Indian markets ended lower with losses of around 13% each on Monday as investors continued to fret over the impact of the rapidly spreading coronavirus outbreak on economic growth. Today, the markets are likely to get optimistic start following gains in Asian peers. Some encouragement will come as in a bid to provide additional liquidity to the system hit by the coronavirus outbreak, the Reserve Bank of India (RBI) decided to inject Rs 1 lakh crore and assured such move further also if required. The first tranche of term repo worth Rs 50,000 crore was conducted on March 23, while the second tranche of the same amount will be conducted on March 24. Though, there may be some caution with rising coronavirus cases. India reported three Covid-19 deaths on Monday, taking the death toll to 10, while the total number of cases climbed to 499. Maharashtra and Punjab were put under statewide curfews, the rest of the country is in lockdown. Some cautiousness may come as expressing his concern on the impact of the coronavirus outbreak on Indian economy, Prime Minister Narendra Modi has said the informal sector will face the brunt and the impact on the overall economy will be felt gradually. Traders may be concerned with report that the coronavirus pandemic and the resulting lockdowns led a foreign brokerage to sharply cut India’s growth forecast for the next financial year starting April 1, to 4% from the 5.1% estimated earlier. Market participants may take note of report that former RBI governor Bimal Jalan has pitched for fiscal stimulus to mitigate the impact of coronavirus outbreak which could lower India's growth by an estimated 1 percentage point, and affect jobs. Meanwhile, the government has amended the law to get enabling powers to raise excise duty on petrol and diesel by Rs 8 per litre each in future. There will be some reaction in aviation stocks with report that India will suspend domestic passenger flights from March 24 midnight until March 31, shutting down air transport to stem the spread of the coronavirus. E-commerce stocks will be in focus with private report that the Indian e-commerce sector has come to a halt across the country including the supply of essential commodities due to various lockdowns to prevent the spread of Covid-19.
The US markets ended lower on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown. All the Asian markets are trading in green on Tuesday as the US Federal Reserve's promise of bottomless dollar funding eased painful strains in financial markets.
Back home, Indian markets saw worst fall on Monday’s trading session, with the losses of around 13 per cent each. Domestic indices made gap-down opening as the governments of world struggled to contain the fast spreading novel coronavirus (COVID-19). In India, various state governments announced lockdown in nearly 80 districts across the country as the total number of confirmed Covid-19 cases inched towards 400. Soon, Sensex hit lower circuit with losses of 10% in the first hour of session, following which the trade was suspended for a period of 45 minutes. After the trade resumed, indices witnessed well turned-out recovery. Traders took note of report that RBI will inject liquidity of Rs 30,000 crore through open market operations (OMOs) on March 24 and March 30 to maintain financial stability in the system in the wake of the coronavirus outbreak. But, markets extended their losses in the noon deals and ended deeply in red, after S&P Global Ratings cut its estimate for India's GDP growth in the fiscal starting April 1 to 5.2 per cent from its earlier estimate of 6.5 per cent, as it saw the outbreak of coronavirus costing economies around the globe. The street overlooked the retirement fund body, Employees' Provident Fund Organisation’s (EPFO) latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 10,45,379 new jobs in the month of January 2020 as against revised figure of 9,12,217 in December 2019. Finally, the BSE Sensex lost 3934.72 points or 13.15% to 25,981.24, while the CNX Nifty was down by 1135.20 points or 12.98% to 7,610.25.
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