Markets end day's trading in red: Sensex down 310 points at 30,380, Nifty drops below 9,000-mark; Kotak Bank top loser, cracks 6%
Markets surged more than 2 percent in early deals as investors on Dalal Street shrugged off the dire forecasts of virtually no growth in 2020 and took positives from the reports that businesses could see phased opening from 20 April.
The Sensex dropped over 310 points on Wednesday, tracking losses in index-heavyweights HDFC twins, Reliance Industries and Kotak Bank, as global markets tanked on bleak economic outlook due to the Covid-19 pandemic.
Selling pressure in BFSI, auto and pharma stocks dragged the market lower in the last leg of trade ending down by 1 percent. Heavy selling in Index heavy weight stocks like Kotak Mahindra Bank, HDFC bank, Hero Motorcorp among others put pressure on market. Aviation stocks tumbled after suspension of all commercial passenger vehicles till 3 May 2020.
Meanwhile, the market had surged more than 2 percent in early deals as investors on Dalal Street shrugged of the dire forecasts of virtually no growth in 2020 and took positives from the reports that businesses could see phased opening from 20 April. Sectorally, all indices except BFSI and auto ended in green.
The markets are expected to be volatile as investor access coronavirus situation and government relief measures to combat the economic crisis due to it. Investors are also awaiting Q4 company results of Wipro to be declared today.
Sumeet Bagadia, Executive Director, Choice Broking said: "The Nifty settled its daily closing at 8925 level with the loss of 68 points and paired all its early gains during the second session after forming an intraday high. Technically as well as derivative wise, strong resistance came at 9300 level and the Nifty made high of 9260 level afterwards, we saw a healthy correction along with its large cap constituents. However, as per OI, at present level, good support comes at 8880 and Nifty has given a close above this so we can expect a some amount of bounce back again upto the level of 9120 to 9200 levels."
Despite opening on a positive note, domestic stocks gave up all gains in a highly volatile session following negative sentiment in global equities amid projections of major slump in economic growth, traders said to PTI.
The IMF on Tuesday slashed India's projected GDP growth to 1.9 percent in 2020 from 5.8 percent in January, as the global economy is seen hitting the worst recession since the Great Depression in the 1930s due to the raging coronavirus pandemic that has nearly stalled all economic activities across the world. Bourses in Shanghai, Hong Kong and Tokyo ended significantly lower. Stock exchanges in Europe too opened in the red.
The death toll due to Covid-19 rose to 377 while the number of cases in the country climbed to 11,439 on Wednesday, according to the Union Health Ministry. The global tally of the infections has crossed 19 lakh, with over 1.2 lakh deaths. Rupee slides 17 paise to hit all-time low The Indian rupee pared early gains and settled for the day 17 paise lower at an all-time low of 76.44 (provisional) against the US dollar on Wednesday, tracking weak domestic equities and strengthening of the American currency overseas.
Forex traders said firm US dollar index weighed on the local unit. Besides, investor sentiments remain fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as global economy.
At the interbank foreign exchange, the rupee opened strong at 76.07, but soon lost ground and finally settled at 76.44, registering a fall of 17 paise over its previous close.
During the session, the rupee witnessed high volatility and touched a high of 75.99 and a low of 76.48 against the US dollar.
On Monday, the rupee had settled at 76.27 against the greenback.
The forex market was closed on April 14 on account of Baba Saheb Ambedkar Jayanti.
Domestic bourses were trading on a negative note on Wednesday with benchmark indices Sensex trading 295.03 points lower at 30,394.99 and Nifty down by 71.45 points at 8,922.40.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.56 percent to 99.43.
Global shares dip
Global share markets dipped into the red on Wednesday as warnings of the worst global recession since the 1930s underlined the economic damage done during the coronavirus pandemic even as some countries try to re-open for business.
China moved again to cushion its economy, cutting a key medium-term interest rate to record lows, paving the way for a similar reduction in benchmark loan rates, while reducing the amount banks must hold as reserves.
But despite those moves combined injecting a total of $43 billion into the financial system of the world’s second largest economy, they failed to provide a sustained boost for world shares. MSCI’s All-Country World Index, which tracks shares across 49 countries, was 0.37 percent down.
European stock markets opened lower, with the pan-European STOXX 600 index opening 0.8 percemt lower after five previous days of gains, fuelled by early signs the health crisis was ebbing and on hopes that sweeping lockdown measures would soon be lifted.
French shares fell 0.9 percent as France became the fourth country to report more than 15,000 deaths due to the coronavirus after Italy, Spain and the United States.
Much economic damage has also already been done, with the International Monetary Fund predicting the world this year would suffer its steepest downturn since the Great Depression of the 1930s.
Ahead of a steady stream of results due in the coming weeks, signs of corporate stress caused by the pandemic are widespread.
“A lot of good news has been priced in and we’re due for some consolidation, particularly as we head into earnings season as we all know the numbers will not be good,” Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.
Dutch navigation and digital mapping company TomTom shed 2.7 percent after saying it expected negative free cash flow this year and lower revenue from its automotive and consumer businesses due to the pandemic.
London-based asset manager Jupiter Fund Management dropped 5.6 percent after reporting an 18.3 percent drop in assets under management in the first quarter as fears over the pandemic rattled financial markets.
In the United States, E-Mini futures for the S&P 500 fell 0.5 percent, following a 3 percent rise in New York.
Even as some U.S. states considered relaxing restrictions, the country’s death toll rose by at least 2,228, a single-day record, according to a Reuters tally.
President Donald Trump responded by saying some states could still open shortly or even immediately. He also temporarily halted funding to the World Health Organization, saying it should have done more to head off the pandemic.
Italian bonds remained under pressure amid lingering disappointment with the half-a-trillion euro plan to support coronavirus-hit economies agreed by euro zone finance ministers last week.
Italy’s 2-year bond yield was last up 5 basis points to 0.89 percent after rising nearly 20 bps on Tuesday Ten-year yields were flat at 1.79 percent.
The closely watched gap with Germany’s 10-year bond yield, effectively the risk premium Italy pays investors, continued to rise, last at nearly 220 bps, the highest since mid-March.
In currencies, the dollar index extended gains, rising 0.57 percent to 99.400.
Gold prices fell on Wednesday as investors locked in profits after strong recent gains. It was last at $1,711 an ounce.
In energy markets, oil prices fell amid persistent worries about oversupply.
Brent futures were down 51 cents, or 1.7 percent, giving up earlier gains. US West Texas Intermediate crude slid 4 cents, or 0.2 percent, to $20.07.
Among the sectoral indices, IT was the only laggard. Media was the biggest gainer. Oil & gas, banking, financial services, consumer durables, auto, metal and FMCG rose between 1 and 2 percent. BSE Midcap and Smallcap indices gained over 1.5 percent.
While all sectoral indices ended in red, metal slid almost 5 percent. BSE midcap index shed over 1.5 percent while the BSE Smallcap index fell over 1 percent
The markets extended their negative streak for the fifth successive session as US Federal Reserve Chair Jerome Powell warned of further hikes if the inflation levels do not come down