Indian markets closed sharply lower on Tuesday amid worries that the coronavirus pandemic will tip the global economy into recession. Today, the benchmarks are likely to get flat-to-positive start amid gains in global markets. Some support will come with the Reserve Bank of India’s (RBI) report that overseas investment by domestic firms stood at $2.37 billion in February 2020. In the year-ago same period, companies in India invested $2.36 billion. Traders may take note of report that the Reserve Bank of India (RBI) has reduced the capital requirements for payment aggregators to Rs 15 crore at the time of application for the license from Rs 100 crore proposed earlier. Besides, a research report by the State Bank of India stated that a combination of monetary as well as fiscal policy measures are called for to salvage the economy from the collateral damage from the fallout of the spread of coronavirus disease-COVID-19. Though, there may be some cautiousness amid worries over coronavirus outbreak. According to the health ministry, the number of novel coronavirus cases in India rose to 139 so far, while one more person died taking the death toll to three. Also, traders will be concerned as S&P Global Ratings lowered India's economic growth forecast to 5.2% for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. Meanwhile, markets regulator Securities & Exchange Board of India (SEBI) asked merchant bankers to provide to investors an updated copy of the 'General Information Document' for public issues, having information about UPI mechanism and the reduced timeline for IPOs. Metal stocks will be in focus with private report that the spread of coronavirus, coupled with rising threats of cheap imports from China, Japan and South Korea, has kept the lid on domestic steel prices and forced producers to consider pruning production in the short term, amid subdued demand. There will be some reaction in e-commerce sector stocks as the Centre said that it has proposed certain amendments to the Competition law for greater regulation of e-commerce platforms and ensure that presence of etailers has no severe impact on local jobs.
The US markets ended higher on Tuesday as the White House and Federal Reserve unveiled massive stimulus measures to help the economy deal with the coronavirus pandemic. Asian markets are trading mostly higher in nearly on Wednesday following positive cues from Wall Street overnight.
Back home, Dalal Street got hit by another day of steep losses on Tuesday, as Sensex & Nifty settled down by around 2.5% each. Markets started on a cautious note, amid Care Ratings’ report 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. But, indices soon staged recovery to remain in green for the most part of the session, aided with RBI Governor Shaktikanta Das’ statement that RBI has many provisions to provide cushion to the sagging economy, however, that will completely depend on the circumstances. The RBI has announced two key measures that the central bank will take to improve the liquidity condition of the Indian economy and financial markets. But, key benchmarks failed to hold their gains in last hour of the trade and ended in red terrain, on the back of weak cues from the global markets. Traders remained worried with Minister of State for Finance Anurag Thakur’s statement that India's near-term macroeconomic outlook is vulnerable to disruption of trade with China on account of coronavirus outbreak. The coronavirus outbreak, first in China and now having being confirmed in more than 100 countries, has emerged as a key risk to human health as well as global growth outlook through numerous channels like trade, production and supply chain disruptions as well as decline in demand. Finally, the BSE Sensex slipped 810.98 points or 2.58% to 30579.09, while the CNX Nifty was down by 230.35 points or 2.50% to 8967.05.
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