Indian stock markets suffered a selloff today but closed off day’s low. Spooked by fears that the record rise in covid cases will derail economic recovery, the Sensex fell as much as 1470 points at day’s low before recovering to close at 47,949, down about 900 points. The Nifty finished 1.7% lower at 14,359, after falling to 14,191 at day’s lows. India today reported a record rise of 2.7 lakh coronavirus infections while deaths from COVID-19 rose by a record, according to health ministry data.
Here are 10 things to know about today’s market action:
1) “The health crisis India is going through and localised lockdowns and restrictions on economic activity warrant a market correction,” says VK Vijayakumar, chief investment strategist at Geojit Financial Services, adding the targets of around 11% GDP growth and above 30% earnings growth for FY 22 that the market had assumed pre-second wave are likely to fall short.
2) The state of Maharashtra, home to financial hub Mumbai, has already imposed stringent curbs, effective April 15. Delhi Chief Minister Arvind Kejriwal today announced a lockdown from 10 pm on Monday night till 5 am next Monday in view of an exponential rise in coronavirus cases and the city’s health system being stretched to its limits.
3) “The steady rise in test positivity cases is of serious concern. But, this negativity need not reflect fully in the market since the global clues are positive. The sharp recovery in global growth led by the US and China augur well for markets globally. The decline in US 10-year yield from the recent high of 1.75 % to 1.56% presently is a major relief & support to markets. Bulls would be reluctant to go long; bears would hesitate to go short massively. Time to wait and watch,” Vijayakumar, said.
4) Technically, the markets are finding it hard to establish a trend, says Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
5) “Nifty is not being able to get past 14900-15000 on the upside and neither is it being able to break the 14,200 levels on a closing basis. If we break 14,200 on a closing basis, we can slide to 13800-13900. For the time being, the upside seems to be capped at 15,000,” he said.
6) The rupee today plunged by 52 paise to close at 74.87 against the US dollar on Monday amid a lacklustre trend in the domestic equities as investors fretted over the prospects of lockdown in some parts of the country amid a surge in COVID-19 cases.
7) Global markets were mostly higher, tracking another round of record highs on Wall Street. Both the Dow and S&P finished at new peaks on Friday, following on the heels of strong data for American housing starts, employment and retail sales.
8) Among the Sensex stocks, barring Infosys and Dr Reddy’s all other shares ended in red.
9) PowerGrid was the top loser in the Sensex pack, slumping 4.17 per cent, followed by ONGC, IndusInd Bank, Kotak Bank, L&T, Bajaj Finserv, Asian Paints and M&M.
10) “While FII’s pulled out only a small sum of ₹3800 crore during the first half of the month, the overall sentiments have got impacted due to the spread of the coronavirus across multiple states, said S Ranganathan, Head of Research at LKP Securities.