Indian markets showed smart recovery, after hitting lowest level in early deals, and ended the volatile session in green territory with modest gains on Friday on value buying. Today, the start of new week is likely to be pessimistic tracking sell-off in the Asian peers amid coronavirus scare. As per a private report, India on Sunday reported that the number of coronavirus infections had risen to 107, an increase of 23 from the day before, with Maharashtra the worst hit. A rise in coronavirus cases is likely to further hit the market sentiment. There will be some cautiousness with Crisil’s report that credit pressures have intensified on India Inc as the coronavirus spread deepens in India and across the globe. It warned that Airlines, hotels, malls, multiplexes and restaurants will be the worst hit businesses. Investors will be also concerned as foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession. Traders will be looking ahead to the Wholesale Price Index (WPI) data to be out later in the day. Besides, the government had hiked the excise duty on petrol and diesel by Rs 3 per litre each to garner about Rs 39,000 crore additional revenue, as it repeated its 2014-15 act of not passing on gains arising from slump in international oil prices. Higher fuel prices may bring back fears of spike in inflation. Though, some respite may come later in the day with the commerce ministry’s data showing that India's exports rose for the first time in seven months in February growing by 2.91 percent to $27.65 billion. Besides, imports too grew by 2.48 percent to $37.5 billion, leaving a trade deficit of $9.85 billion as against $9.72 billion in February 2019. Traders may take note of report that traders' body CAIT has appealed to Finance Minister Nirmala Sitharaman to direct regulator IRDAI to mandate insurance firms to introduce coverage for disruptions to businesses on account of the coronavirus outbreak. There will be buzz in the tractor related companies stocks with a private report that while the entire auto segment is facing pressure, tractor segment is seeing a good traction on the backdrop of a robust rabi output and prevailing crop prices. Also, the increase in rural and agri spending by the government should augur well for the industry. Meanwhile, SBI Cards and Payments (SBI Card) is scheduled to debut on the bourses on Monday, March 16.
The US markets ended higher on Friday after a coronavirus test developed by Swiss drug giant Roche has been granted emergency use authorization by the FDA. Asian markets are trading in red in early deals on Monday as the US Federal Reserve slashed its benchmark interest rate to zero and launched a massive quantitative easing program in an emergency move on Sunday.
Back home, fabulous recovery staged over the Dalal Street on Friday’s trading session, with Sensex and Nifty ending higher by around 4%. Earlier in the day, trading on BSE and NSE was halted for 45 minutes after benchmark index Nifty fell 10% at the start of the day. But, after resumption of trading, Indian markets regained some poise. Traders took support with the government data report showing 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. Benchmarks entered in green terrain during afternoon session. Traders got relief, as the market regulator said that the Securities and Exchange Board of India (SEBI) and stock exchanges have a robust risk management framework in place which automatically gets triggered in response to movements in the indices. It also said that the framework tracks movements in BSE Sensex and NSE Nifty as well as individual stocks both in cash and derivatives market. Besides, the Reserve Bank of India’s (RBI) data showed that India's current account deficit narrowed sharply to $1.4 billion or 0.2% of GDP in the December quarter. Finally, the BSE Sensex rose 1325.34 points or 4.04% to 34103.48, while the CNX Nifty was up by 365.05 points or 3.81% to 9955.20.
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