Indian markets ended near their lowest levels in three years on Wednesday led by heavy selling in banking and finance stocks. Today, the start of session is likely to be gap-down tracking sell-off in the global markets amid COVID-19 outbreak. Traders will be concerned as the number of coronavirus cases continued to pile up. Italy reported 475 new deaths from the novel coronavirus on Wednesday- the highest single-day official toll of any nation since the first case was detected in China late last year. Besides, India reported its 151st coronavirus patient on Wednesday. There will be some cautiousness as exporters body Federation of Indian Export Organsations (FIEO) said export sector has started feeling the pinch of the outbreak of coronavirus as international buyers are asking to hold back shipments. Meanwhile, the finance ministry’s data showed that total liabilities of the government increased to Rs 93.89 lakh crore at the end of December 2019, up 3.2 percent as compared to the previous quarter. Though, Markets may take some support later in the day as the Reserve Bank of India (RBI) said it would buy Rs 10,000 crore of bonds from the secondary market to keep the market liquid, even as it infused Rs 25,000 crore of liquidity through long-term repo operations (LTRO). Meanwhile, the government is considering rate moderation for small savings schemes in the upcoming quarter, a development that could lead to speedier transmission of monetary policy rate cuts. There will be some reaction in aviation stocks with a private report that India is planning a rescue package worth as much as $1.6 billion for the aviation sector, which has been battered after the coronavirus outbreak forced countries to close borders and brought air travel to a near-halt.
The US markets ended sharply lower on Wednesday as the widening repercussions of the coronavirus pandemic threatened to cripple economic activity. Asian markets are trading deeply in red on Thursday following sharp losses on Wall Street overnight.
Back home, meltdown continued in Indian equity markets on Wednesday, with Sensex and Nifty closing lower by over 5.55% each. The start of the day was on a positive note, as a research report by 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. However, key indices soon turned negative, after 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. Bears hold their tight grip over the Dalal Street throughout the trading day, on the back of weak cues from the global markets. Market participants paid no heed towards Fitch Solutions’ latest report stating that the Reserve Bank of India (RBI) is expected to cut key interest rates by 175 basis points (bps) during the fiscal year starting April 1, up from earlier estimate of 40 bps reduction, in order to combat the economic shock from the coronavirus outbreak. As per Fitch Solutions, India's real GDP growth is likely to pick up slightly to 5.4 per cent in 2020-21, from its estimate of 4.9 per cent in the current fiscal. Finally, the BSE Sensex slipped 1709.58 points or 5.59% to 28,869.51, while the CNX Nifty was down by 498.25 points or 5.56% to 8,468.80.
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