Markets to get flat-to-negative start of F&O expiry session

Indian markets ended sharply higher on Wednesday, with gains of around 7% each, as they joined the rally in the global markets, shrugging off concerns surrounding the impact of 21-day nationwide lockdown on the economy. Today, the markets are likely to get flat-to-negative start amid mixed cues from global markets. There will be some volatility in the markets due to the expiry of the Futures and Options (F&O) contracts for the month of March. Also, there will be some cautiousness with Care Ratings’ report that if the 21-day long national lockdown leads to 80 per cent production loss, the economy will take a hit of Rs 35,000-40,000 crore on a daily basis, shaving off Rs 6.3-7.2 trillion cumulatively. It added that Q4 growth may not be negative but can go down to 1.5-2.5%. The economy was slated to grow by Rs 1.74 lakh crore in Q4 or by 4.7%. though, some support may come later in the day with a private report that the government is likely to agree an economic stimulus package of more than Rs 1.5 trillion ($19.6 billion) to fight a downturn in the country that is currently locked down to stem the spread of coronavirus. Besides, , the government has decided to increase monthly quota of subsidized foodgrains by 2 kg to 7kg per person through ration shops for 80 crore beneficiaries to ensure sufficient supply during the lockdown. There will be some buzz in the metal stocks as World Steel Association (worldsteel) in its latest report stated that India’s crude steel output increased by 1.5% to 9.56 million tonnes (MT) in February this year. The country had produced 9.42 MT steel in the same month a year ago. Oil industry stocks will be in focus as the oil ministry’s data showed that crude oil production at 2.39 million tonnes in February was 6.41% lower than 2.56 million tonnes output in the same month a year back. There will be some reaction in aviation stocks with aviation consultancy CAPA India’s report that Indian aviation sector is projected to incur a staggering $3.3-3.6 billion loss in the first quarter of the next financial year if flight services remain grounded till June-end.

The US markets ended mostly higher on Wednesday amid a dispute between Senator Bernie Sanders, I-Vt., and several Republican Senators that could delay a massive stimulus package. Asian markets are trading mostly in red on Thursday as investors are awaiting the passage and details of a $2 trillion stimulus package in the United States to combat the economic fallout from the coronavirus.

Back home, Indian equity benchmarks ended Wednesday’s trade on high note that marked a second straight day of gain for the markets, tracking bullish trend from global key indices as authorities world over stepped up efforts to fight the pandemic. Sensex ended above 28,500 Mark, while Nifty reclaimed 8,300 Mark. Key indices witnessed a fluctuating trade in the morning session, as Prime Minister Narendra Modi announced a complete lockdown of the country for 21 days to curb the spread of the deadly coronavirus pandemic that will have a bearing on businesses across the country. However, markets changed their gear in afternoon session and gained steadily, taking support Finance Minister Nirmala Sitharaman’s statement where she extended the deadline for filing tax returns by three months beyond March 31. She also announced a slew of regulatory and compliance measures across sectors to alleviate the hardships being faced by various businesses. Markets continued their strong bullish momentum in late trade, as Securities and Exchange Board of India (SEBI) in its latest data showed that investments through participatory notes (P-notes) in the domestic capital market rose to Rs 68,862 crore at the end of February 2020, making it the second consecutive monthly increase. Domestic sentiments were also buoyed with Union Food Minister Ram Vilas Paswan’s statement that the government is monitoring the availability of essential commodities in the market amid nationwide lockdown for next 21 days to check the spread of coronavirus outbreak. He also warned manufacturers and traders against profiteering during this period. Finally, the BSE Sensex gained 1861.75 points or 6.98% to 28,535.78, while the CNX Nifty was up by 516.80 points or 6.62% to 8317.85.