Markets pare some gains in early noon session

The local equity markets have pared some of their gains, but still trading in positive terrain in early noon session, amid report of third death in India due to novel coronavirus today, as a 64-year-old patient with COVID-19 infection passed away in Mumbai. Traders were seen in buying position for Power, Metal and Energy stocks, while selling was witnessed in IT, Bankex and TECK stocks. Markets took some solace as RBI announced another round of $2 billion dollar-rupee swap on March 23, and RBI will continue to conduct the long-term repo operations (LTROs) of up to Rs 1 lakh crore as and when the market needs it. However, upside remain capped as Care Ratings in its latest survey report stated that corporate India is expecting a 0.5% hit on economic growth in FY2020-21 if the coronavirus pandemic lasts longer, pushing up fiscal deficit and creating more bad loans for the bank.

On the global front, Asian Markets were trading mostly lower; followed by the overnight crash on Wall Street amid fears on COVID-19 pandemic. Back home, stocks related Private Laboratory edged higher as government allowed the use of accredited private labs for testing for coronavirus infections.

The BSE Sensex is currently trading at 31554.59, up by 164.52 points or 0.52% after trading in a range of 30745.19 and 32047.98. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.13%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were Power up by 3.29%, Metal up by 2.92%, Energy up by 2.55%, FMCG up by 2.49% and PSU was up by 2.49%, while IT down by 0.35%, Bankex down by 0.34%, TECK down by 0.32%, Consumer Durables down by 0.31% and Realty was down by 0.31% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 5.41%, Sun Pharma up by 4.93%, Hindustan Unilever up by 4.45%, ITC up by 3.77% and Asian Paints was up by 3.44%. On the flip side, Kotak Mahindra Bank down by 2.53%, Infosys down by 1.98%, ICICI Bank down by 1.86%, HDFC Bank down by 1.58% and Bajaj Auto was down by 0.82% were the top losers.

Meanwhile, in bid to secure adequate liquidity to the troubled financial markets, RBI governor Shaktikanta Das has said that the central bank will conduct the fifth tranche of the long-term repo operations (LTROs) for Rs 25,000 crore on March 18. The issue will have a three-year tenor. The RBI has already conducted four rounds worth Rs 1 lakh crore since February 14 with huge success as the issue has been overbought multiple times. The RBI said based on further review of evolving liquidity conditions, more LTROs will be announced separately. 

Das also announced the details of the second dollar-rupee swap for $2 billion on March 23. Taking into consideration the requirement of US dollars in the market, it has been decided to undertake another 6-month dollar sell/buy swap auction to provide liquidity to the forex market for $2 billion. The first such swap was conducted on March 16 for $2 billion and both the measures are to shore up liquidity which even though is huge surplus to the tune of Rs 3 lakh on a daily basis.

RBI governor has stated that it is important to ensure that policy actions and policy reactions are carefully considered and calibrated so as to assuage sentiment and instill confidence. In this context, the Reserve Bank has been taking several calibrated measures over the past few days to ensure that financial markets and institutions remain sound and resilient and also to build confidence more generally in the financial system.

The CNX Nifty is currently trading at 9260.50, up by 63.10 points or 0.69% after trading in a range of 9016.85 and 9403.80. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 55.80%, Adani Ports &Special up by 5.39%, Power Grid Corporation up by 5.38%, Coal India up by 5.35% and Sun Pharma was up by 5.05%. On the flip side, Zee Entertainment down by 10.79%, Bharti Infratel down by 3.72%, Kotak Mahindra Bank down by 2.45%, Infosys down by 1.94% and ICICI Bank was down by 1.76% were the top losers.

Most of the Asian Markets were trading lower; KOSPI fell 47.03 points or 2.74% to 1,667.83, Taiwan Weighted dropped 277.48 points or 2.86% to 9,440.29, Hang Seng decreased 33.43 points or 0.14% to 23,030.14, Straits Times trembled 31.04 points or 1.24% to 2,464.73, Shanghai Composite declined 23.25 points or 0.83% to 2,766.00 and Jakarta Composite was down by 195.97 points or 4.18% to 4,494.69. On the other hand, Nikkei 225 was up by 30.29 points or 0.18% to 17,032.33.