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Markets trade with traction in early deals; Sensex up 2.50%
Mar-26-2020

Indian equity benchmarks made optimistic start and extended their gains on Thursday. Markets are trading higher with gains of over 2% each in early deals as sentiments were positive 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. Meanwhile, according to health ministry data, nearly 90 more coronavirus positive cases were reported in India taking the total number of cases to 616 on March 25 while the number of deaths was 10.

On the global front, Asian markets are trading mostly higher as investors are awaiting the passage of a $2 trillion stimulus package in the US to combat the economic impact of the coronavirus pandemic. Investors are also looking ahead to a report on weekly US jobless claims scheduled to be released later in the day, as it will be among the first data points to reflect the impact of the coronavirus outbreak. Meanwhile, the Bank of Japan said that producer prices in Japan were up 2.1 percent on year in February. That was shy of expectations for an annual increase of 2.2 percent and down from 2.3 percent in January.

Back home, the metal stocks were in focus 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. In stock specific development, Indian Oil Corporation tumbled amid reports that the company has slashed its refining capacity by a third.

The BSE Sensex is currently trading at 29255.21, up by 719.43 points or 2.52% after trading in a range of 28566.34 and 29280.38. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 2.45%, while Small cap index was up by 2.99%.

The top gaining sectoral indices on the BSE were IT up by 4.42%, TECK up by 3.97%, Capital Goods up by 2.79%, Realty up by 2.79%, Consumer Durables up by 2.77%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Indusind Bank up by 14.99%, Axis Bank up by 7.53%, Infosys up by 6.97%, Bajaj Auto up by 4.92% and Bajaj Finance up by 4.89%. On the flip side, Maruti Suzuki down by 1.57%, ONGC down by 0.98%, SBI down by 0.26% and Tata Steel down by 0.05% were the top losers.

Meanwhile, Care Ratings in its latest report has said 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 lakh crore cumulatively. The assessment is based on the FY20 real GDP that is Rs 140-150 lakh crore.

It stated that assuming 300 working days in a year, the daily output comes to Rs 45-50,000 crore which can potentially be lost due to the shutdowns. Based on this, Q4 growth may not be negative but can go down to 1.5-2.5 per cent. The economy was slated to grow by Rs 1.74 lakh crore in Q4 or by 4.7 per cent.

Further it said that of the 21 days lockout, 14 days spill over to FY21, therefore potential total loss will be in the region of Rs 6.3-7.2 lakh crore assuming 18 working days will be split across the two years. Besides, it warned that with two-thirds of the impact being passed on to Q1, the GDP loss can be in the region of Rs 4.2- Rs 4.8 lakh crore in FY21. This can potentially lead to a de-growth in GDP in Q1 provided there is no or low growth in the subsequent quarters.

The CNX Nifty is currently trading at 8513.65, up by 195.80 points or 2.35% after trading in a range of 8304.90 and 8519.15. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 14.99%, UPL up by 7.89%, Axis Bank up by 7.56%, Infosys up by 7.06% and Tech Mahindra up by 5.09%. On the flip side, Indian Oil Corporation down by 2.18%, JSW Steel down by 1.78%, ONGC down by 1.06%, Maruti Suzuki down by 0.96% and Hindalco down by 0.74% were the top losers.

All the Asian markets are trading mostly higher; Hang Seng rose 0.63 points to 23,527.82, Taiwan Weighted jumped 65.51 points or 0.68% to 9,710.26, KOSPI increased 15.23 points or 0.89% to 1,719.99 and Jakarta Composite surged 354.25 points or 9.00% to 4,291.88. On the other hand, Nikkei 225 slipped 609.72 points or 3.12 % to 18,936.91, Straits Times declined 15.60 points or 0.62% to 2,489.87 and Shanghai Composite was down by 4.95 points or 0.18 % to 2,776.64.

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