Markets to extend last session’s losses with gap-down opening

Indian markets ended lower with losses of over 8% each on Thursday following a meltdown in global markets after the World Health Organization (WHO) termed the coronavirus outbreak as a pandemic. Today, the markets are likely to extend previous session’s southward journey with yet another gap-down opening amid a rout on global equity markets amid rising worries over the spread of coronavirus across the world. As per a private report, India, on March 12, reported its first Coronavirus-linked death with the number of positive cases soaring to 78. There will some cautiousness with report that the government is likely to fall short of its revenue collection estimates in the current fiscal and may face challenges meeting the same in the next as the coronavirus pandemic slows down demand and economic activity. There will be also some concern as a private investment bank sharply cut its 2020-21 GDP growth forecast for India to 5.1% on fears around the coronavirus outbreak and also weak credit growth domestically. Though, some respite may come later in the day with optimistic macro-economic data on the domestic front. The government data showed that retail inflation dropped for the first time after six months in February, easing to 6.58% as prices of vegetables and other kitchen items cooled. Also, India's industrial output grew 2% in January against a contraction of 0.3% in December. Some support may also come with the Reserve Bank of India’s (RBI) data showing that India's current account deficit narrowed sharply to $1.4 billion or 0.2% of GDP in the December quarter. Traders may take note of report that given the coronavirus pandemic and the resultant bloodbath in global markets, including in the country, and plunging asset prices, the RBI will begin to look beyond inflation and start easing rates to the tune of 65 basis points (bps) by June. Aviation stocks will be in focus as the civil Aviation ministry of India is in talks with domestic airlines to waive cancellation charge for flights which will be affected by the ongoing coronavirus situation.

The US markets settled in red on Thursday with investors spooked that emergency fiscal and monetary packages won’t be enough to stave off a recession. Asian markets are trading deeply in red on Friday following sell-off overnight on Wall Street over mounting recession fears linked to the coronavirus outbreak.

Back home, Indian equity benchmarks witnessed bloodbath on Thursday as coronavirus woes deteriorated sentiments after the World Health Organization (WHO) declared coronavirus as a global pandemic. After a lackluster opening of the day, key indices remained under pressure, on the back of Department-Related Parliamentary Standing Committee on Commerce's statement that the FDI equity inflow in manufacturing is declining and the sector's share in the total FDI inflow in 2018-19 was around 23% which is very low. It said the low inflow of FDI in the manufacturing sector defeats the very purpose of Make in India scheme. Bears held their tight grip over the Dalal Street throughout the trading session, tracking negative global markets. Markets participants remained pessimistic, amid a private report stating that only 15% of business executives worldwide have confidence in their company's own top leadership to successfully manage disruption - including unexpected events like pandemics, technological advances, shifting demographics and climate change. This lack of confidence is striking since 95% of executives also believe that managing disruption well is now critical for companies to succeed in turbulent times. Finally, the BSE Sensex lost 2919.26 points or 8.18% to 32,778.14, while the CNX Nifty was down by 868.25 points or 8.30% to 9,590.15.