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Benchmarks likely to make optimistic start; RBI press meet in focus
Mar-27-2020

Indian markets ended higher for a third straight session on Thursday as investors’ sentiment got a boost after Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore Gareeb Kalyan Yojana to help the poor tide over the coronavirus lockdown. Today, the markets are likely to extend their previous session’s gains with positive opening taking positive leads from global cues. Investors will be looking ahead to the 10 AM press conference by Reserve Bank of India (RBI) Governor Shaktikanta Das today and his announcements, if any, a day after Finance Minister Nirmala Sitharaman unveiled a Rs 1.7 lakh crore economic welfare package for the poor in the backdrop of the coronavius pandemic. Though, there may be some cautiousness as former chief statistician Pronab Sen said the country’s growth in the next two quarters will not be more than 3% due to the lockdown across the country. Traders may be concerned as the severe dent in the economic activity due to the coronavirus pandemic led rating agency Crisil to sharply cut its growth estimate for 2020-21 to 3.5%. Also, SBI Research's Ecowrap report stated that the country's economic growth is likely to fall sharply to 2.6% in 2020-21 due to lockdown amid the coronavirus pandemic. There will be some reaction in banking stocks as ratings agency Fitch said the coronavirus-related worries are likely to aggravate difficulties for Indian banks, and revised down the operating environment score for the critical sector by a notch. Telecom stocks will be in focus as the Department of Telecommunications (DoT) asked operators to provide the Wireless Planning and Coordination Wing (WPC) with details of the amount of spectrum in each circle they would require temporarily. There will be some reaction in reality stocks with a private report that bearing the brunt of COVID-19 pandemic, sales of residential units saw a 42% year-on-year (Y-o-Y) drop in the first quarter of the calendar year 2020. Also, infrastructure stocks will be in limelight as ratings agency ICRA stated that the government's move to stop toll collection amid the 21-days’ nationwide lockdown is set to push toll collection into the negative territory for FY 2020, while collection in April, and subsequently FY 2021, is also likely to be adversely impacted.

The US markets ended higher on Thursday after an eagerly awaited coronavirus relief package cleared the US Senate and headed for the House. Asian markets are trading in green on Friday as investors wagered policymakers will roll out additional stimulus measures to combat the coronavirus pandemic after US unemployment filings surged to a record.

Back home, 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. 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. 

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