Markets to get cautious start on Wednesday

Indian markets ended sharply lower on Monday, with rate-sensitive financials, auto and realty stocks pacing the decliners. Markets remain closed on Tuesday on account of Dr. Babasaheb Ambedkar Jayanti. Today, the start of session is likely to be cautious amid mixed cues from Asian peers and the government's decision to extend the nation-wide lockdown till May 3. There will be concerned with report that confirmed COVID-19 cases in India stand at 10,815. The death toll from the outbreak in India is at 353. Maharashtra, Delhi and Tamil Nadu have reported the highest number of cases. Also, there will be some cautiousness as the International Monetary Fund (IMF) cut its projection for India's economic growth to 1.9% for the current financial year, the lowest since the 1991 balance of payments (BoP) crisis, against its 5.8% forecast earlier. Meanwhile, investors will keep eye on start of earnings numbers for the fourth quarter ended and year ended March 31, 2020. Though, some support may come later in the day with supporting macro-economic data. The government data showed that the consumer Price Index-based (CPI) inflation eased for the second month in a row in March, at 5.91%, on the back of further reduction in rate of food inflation. Market participants may take encouragement with report that the government may soon come up with details of a second stimulus package. Traders may take note of report that India may soon start trials of treatment protocols on coronavirus (Covid-19) patients using ayurvedic medicines. Aviation stocks will be in focus with report that India will keep domestic and international flights suspended till May 3 in alignment with a national lockdown being extended.

The US markets ended higher on Tuesday as traders continued to express optimism about signs of a flattening of the coronavirus curve. Asian markets are trading mixed on Wednesday as warnings of the worst global recession since the 1930s underlined the economic damage already done even as some countries tried to re-open for business.

Back home, Indian equity indices ended highly volatile day of trade on lower note on Monday, as the government is set to extend a lockdown to contain the spread of the coronavirus, while a rise in oil prices also weighed on sentiments. Key indices made pessimistic start and traded with heavy losses, as traders remain concerned with the World Bank in its South Asia Economic Focus report stating that India may record its worst growth performance since the 1991 liberalisation this fiscal year (FY21) as the coronavirus outbreak severely disrupts the economy. It said India's economy is expected to grow 1.5 per cent to 2.8 per cent in FY21. Besides, overseas investors pulled out a net Rs 9,103 crore from the Indian markets in April so far as the Covid-19 crisis triggered a return to safe haven assets like gold and dollar-denominated securities. However, markets recovered partly from the lows of the day in afternoon session, taking support from data showing that India's industrial output, measured in Index of Industrial Production (IIP), grew 4.5% in February 2020, mainly on account of higher output in mining, manufacturing and electricity sector. The output for February is the highest number since July 2019 - when it stood at 4.3%. IIP had grown by 0.2% in February 2019 and 2% in the preceding month (January 2020). Though, markets failed to hold the recovery and fell sharply in late afternoon session, as anxiety remained among traders with Federation of Indian Export Organisations (FIEO) stating that India’s exports sector may witness about 15 million job losses and rising non-performing assets (NPAs) amongst exporting units, following the cancellation of over 50 percent of orders and gloomy forecast for the future due to the Covid-19 pandemic. Investors also awaited cues from CPI data for March and the minutes of the Monetary Policy Committee’s latest meeting scheduled to be released later in the day. Finally, the BSE Sensex lost 469.60 points or 1.51% to 30,690.02, while the CNX Nifty was down by 118.05 points or 1.30% to 8,993.85.