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Markets trade deeply in red following global sell-off amid Coronavirus Crisis
Mar-30-2020

Indian equity benchmarks made gap-down opening on Monday as coronavirus lockdown tightened across the world, fueling fears of a long recession. Markets have trimmed some initial losses but are trading in red with cut of around 2% each in early deals. Globally, there are over 7.2 lakh confirmed cases and 33,976 deaths from the coronavirus outbreak. Of these, over 1.85 lakh have recovered. The number of infected cases in India has increased to 1,024, with the death toll rising to 27. Traders were concerned with the International Monetary Fund’s (IMF) statement that the world is in the face of a devastating impact due to the coronavirus pandemic and has clearly entered a recession, but projected a recovery next year. There were some cautiousness with domestic rating agency Icra’s statement that India's gross domestic product (GDP) is likely to contract by 4.5 per cent in the April-June 2020 quarter and will rise by only 2 per cent in 2020-21 on the coronavirus impact, despite the Reserve Bank of India's (RBI) massive actions to spur the economy.

On the global front, all the Asian markets are trading lower following the sharp losses on Wall Street Friday as worries about the rising number of coronavirus infections around the world and its impact on the global economy dampened sentiment. The global number of coronavirus infection cases has risen to more than 720,000. The US has surpassed China as the country with the most number of confirmed coronavirus infections, forcing President Donald Trump to extend the guidelines for national social distancing to April 30.

Back home, the Finance Ministry and RBI will held a meeting on March 31 to decide on government's borrowing plan for the first half of 2020-21 amid the lockdown to contain the spread of coronavirus. On the sectoral front, auto stocks were in focus as the Supreme Court (SC) allowed the sale of only 10 of the 700,000 unsold BS4 vehicles (7.27 lakh vehicles) beyond the March 31 deadline. Stock specific developments, InterGlobe Aviation and SpiceJet plunged around 5%. The International Travel Association warned that Indian air carriers are in grave and immediate danger of insolvency in the wake of the pandemic outbreak that is disrupting the industry across the globe.

The BSE Sensex is currently trading at 29231.80, down by 583.79 points or 1.96% after trading in a range of 28708.83 and 29382.86. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.90%, while Small cap index was down by 1.35%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.68%, IT up by 0.52%, TECK up by 0.35% while, Auto down by 3.88%, Metal down by 3.16%, Capital Goods down by 2.48%, Industrials down by 2.42%, Realty down by 2.31% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.79%, Tech Mahindra up by 2.62%, TCS up by 1.51%, ITC up by 0.61% and HCL Technologies up by 0.50%. On the flip side, Bajaj Finance down by 9.17%, Mahindra & Mahindra down by 6.66%, HDFC down by 4.34%, Maruti Suzuki down by 4.19% and ONGC down by 4.04% were the top losers.

Meanwhile, Moody’s Investors Service has sharply cut India’s growth forecast to 2.5% for calendar  year 2020 from 5.3% earlier after the government ordered a nationwide lockdown to curb the spread of the coronavirus. It estimates a 5% growth for calendar year 2019. It expects a sharp rebound in India’s growth in calendar year 2021 to 5.8%.

India imposed a three-week nationwide lockdown to curb the spread of the coronavirus pandemic, starting March 25. It said the lockdown will dampen economic growth in India, already facing credit availability issues. In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors.

Besides, it said that advanced economies are seen contracting 2% in 2020 against 1.7% growth in 2019 while emerging economies will slow to 1.9% from 4.2%. China is forecast to grow 3.3% in 2020 against 6.1% in the previous year. A general lack of social safety nets, weak ability to provide adequate support to businesses and households, and inherent weaknesses in many major emerging market countries will amplify the effects of the coronavirus-induced shock.

The CNX Nifty is currently trading at 8501.35, down by 158.90 points or 1.83% after trading in a range of 8333.60 and 8534.45. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.61%, Axis Bank up by 2.84%, GAIL India up by 2.52%, Tech Mahindra up by 2.34% and Dr. Reddy’s Lab up by 2.26%. On the flip side, Bajaj Finance down by 8.61%, Mahindra & Mahindra down by 6.15%, Eicher Motors down by 5.59%, Bajaj Finserv down by 4.91% and JSW Steel down by 4.52% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 519.81 points or 2.68% to 18,869.62, Straits Times dropped 98.77 points or 3.91% to 2,429.99, Hang Seng plunged 303.21 points or 1.29% to 23,181.07, Taiwan Weighted declined 95.07 points or 0.98% to 9,603.85, KOSPI fell 17.10 points or 1.00% to 1,700.63, Jakarta Composite slumped 187.23 points or 4.12% to 4,358.34 and Shanghai Composite was down by 44.13 points or 1.59% to 2,728.07.

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