Markets likely to make slightly negative start

Indian markets ended lower on Monday with cut of around 3% each as selloff intensified across the sectors. Today, the markets are likely to get slightly negative start amid weakness in global markets. Rising corona virus cases may dampen sentiments in markets. With 19,174 fresh Covid-19 cases, India's caseload now stands at 10,075,422. The country's death toll has mounted to 146,145. With 1,899,352 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 910,241, Andhra Pradesh 878,937, Tamil Nadu 807,962, and Kerala 709,000. Market participants will be cautious as Maharashtra government has imposed a curfew from 11 pm to 6 am in all municipal corporations from December 22 till January 5, 2021. The decision has been taken in view of the emergence of new strains of coronavirus in the UK. It has also been decided to put in institutional quarantine for 14 days those who arrive at the state's airports from European and West Asian countries. Passengers coming to Maharashtra from other countries will be home quarantined. However, some respite may come later in the day as rating agency Crisil’s report that corporate profits rose 15 per cent to touch an all-time high in the September quarter as margins widened on softer input costs and better utilistaion levels. It said from an absolute perspective, the earnings before interest, tax, depreciation and amortisation (Ebitda) touched an all-time high Rs 1.60 lakh crore in the September quarter, as against Rs 1.02 lakh crore in the preceding June quarter. Some support may also come with economic think-tank NCAER’s report that having witnessed a contraction in the first half of the current financial year, India's GDP growth is likely to turn positive at 0.1 per cent in the October-December quarter. Traders may take note of that Agriculture Minister Narendra Singh Tomar said the government is focusing on farm mechanisation and asked the industry to provide small machines and equipment to farmers with less landholding to boost their income. Meanwhile, Finance Minister Nirmala Sitharaman on Monday said the government is planning to extend the suspension of fresh insolvency proceedings for another three months, a move which will provide major relief to corporate borrowers hit by the coronavirus pandemic.

The US markets ended mostly lower on Monday as investors grappled with the outbreak of an ominous new strain of COVID-19 along with the likely passage of a long-awaited stimulus package. Asian markets are trading mostly in red on Tuesday as new coronavirus strain in UK weighed on investor sentiment.

Back home, Indian equity benchmarks witnessed sharp selling towards the end of the trade and crashed like house of card on Monday with frontline gauges ending with a massive cut of 3 percentage points as fears of a new strain of coronavirus that has threatened the UK. Markets made a cautious start amid rising coronavirus cases and fresh lockdowns in some countries. Key gauges somehow managed to trade near neutral lines as traders took some respite came in with Union Minister Anurag Singh Thakur’s statement that India has the potential to achieve double-digit growth through a healthy dose of digital services and manufacturing base expansion which will be driven by demand from the rural sector, youth and the aspirational middle class. Some support also came with Finance Minister Nirmala Sitharaman’s statement that India would be the engine of global growth, along with a few other countries, contributing to the revival of the global economy in a significant way. However, markets witnessed sharp selloff in last leg of trade as traders booked their recent profits on reports that UK’s Health Secretary Matt Hancock has warned that the new strain of the coronavirus is ‘out of control’ and suggested parts of England will be stuck in the new, highest tier of restrictions until a vaccine is rolled out. Meanwhile, India has suspended all flights originating from the UK to India until December 31. This suspension to start with effect from 23.59 hours, 22nd December 2020. Consequently, flights from India to the UK shall stand temporarily suspended during above said period. Finally, the BSE Sensex tumbles 1406.73 points or 3.00% to 45,553.96, while the CNX Nifty was down by 432.15 points or 3.14% to 13,328.40.