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Markets extend gaining streak to third days
Mar-26-2020

Indian equity markets traded with volatility throughout the session but in green terrain and finally ended with solid gains on Thursday, as Finance Minister Nirmala Sitharaman announced Rs 1.7 lakh crore ‘PM Gareeb Kalyan’ scheme to cushion the impact of the lockdown in wake of COVID-19 pandemic. This was the third consecutive day of rise for the domestic markets, settling just shy of their crucial 8,650 (Nifty) and 29,950 (Sensex) levels. Markets made optimistic start and traded higher, as the Department for Promotion of Industry and Internal Trade (DPIIT) has set up a control room to monitor in real-time the status of transportation and delivery of essential commodities amid the coronavirus lockdown in the country. It will also monitor difficulties being faced by various stakeholders during the lockdown period from March 25 to April 14. 

However, markets witnessed some volatility in early afternoon deals, as traders turned wary with Care Ratings’ report 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 trillion cumulatively. It added that Q4 growth may not be negative but can go down to 1.5-2.5%. The economy was slated to grow by Rs 1.74 lakh crore in Q4 or by 4.7%. But, the indices started to rise steadily in final hour of trade, as in order to improve capital base, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for continuation of the process of recapitalization of Regional Rural Banks (RRBs) by providing minimum regulatory capital to RRBs for another year beyond 2019-20, that is, up to 2020-21 for those RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India.

On the global front, Asian markets ended mostly lower on Thursday, while European markets were trading in red, as the still rapidly spreading coronavirus and fears of a deep global recession overshadowed optimism from a historic $2 trillion U.S. fiscal stimulus deal. Back home, Aviation stocks ended higher despite aviation consultancy CAPA India’s report stating that Indian aviation sector is projected to incur a staggering $3.3-3.6 billion loss in the first quarter of the next financial year if flight services remain grounded till June-end. Besides, metal stocks were buzzing 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.

Finally, the BSE Sensex gained 1410.99 points or 4.94% to 29,946.77, while the CNX Nifty was up by 323.60 points or 3.89% to 8,641.45.  

The BSE Sensex touched high and low of 30,099.91 and 28,566.34, respectively and there were 26 stocks advancing against 04 stocks declining on the index.     
The broader indices ended in green; the BSE Mid cap index rose 3.49%, while Small cap index was up by 3.73%.

The top gaining sectoral indices on the BSE were Telecom up by 10.04%, Capital Goods up by 7.24%, Bankex up by 6.69%, Finance up by 6.61%, Realty up by 6.11%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Indusind Bank up by 45.07%, Bharti Airtel up by 11.23%, Larsen & Toubro up by 9.57%, Bajaj Finance up by 8.06% and Kotak Mahindra Bank up by 7.66%. On the flip side, Maruti Suzuki down by 3.05%, Tech Mahindra down by 2.60%, Sun Pharma down by 2.45% and Reliance Industries down by 0.60% 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 traded in a range of 8749.05 and 8304.90 and there were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 46.03%, Larsen & Toubro up by 10.00%, Bajaj Finance up by 9.27%, Bharti Airtel up by 8.37% and Hero MotoCorp up by 7.04%. On the flip side, GAIL India down by 3.31%, HCL Technologies down by 2.60%, Sun Pharma down by 2.55%, Tata Steel don by 2.00% and Tech Mahindra down by 1.29% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 104.04 points or 1.83% to 5,584.16, France’s CAC fell 83.44 points or 1.88% to 4,348.86 and Germany’s DAX was down by 199.43 points or 2.02% to 9,674.83.

Asian markets ended mostly lower on Thursday, following lingering concerns about the corona virus pandemic. Meanwhile, investors awaited the release of US initial jobless claims data, which could provide clues to the economic impact of the corona virus outbreak. Chinese shares ended lower as investors took profits after two days of strong gains, and as a rise in imported corona virus cases prompted Beijing to tighten controls to prevent a resurgence of infections. Further, Japanese shares settled sharply down after three days of massive gains. Tokyo Governor Yuriko Koike warned of a possible expansion of the corona virus in the capital and urged residents to stay home this weekend. The downside was capped after the passage of a $2 trillion US stimulus package.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,764.91
-16.68
-0.60

Hang Seng

23,352.34
-174.85
-0.74

Jakarta Composite

4,338.90
401.27
10.19

KLSE Composite

1,328.09

3.59

0.27

Nikkei 225

18,664.60
-882.03
-4.51

Straits Times

2,487.56
-17.91
-0.71

KOSPI Composite

1,686.24
-18.52
-1.09

Taiwan Weighted

9,736.36
91.61
0.95
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