Benchmarks to make gap-down opening amid global sell-off

Indian markets erased most of their gains and ended flat on Thursday as fears that coronavirus could disrupt global economic growth haunted investors. Today, the benchmarks are likely to make gap-down opening tracking sell-off in the global markets on growth concerns amid coronavirus outbreak. The flu-like virus has now spread to nearly 80 countries, infecting more than 95,000 people. In India, the number of confirmed cases stands at 30. There will be some cautiousness with S&P Global Ratings’ report that a fast spreading coronavirus outbreak could knock $211 billion off the combined economies of the Asia-Pacific, with Japan, Hong Kong, Singapore and Australia among the most exposed. S&P did not cut growth forecasts for emerging markets of Indonesia, Malaysia, the Philippines and India, citing the fact that reported infections in those countries were still low. Though, some support may come with a private report that the 50bps of Reserve Bank of India (RBI) rate cuts in 2020 after the FOMC cut 50bps. Besides, Governor Das has said that we are ready for a response should the situation warrant. Traders may take note of another private report that despite rising geopolitical tensions, slow growth forecasts and uncertainty remaining the norm in 2019, 51% of the Ultra-wealthy Indians experienced an increase in their fortune. Meanwhile, the Securities and Exchange Board of India (SEBI) has proposed to overhaul the e-voting process, which shareholders use to approve resolutions floated by listed companies. Steel stocks will be in focus with ICRA’s statement that after witnessing uptrend, domestic steel prices are expected to come under pressure in near-term due to the outbreak of deadly coronavirus.

The US markets ended sharply lower on Thursday as fears grew over the spread of the coronavirus in the US. Asian markets are trading deeply in red on Friday following another Wall Street rout as disruptions to global business from the coronavirus beyond China worsened, stoking fears of a prolonged world economic slowdown.

Back home, Indian equity bourses off day’s high on Thursday and settled the session marginally higher. After a firm start, indices traded in green, aided with Reserve Bank of India (RBI) governor’s statement that he’s ready to act to shield the economy from the coronavirus and reiterated there’s room to cut interest rates if needed. He added that for India, options include a rate cut and supporting the market through liquidity measures. Gains extended in noon deals, after Finance Minister Nirmala Sitharaman said that the government is working intensively to ensure meaningful intervention, if needed, to deal with the impact of unfolding coronavirus crisis on the country. But, in the last leg of the trading session, key benchmarks pared most of their gains, as domestic sentiments got hit after, United Nations Conference on Trade and Development (UNCTAD) in its latest report said that the trade impact of the coronavirus epidemic for India is estimated to be about 348 million dollars and the country figures among the top 15 economies most affected as slowdown of manufacturing in China disrupts world trade. Adding more worries among traders, IMF chief Kristalina Georgieva said that the new coronavirus epidemic poses a serious threat and will slow growth in the world economy to below the 2.9 per cent posted last year. Finally, the BSE Sensex gained 61.13 points or 0.16% to 38,470.61, while the CNX Nifty was up by 18.00 points or 0.16% to 11269.00.