Sensex, Nifty to make pessimistic start on Wednesday

Indian markets ended sharply lower on Monday amid a global selloff as panic over the economic fallout of the coronavirus outbreak intensified. Markets were closed on Tuesday on account of Holi festival. Today, the markets are likely to get pessimistic start amid rise in crude oil prices overnight and mixed cues from Asian peers. Also, concerns over economic growth of India may weighted on the local indices as Moody’s Investors Service cut its growth forecast for India to 5.3 per cent for 2020 from 5.4 per cent estimated earlier, as it expects the coronavirus outbreak to dampen domestic demand globally. Besides, as per a private report, the number of Coronavirus victims in India crossed 61 after Kerala, Maharashtra and Karnataka reported 14 new cases on Tuesday. There will be some cautiousness with domestic rating agency ICRA’s report that investors have total bets of over Rs 93,000 crore on the additional tier-I bonds in Indian banks and a complete write-down proposed in the Yes Bank restructuring may lead to risk aversion. Meanwhile, Finance Minister Nirmala Sitharaman will hold meeting with chief executives of amalgamating banks on March 12 to review preparedness for the merger beginning April 1. Earlier this month, the Union Cabinet headed by Prime Minister Narendra Modi approved consolidation of 10 state-owned banks into four. There will be some buzz in the telecom stocks with a private report that a rescue package for stressed telecom companies may be cleared by the Union Cabinet later this week and could include a staggered payment schedule for the outstanding AGR (adjusted gross revenue) dues. Relief on the licence fee front may also come up for review as the government takes stock of measures aimed at nursing the telecom industry back to health. Coal sector stocks will be in focus with a private report that India's thermal coal imports rose 12.6 percent to nearly 200 million tonnes in 2019, reflecting the second straight year of growth in shipments of the fuel despite attempts by the government to cut imports.

The US markets ended higher on Tuesday on bargain-hunting and hopes of government stimulus calmed investors’ fears surrounding the coronavirus and growing signs of imminent recession. Asian markets are trading mixed in early deals on Wednesday as growing skepticism about Washington’s stimulus package to fight the coronavirus outbreak knocked the steam out of an earlier rally.

Back home, Monday turned out to be a worst day for Indian equity bourses, with Sensex & Nifty losing around 5% each. Indices made a weak start, after Moody's said that the coronavirus has increased the risk of a global recession this year. It added that advanced economies including the United States, Japan, Germany, Italy, France, Britain and Korea could all fall into recession in an adverse scenario. Some concerns came with a report that snapping their six-month buying streak, FPIs pulled out a net Rs 13,157 crore from the Indian capital markets in the first five trading sessions of March as the coronavirus outbreak spooked investors’ sentiment. Bears hold their tight grip over Dalal Street for the whole day, with MSME Minister Nitin Gadkari’s statement that it is not easy for entrepreneurs to avail bank loans, and there is a need to encourage those who have a good track record to boost entrepreneurship. Recently, Gadkari met bank chiefs along with Finance Minister Nirmala Sitharaman and discussed issues in extending finance to micro, small and medium enterprises (MSME) sector. Besides, Asian Development Bank said that the coronavirus outbreak has the potential to significantly harm the Asian economies, and the global economy may suffer losses of $77-347 billion. Finally, the BSE Sensex lost 1941.67 points or 5.17% to 35,634.95, while the CNX Nifty was down by 538.00 points or 4.90% to 10,451.45.