Equity benchmark indices surged during the early trading on Tuesday amid firm global cues as investors continued to weigh the economic impact of ongoing coronavirus outbreak.
Market benchmark Sensex rallied over 400 points in the opening session led by gains in index-heavyweights Reliance Industries, ICICI Bank and HDFC Bank.
#CNBCTV18Market | Indices open around 0.7% higher amid gaining Asian peers; ITC top gainer after sources tell CNBc-TV18, that the FMCG major has hiked prices for cigarettes by 10-12%, GAIL leading after Q3 results
— CNBC-TV18 (@CNBCTV18Live) February 11, 2020
The 30-share BSE index was trading 439.03 points or 1.07 percent higher at 41,418.65 at around 10 am, and the broader NSE advanced 133.50 points, or 1.11 percent, to 12,165.00.
In the previous session, Sensex settled 162.23 points, or 0.39 percent, down at 40,979.62, and the Nifty slipped 66.85 points, or 0.55 percent, to 12,031.50.
Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 184.58 crore, while domestic institutional investors offloaded shares worth Rs 735.79 crore on Monday, data available with stock exchanges showed.
Tata Steel, Axis Bank, UltraTech Cement, SBI, IndusInd Bank, ITC and ICICI Bank were among the top gainers in the Sensex pack.
On the other hand, TCS was the only stock trading in the red.
All sectoral indices at the National Stock Exchange (NSE) were in the positive terrain with Nifty metal up by 2 percent, auto by 1.2 percent and financial service by 1 percent.
Among stocks, JSW Steel gained by 2.8 percent to trade at Rs 285.75 per share while Tata Steel moved up by 2.5 percent at Rs 455 apiece. Hindalco and Vedanta too advanced by 1.9 percent each.
Tata Motors accelerated by 3.4 percent while Axis Bank and IndusInd Bank gained by 1.8 percent and 1.7 percent. The other prominent gainers were Reliance Industries, GAIL, ITC and UltraTech Cement. However, Tata Consultancy Services (TCS) and Grasim traded with a negative bias.
According to traders, domestic stocks followed global equities, which rallied despite concerns over coronavirus impact on the world economy.
The death toll in China due to the novel coronavirus epidemic has crossed 1,000, while the confirmed cases have gone over 42,000, health officials announced on Tuesday.
Domestic market participants are also tracking Delhi poll results, traders said.
Rupee rises 10 paise to 71.20
The rupee appreciated by 10 paise to 71.20 against the US dollar in opening trade on Tuesday, driven by positive opening in domestic equities.
The rupee opened strong at 71.23 at the interbank forex market then gained further ground to touch 71.20 per dollar, displaying gains of 10 paise against the greenback.
Forex traders said positive opening in domestic equities supported the local unit, while rising crude prices, foreign fund outflows and strengthening of the American currency weighed on rupee and restricted its upmove.
Asian shares bounce, China factories fight to re-start
Asian share markets followed Wall Street higher on Tuesday even as doubts grew about how quickly China’s factories could get back to work given that the coronavirus continues to spread and deaths mount.
The total number of deaths in China has topped 1,000, well past the toll from Severe Acute Respiratory Syndrome, which killed nearly 800 worldwide.
Investors seemed to be hoping for the best, though. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent, while Shanghai blue chips rallied 1 percent.
Japan’s Nikkei was closed for a holiday, although Nikkei futures traded 0.7 percent firmer. Futures for the EUROSTOXX 50 rose 0.7 percent and the FTSE 0.6 percent.
E-Mini futures for the S&P 500 added 0.3 percent after a late jump took Wall Street to fresh record highs on Monday. The Dow ended up 0.6 percent, the S&P 500 gained 0.73 percent and the Nasdaq 1.13 percent.
The gains came even as the World Health Organization (WHO) warned the spread of coronavirus among people who had not been to China could be “the spark that becomes a bigger fire”.
In China, factories were slow in re-opening after an extended Lunar New Year break, leading analysts at JPMorgan to again downgrade forecasts for growth this quarter.
“The coronavirus outbreak completely changed the dynamics of the Chinese economy,” they said in a note.
They assumed the contagion would peak in March and factories would slowly resume opening this month. In this case, growth would brake sharply to around a 1 percent annualised pace in the first quarter, before rebounding to 9.3 percent in the second.
Should the contagion not peak until April, growth could turn negative in the first quarter, with a rebound spread over the second and third quarters, the JPMorgan analysts said.
Analysts at Nomura said measures of migration flows within China suggested the virus had “a devastating impact on China’s economy in January and February.”
“We are concerned that global markets thus far appear to be significantly underestimating the extent of disruption inflicted by the virus,” they wrote in a note.
The risks are such that investors are wagering on more stimulus from Beijing, while a host of other central banks are under pressure to safeguard their economies with cheaper loans.
Markets are pricing in almost 40 basis points of easing this year from the Federal Reserve and again slightly inverted the Treasury yield curve to reflect the danger of recession.
Fed Chair Jerome Powell appears before Congress on Tuesday to begin two days of testimony and is expected to reiterate that the US economy is doing well but that rates can stay low given subdued inflation.
The relative outperformance of the US economy is keeping the dollar well supported, with the euro slipping to a four-month low at $1.0906. The British pound touched a two-month trough of $1.2870 and was last at $1.2913.
Against a basket of currencies, the dollar was again at its highest since mid-October at 98.858.
The dollar was steadier on the Japanese yen, which benefits from being a safe haven of its own, and last stood at 109.81 .
Risk aversion initially helped lift gold to its highest for a week, only for the strength of the dollar to pull it back 0.25% to $1,5768.61 per ounce.
Oil prices bounced a little after weeks of selling, as traders waited to see how demand in China might fare and whether OPEC could agree to trim supplies.
Brent crude futures firmed 72 cents to $53.99 a barrel, while US crude rose 58 cents to $50.15.
Stock exchanges on Wall Street closed with significant gains on Monday.
— With inputs from agencies
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Updated Date: Feb 11, 2020 10:54:22 IST