Markets likely to get cautious start on Wednesday

Indian markets ended the financial year 2019-20 on a positive note Tuesday bolstered by strong global cues. Today, the start of new fiscal year 2020-21 (FY21) is likely to be cautious following weakness in Asian peers, amid concerns related to coronavirus slowing economic growth. The total number of Covid-19 cases in India has reached 1397, including 1238 active cases, while 124 people have been cured/discharged. Besides, as many as 35 people have died because of Covid-19. There will be some cautiousness with report that the government has missed the collection target for the current financial year from CPSE disinvestment set in the Revised Estimates of Budget by about Rs 14,700 crore. Also, the government's fiscal deficit touched 135.2% of the full-year target at February-end mainly due to slower pace of revenue collections. Though, traders may get some respite later in the day with the government data showing that eight core sector industries recorded a growth of 5.5% in February, highest in 11-months, mainly due to healthy expansion in output of coal, refinery products and electricity. Traders may take note of report that the RBI is likely to cut benchmark interest rate by another 100 bps in 2020-21 fiscal and continue to employ all policy tools at its disposal to support growth and financial stability to contain the impact of Covid-19 pandemic on the economy. Besides, Finance Minister Nirmala Sitharaman said the IMF can develop innovative and ingenious methods to meet COVID-19 related financing requirements given that policy space is severely constrained in most countries in these unprecedented circumstances. Meanwhile, the government has extended the existing foreign trade policy (2015-20) for one year till March 2021 amid coronavirus outbreak and the lockdown to contain the virus spread. Public sector banks' (PSB) will be in focus as the proposed PSB merger will come into effect from today. Auto sector stocks will also be in action, as automobile manufacturers will release their March auto sales figures today amid expectations of at least 50% drop in sales.

The US markets ended lower on Tuesday as the coronavirus pandemic battered huge swaths of the global economy. Asian markets are trading mixed on Wednesday after results of a private survey showed China's manufacturing activity expanded slightly in March, compared with February's sharpest contraction on record.

Back home, reversing previous session’s heavy losses, Indian equity indices showcased courageous performance on Tuesday by gaining more than three and half percent in the session, tracking Asian peers, after upbeat factory data from China gave investors hope of a rebound in activity despite a spike in coronavirus cases in India. Key indices opened higher and stayed up-beat for whole trading session, as investors' sentiment got a boost from 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. Some encouragement also came as in line with the Budget announcement, the Reserve Bank of India (RBI) opened certain specified categories of government securities (g-secs) for non-resident investors as part of an initiative to deepen the bond market. Buying got intensified in the late hour of trading, taking support from Fitch Solutions’ statement that the RBI is likely to cut benchmark interest rate by another 100 bps in 2020-21 fiscal and continue to employ all policy tools at its disposal to support growth and financial stability to contain the impact of Covid-19 pandemic on the economy. Adding to the optimism, in a big relief to the agriculture sector, the government has extended the interest subsidy to all crop loans of up to Rs 3 lakh given by banks which are due or will be due between March 1, 2020 and May 31, 2020. Traders ignored domestic credit rating agency India Ratings (Ind-Ra) cuts 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. Finally, the BSE Sensex gained 1028.17 points or 3.62% to 29,468.49, while the CNX Nifty was up by 316.65 points or 3.82% to 8,597.75.