only Rs 6,554 crore in Indian markets on net basis in February, as they adopted a cautious stance amid coronavirus scare, subdued economic data and disappointing corporate earnings. There will be some buzz in the banking stocks with report that in a bid to address weaknesses in cooperative banking sector, the Parliament is likely to clear a Bill to amend Banking Regulation Act to bring multi-state cooperative banks under effective regulation of RBI during the Budget session. Steel stocks will be in focus as the World Steel Association (worldsteel) in its latest report stated that India's crude steel production registered a decline of 3.26 per cent to 9.288 million tonnes (MT) in January this year. The auto sector stocks will also be in action, reacting to their monthly sales numbers. Besides, SBI Cards and Payment Services’ initial public offer (IPO) will hit the primary market with a Rs 10,350 crore initial public offering today.

The US markets ended mostly in red on Friday as fears escalated over the fast-spreading coronavirus. Asian markets are trading mostly higher in early deals on Monday as markets are recovering after the novel coronavirus outbreak sent stocks into a downward spiral last week.

Back home, looming coronavirus fears pushed Indian equity markets deeper into red on Friday. Indices made a weak start, impacted by the Association of Indian Forging Industry’s statement that disruption in supplies due to the coronavirus outbreak in China has hit domestic forging industry along with automobile and auto component manufacturing sectors. Sentiments remained down, amid a private report that coronavirus outbreak could cause a dent to the recovery of the Indian economy amid supply chain disruptions and inflationary pressures. The report also said that manufacturing companies could face production disruptions if the length of the outbreak gets prolonged and their supply chain is not restored to normalcy. Markets continued to hit with huge losses during the whole trading day, as Industry body PHDCCI said that the coronavirus outbreak may negatively impact global growth by 30 basis points or $250 billion. It said disruptions in the global supply chains will not only hit China's exports but also the exports of the importing countries as they import a large chunk of raw materials and intermediate goods from China while exporting to other respective destinations. The street remained cautious, even after Union Finance Minister Nirmala Sitharaman asserted that the anti-CAA protests and the recent violence in Delhi have not dampened the spirit of investors. Finally, the BSE Sensex slipped 1448.37 points or 3.64% to 38,297.29, while the CNX Nifty was down by 431.55 points or 3.71% to 11,201.75.