Benchmarks to get gap-up opening following firm global cues

Indian markets ended deeply in red on Monday as the number of coronavirus infections in the country showed no signs of slowing in spite of a nationwide lockdown. Today, the start of last trading session of fiscal year 2019-20 (FY20) is likely to be gap-up following rebound in the global markets. Some support will come with report that the government has put off implementation of the uniform stamp duty on transfer of shares, debentures, futures, options, currency and other capital market instruments to July 1, 2020. Also, some support will come as in line with the Budget announcement, the Reserve Bank opened certain specified categories of government securities (g-secs) for non-resident investors as part of an initiative to deepen the bond market. Traders may take note of report that the government has budgeted a total of Rs 42,000 crore towards disaster relief in the FY21 budget. From April onwards, these budget lines will be available to states to fight against COVID-19 among other calamities. Though, there may be some concern amid fast spreading coronavirus. India’s cumulative coronavirus infections have reached 1,251, registering the highest single-day increase of 227 cases on March 30, while the death toll rose to 32. Also, there may be some caution as Fitch Solutions slashed its estimate for India’s GDP growth in the fiscal starting April 1 (FY21) to 4.6% due to weaker private consumption and contraction in investment amid coronavirus outbreak, costing economies around the globe. Traders will be cautious as domestic credit rating agency India Ratings (Ind-Ra) cut its FY21 growth forecast to 3.6% amid coronavirus-related worries. It has assumed that a full or partial lockdown will continue till end of April and economic activities will be gradually restored only after May. Besides, the impact of the novel coronavirus outbreak has been felt in the collection of the Goods and Services Tax (GST) for February, with the government collecting Rs 98,000 crore so far (till March 30, 2020). Meanwhile, SEBI has decided to provide temporary relaxations in compliances for Credit Rating Agencies (CRAs). There will be some buzz in the e-commerce stocks with report that e-commerce companies are resuming their services. But, several ecommerce companies are struggling to get enough of curfew passes, besides being short of delivery personnel. Auto stocks will be in focus with a private report that auto sales for March could see a 50% year-on-year (Y-o-Y) decline in volumes, given the lockdown and decline in footfall during the second half of the month.

The US markets ended higher on Monday after President Donald Trump abandoned the idea of getting the economy back up and running by Easter. Asian markets are trading in green on Tuesday as factory data from China held out the hope of a rebound in activity even as other countries across the globe all but shut down.

Back home, Indian equity benchmarks witnessed a bloodbath on Monday’s trading session, by falling over four percent, tracking weak cues from overseas as investors braced for a prolonged period of uncertainty as coronavirus-induced lockdowns tightened across the world and in India. Key indices opened in red and stayed in the negative terrain for whole trading session, as traders remain concerned with the International Monetary Fund’s (IMF) statement that the world is in the face of a devastating impact due to the coronavirus pandemic and has clearly entered a recession, but projected a recovery next year. Some cautiousness also came in as the country’s foreign exchange reserves fell by a whopping $11.98 billion to $469.909 billion in the week to March 20 as the Reserve Bank continued to supply dollars into the market to stem fall in the rupee. Key indices continued their free fall during the final hour of trade, as Fitch Solutions slashed its estimate for India's GDP growth in the fiscal starting April 1 to 4.6 per cent due to weaker private consumption and contraction in investment amid coronavirus outbreak, costing economies around the globe. Anxiety persisted over the street, even after the government constituted 11 empowered groups to suggest measures to ramp up healthcare, put the economy back on track and reduce misery of people as quickly as possible post the 21-day lockdown imposed to contain the coronavirus pandemic. Traders even overlooked the Economist Intelligence Unit (EIU) in its post-Covid-19-outbreak stating that even as the Indian economy is likely to be battered by the Coronavirus pandemic this year, it is still likely to be better off than all other G20 countries. Finally, the BSE Sensex lost 1375.27 points or 4.61% to 28,440.32, while the CNX Nifty was down by 379.15 points or 4.38% to 8,281.10.