Equity market witnessed one of the steepest falls in the recent years on Friday, as the fears of coronavirus turning into a pandemic triggered all-round sell-off at the bourses. Hopes that the epidemic that started in China would be over in a few months and economic activity would return to normal have been shattered, as new infections reported around the world now surpass those in China.
As a result, the S&P BSE Sensex nosedived 1,448 points or 3.64 per cent to end the session at 38,297. All 30 constituents ended in the red. Tech Mahindra (down around 9 per cent) took the biggest knock on the index. Other major contributors to the index's decline were were Reliance Industries (RIL), Infosys, HDFC, ICICI Bank, and TCS. On the NSE, the 50-share index Nifty plunged 432 points or 3.7 per cent to end at 11,202. Volatility index India VIX zoomed 29 per cent to 22.87 levels.
On a weekly basis, Sensex slipped around 7 per cent while Nifty declined 7.2 per cent. This is the worst weekly fall for the indices in a decade.
All sectoral indices on the NSE ended deep in the red. Nifty IT index dropped over 5 per cent to 15,274 levels while Nifty Metal index cracked over 7 per cent to 2,233 levels. In the broader market, the S&P BSE MidCap index dropped over 3 per cent to 14,600 levels while S&P BSE SmallCap ended at 13,709, down 500 points or 3.52 per cent.
Analyst view
According to analysts, markets are increasingly getting worried about the rapid outbreak of coronavirus across geographies and the consequent economic fallout.
"The Coronavirus continues to drive market sentiment, with “risk off” triggered by the spread of the disease outside China and Asia. The obvious risk for Wall Street-correlated world stock markets is that the virus spreads more overtly into North America. Clearly the hope and indeed still the base case is that the virus, which appears to be an extreme form of viral flu, will burn itself when the weather changes as was indeed the case with Sars," said Christopher Wood, global head of equity strategy at Jefferies. READ MORE HERE
Further, incessant selling by foreign portfolio investors (FPIs) spooked retail investors, traders said. According to provisional data available with stock exchanges, so far this week, FPIs have offloaded stocks worth Rs 9,389 crore on a net basis.
"Technically, with the Nifty moving down further and in a free fall, traders will need to watch if the Nifty can now hold above the next major supports at 11090; else the current downtrend is likely to continue. Any pullback rallies could find resistances at 11382-11536," said Deepak Jasani, head of retail research at HDFC Securities in an emailed note.
Global Markets
World share markets were headed for their worst week since the depths of the 2008 financial crisis as investors ditched risky assets on fears the coronavirus would become a pandemic and trigger a global recession. Stock futures showed European indexes set to track the rout in their Asian counterparts on Friday, which comes after another massive selloff on Wall Street overnight.
MSCI's regional index excluding Japan shed 2.7 per cent. Japan's Nikkei slumped 4.3 per cent on rising fears the Olympics planned in July-August may be called off due to the coronavirus.
In commodities, US crude futures fell 3.2 per cent to $45.59 per barrel, having lost 14.5% so far on the week, which would be the deepest fall in nearly nine years.
(With inputs from Reuters & PTI)
3:42 PM IST
3:41 PM IST
3:36 PM IST The S&P BSE Sensex tanked 1,448 points or 3.64 per cent to settle at 38,297 levels while NSE's Nifty50 index ended at 11,202, down 432 points or 3.7 per cent.
3:21 PM IST In the long run, should COVID-19 pandemic prevail, stocks with safe haven characteristics would be the go-to avenues. IT Sector (preferably domestic focused as most have relatively high foreign exposure that is linked to current muted demand), Staples (except where there is no element of meat consumption), Utilities and high dividend yield stocks can be likely attractive candidates.
3:16 PM IST The impact on the Indian economy will depend on whether or not coronavirus spreads to other countries with which India has trade links, and whether it is temporary or more permanent in nature. India exported a total of $16.7 bn to China in FY19. Considering that total exports in FY20 remain at the same level as FY19 and based on out earlier stated assumption of 80% loss in Indian exports to China, the total export loss would be around $13.4 bn. Exports to China witnessed a CAGR growth of about 28% between FY17 and FY19.
SECTOR WATCH | Here's how sectoral indices on the NSE performed
MARKET AT CLOSE | All 30 constituents of S&P BSE Sensex end in the red
CLOSING BELL
The S&P BSE Sensex tanked 1,448 points or 3.64 per cent to settle at 38,297 levels while NSE's Nifty50 index ended at 11,202, down 432 points or 3.7 per cent.
In the long run, should COVID-19 pandemic prevail, stocks with safe haven characteristics would be the go-to avenues. IT Sector (preferably domestic focused as most have relatively high foreign exposure that is linked to current muted demand), Staples (except where there is no element of meat consumption), Utilities and high dividend yield stocks can be likely attractive candidates.
COMMENT :: CARE Ratings on coronavirus impact
The impact on the Indian economy will depend on whether or not coronavirus spreads to other countries with which India has trade links, and whether it is temporary or more permanent in nature. India exported a total of $16.7 bn to China in FY19. Considering that total exports in FY20 remain at the same level as FY19 and based on out earlier stated assumption of 80% loss in Indian exports to China, the total export loss would be around $13.4 bn. Exports to China witnessed a CAGR growth of about 28% between FY17 and FY19.
MARKET UPDATE:: Nifty below 11,200
Contribution to S&P BSE Sensex's fall today
MARKET CHECK
Heatmap: S&P BSE Sensex
MARKET UPDATE :: Sensex down 1,500 pts
MARKET UPDATE:: Nifty down over 400 pts
BROKERAGE RADAR | Emkay Global on Automobiles
Wholesales are expected to be under pressure in CVs, 2Ws and PVs due to inventory correction by dealers before the BS6 transition. In comparison, marginal
growth is likely to be seen in tractors due to the low base from last year and improved customer sentiment. Our top Buys and OWs in sector EAP are Maruti Suzuki, Ashok Leyland, Tata Motors and Escorts. Our top Sell rated stock is TVS Motors and we are UW on it in our sector EAP.
The Indian markets tracked the rout in global indices and crashed as coronavirus’ repercussions on global economy continue to deepen. There are concerns that the outbreak is spreading to the world’s largest economy – USA as well as certain parts of Europe and that will adversely impact the global supply chains big time, thereby affecting economic growth of most of the nations. In the Indian markets, even defensives like IT tumbled despite a weak rupee indicating increasing anxiety amongst investors. Although Q3 GDP data is lined up today which is expected to bottom out, in the coming days, the pandemic will be the biggest factor influencing the market behaviour.
Fear index jumps 27%
Maruti Suzuki off day's low
AGR woes: No decision on relief to telcos as DCC seeks more details
The crucial meeting of Digital Communications Commission (DCC) on Friday could not arrive at a decision on relief to the distressed telecom sector and more details are required for reconciliation of AGR data, sources said. The DCC meeting lasted two hours and is expected to meet again in coming days, the sources said. READ MORE
Bandhan Bank stock nears all-time low, slips 27% thus far in 2020
Shares of Bandhan Bank slipped 7 per cent to Rs 370.60 on the BSE on Friday, thus erasing entire gain recorded since Tuesday after the Reserve Bank of India (RBI) lifted restrictions placed on the bank from opening new branches. The private sector lender's stock was quoting close to its all-time low of Rs 369.15, touched on October 16, 2018. The bank issued shares at Rs 375 per share in its initial public offer (IPO) and debuted on the bourses on March 27, 2018. READ MORE
European markets open lower
European shares dove 3% on Friday, sliding deeper into correction territory, as investors feared a global recession is on the horizon with the coronavirus spreading across the world.
The pan-regional STOXX 600 was on track to record its biggest weekly decline since the height of the global financial crisis in 2008. The index entered correction levels on Thursday, a 10% decline from its recent peak, along with markets in the United States and Asia.
Use market meltdown to buy fundamentally sound large-caps
As of now, Indian market seems quite insulated from the health scare, as there has not been any serious cases of coronavirus here. That said, in case the virus does hit India, it will be a huge setback. The virus has already spread to 44 countries. READ MORE
Pfizer warns of hit to financial results on continued coronavirus outbreak
Pfizer Inc on Thursday warned that the continued spread of the coronavirus globally could have an adverse impact on its business and financial results. The outbreak could have an impact on the company's manufacturing, supply chain and clinical trial operations, Pfizer said under the risk factors section of a regulatory filing. READ MORE
Global markets have come under pressure over the past few days as the Novel Coronavirus (Covid-19) has now spread beyond mainland China. Number of cases in South Korea, Italy and Iran have increased sharply over the past few days leading to a fear that the world could be on the verge of a global pandemic. US two-year and 10-year bond yields have also dropped sharply over the past few days to ~1.1% and 1.3% respectively and are now well below the overnight rate of 1.625% which signals that the markets are concerned about a slowdown in the global economy due to the coronavirus and expect the Fed to cut rates.
We expect central banks globally to infuse liquidity in the coming weeks in order to support the economy. As per medical scientists, the coronavirus should get contained with the onset of summer in most countries given that warm weather is not conducive to the spread of the virus. Therefore, we expect markets will recover once the worst of the coronavirus outbreak is behind us supported by global liquidity though there could be some more volatility in the interim period
NEWS ALERT | Motherson Sumi declares interim dividend of Rs 1.5 per share
MARKET CHECK | Top 5 gainers on the BSE at this hour
NEWS ALERT | DCC meeting on telecom sector concludes; no decision yet: CNBC TV18
-- DCC keen to review more data; meet inconclusive
MARKET COMMENT :: Praveen Khandelwal – General Secretary of Confederation of All India Trade (CAIT)
"Bilateral trade ties between India and China are far more extensive and wide-ranging than generally understood. Dependence on China for supplies spans across sectors and sub-sectors, and in many cases is as high as 60 per cent. On-ground situation indicates that normalization of trade can take at least six months. Industry participants have sought support from the Indian government (in terms of credit, technology, logistics, etc.) to unclog bottlenecks in the supply chains by building a formidable alternative to Chinese supplies."
BUZZING STOCK:: Shriram City Union Finance gains 2% in a weak market
Nifty Metal index set for biggest weekly fall since October 2008
The Nifty Metal index is set for its biggest weekly fall in more than a decade as shares of metal companies remained under pressure on Friday on concerns of demand slump due to the coronavirus outbreak in top consumer China. At 11:19 am, the Nifty Metal index, the top loser among sectoral indices, had slipped 6 per cent. READ MORE
MARKET COMMENT | Rusmik Oza, Sr. VP (Head of Fundamental Research-PCG), Kotak Securities
As the corona virus is spreading across the countries, the fear factor in markets is going up. Till the time the coronavirus was contained in Mainland China there was compliancy in global equity markets but now as more cases are getting reported in various countries the impact is sharper. The fall in Nifty-50 got accentuated after it broke the 200 DMA placed at 11,685 and since then it is following the developed markets. During past instances like coronavirus, markets fell gradually and recovered gradually. This time the fall has been vertical and that too in a matter of few days. Going by past precedencies, the recovery in markets (post containment of such epidemics) is equal or higher than the fall. As the fall has been too-fast-too-soon, markets have gone into oversold zone (i.e. RSI of Nifty-50 has gone to 25 level). Since the risk-reward ratio has turned favorable for the market, it is ideal to accumulate stocks keeping in mind the downside of 11,000 for Nifty-50.
Nifty Bank index falls over 1,000 pts
Sector watch | Nifty Metal index set for its biggest weekly fall since October 2008
Broader markets underperform benchmarks
MARKET COMMENT :: Umesh Mehta, head of research, Samco Securities
From extreme calmness to extreme pessimism, D-Street is also a victim of the virus outbreak in other countries. This pandemic led to indices across the globe to witness a sharp fall this week. However, when the entire world is blaming coronavirus for the fall, we feel that valuations have a big part to play in this bearishness. Back in 1918, during the outbreak of Spanish flu, Dow Jones didn’t correct instead it steadily moved up. This was only because before the epidemic broke out, World War I had already led to a massive decline in the markets. Due to the valuations being at reasonable levels, despite the epidemic, markets improved.
India is currently experiencing a similar yet opposite scenario. Indian bourses have been trading around higher valuations and hence a correction was needed to align the markets as per the mean reversion theory. Hence, this week’s fall is a valuation play with coronavirus as the scapegoat. Investors should not burn their hands by selling in this fall. Rather, they should slowly and steadily pick reasonably valued quality stocks in a SIP format as every dip becomes a good buying opportunity
Rupee Alert | Currency trading near 6-month low
Source: Bloomberg
MARKET UPDATE:: Sensex extends fall, down 1200 pts now
Investors lose Rs 11.4 trillion in 6 days; selling overdone, say analysts
“Indian markets have been following the global trend and I don’t think there is any issue here right now as regards coronavirus. On the contrary, we are better-off with the energy and commodity prices falling. However, we will be hugely vulnerable if any such cases were reported in India. That said, there is no other catalyst as well that can hold up the markets. If one is convinced about the long-term prospects, this is the time to buy fundamentally sound companies,” says Jigar Shah, chief executive officer at Maybank Kim Eng Securities. READ MORE
Valued at nearly 43x P/E (trailing) and 41x (based on H1FY20 annualised EPS), analysts see the valuation of the credit card issuer as aggressive when compared with peers. They, however, believe that the stock commands the premium valuation given its strong financial track record, goodwill associated with its parent company – State Bank of India (SBI), and strong distribution network. Nearly all of them have assigned it a ‘subscribe’ rating. READ MORE
STOCK ALERT :: 28.5% equity of Adani Gas trade on NSE & BSE
>> 28.5% is 31.3 cr shares of Adani Gas
>> Shares trade for Rs 3,250 cr, at Rs 126.50/sh
>> Total likely to have bought stake in the gas co, reports CNBC TV18
Amid economic slowdown, volume recovery key for pricey Page Industries
The Page Industries (Page) stock has lost 16 per cent in a month, compared to a 3-4 per cent decline in the Nifty FMCG and the Sensex during the same period. Concerns over volume recovery, after a feeble December quarter (Q3), has seen analysts cut their FY21 earnings estimates by 10-16 per cent. READ MORE
Sebi wants MFs to be agile in stress events, warns industry on mis-selling
The Securities and Exchange Board of India’s (Sebi’s) whole-time member G Mahalingam on Thursday pointed out that the risk-management practices of the Rs 27-trillion mutual fund (MF) industry can improve further. He urged MFs to create a framework that makes them gauge liquidity risks in a timely manner and mitigate liquidity pressure during stress scenarios. READ MORE
NEWS ALERT | Voda Idea moves Supreme Court on spectrum levy: Bloomberg
>> Apex court to hear plea next week
Bloodbath on Dalal Street erodes nearly Rs 5 trillion investor wealth
Domestic investor wealth plummeted by nearly Rs 5 trillion on Friday as equity markets crashed tracking global equity selloff amid rising uncertainty over the economic impact of coronavirus outbreak. Market capitalisation (m-cap) of BSE-listed companies saw a massive decline after the 30-share index sank 1,100.27 points, or 2.77 per cent, to 38,645.39, and the NSE Nifty cracked 329.50 points, or 2.83 per cent, to 11,303.80. READ MORE
MARKET OUTLOOK :: S&P Global Platts
The rolling geographic nature of the virus’s spread means its duration could be extended into the second quarter. Global oil demand is estimated to grow 0.86 million barrels per day (MMB/D) in 2020, lowered by a massive 0.47 MMB/D vs last month. A vast majority of downward revisions are in China and Asia. Reductions to air and ground transportation in China have badly hit demand for gasoline, diesel and jet. Cancelation and suspension of flights in and out of China also hit jet demand in many other countries.
Nifty IT index tumbles over 4%; Mindtree, Tech Mahindra among top losers
Equity market was deep in the red on Friday, in line with global peers, as the rapid spread of coronavirus spooked investor sentiment. Information Technology (IT) shares were among the most hammered lot as the Nifty IT index slipped over 4 per cent or over 550 points. At 10:18 am, index constituents Tech Mahindra, Mindtree, Infosys, Tata Elxsi, and Wipro were trading over 5 per cent lower. In comparison, the benchmark Nifty was trading 337 points or around 3 per cent lower at 11,296 levels. READ MORE
MARKET OUTLOOK :: Morgan Stanley
With the Covid-19 outbreak continuing and quick normalisation of China's production looking unlikely, we see AxJ 1Q20 GDP growth slowing to 3.7 per cent YoY- 4.1 per cent YoY from 5.1 per centYoY in 4Q19. Both fiscal and monetary easing are underway, with the 2020 AxJ fiscal deficit expected to widen to 8.4 per cent of gross domestic product versus 7.8 per cent in 2019. We expect AxJ central banks to ease cumulatively by between 0-50 basis points this year.
From economy to markets, here's how brokerages assess coronavirus impact
Fears of coronavirus (COVID-19) getting a tighter grip over most countries has triggered a panic across financial markets over the past few weeks. Most analysts have trimmed their growth forecast for the global economy, financial markets have been rattled by the developments. Global share prices headed for the worst week since global financial crisis (GFC) in 2008 as investors braced for the coronavirus to become a pandemic and rapidly spread around the world. READ MORE
Tata Motors plunges 10% on reports of CCI probe, coronavirus woes
Shares of Tata Motors tumbled 10 per cent to Rs 130.50 on the BSE on Friday on reports that the Competition Commission of India is examining allegations that the company and two finance firms of its $100 billion parent group abused their market position while selling commercial vehicles. Besides, heavy selling was seen at the counter as concerns on China-originated coronavirus becoming a pandemic soured sentiment. READ MORE
MARKET OUTLOOK | Credit Suisse
Financial markets will go through a period of heightened nervousness that could continue for several weeks or even months. During that period, we expect further drawdowns, but also rebounds, for instance should monetary or fiscal policy measures be announced to offset the economic impact. What is important for the longer-term orientation of portfolios is that we think that the global economy will face a slowdown but will be able to weather this blow. The near-term economic damage will cause companies to revise down earnings guidance, as we have seen in the case of Apple, for example.
MARKET CHECK:: Sensex continues to trade over 1,000 pts lower
ICICI SECURITIES ON SBI CARDS IPO
SBIC offers investment opportunity in unique business model with strong profitability. Sustainability of higher business growth and strong return ratios (sustained RoA >4% & RoE~28%) justifies premium valuation for the business. Therefore, we recommend a SUBSCRIBE recommendation on the stock. At higher end of the price band of Rs 755, the stock is available at a P/E of ~46x (annualised on post issue basis) and P/BV of ~13.5x (post issue).
MARKET OUTLOOK | Christopher Wood, global head of equity strategy at Jefferies
The Coronavirus continues to drive market sentiment, with “risk off” triggered by the spread of the disease outside China and Asia. The obvious risk for Wall Street-correlated world stock markets is that the virus spreads more overtly into North America. Clearly the hope and indeed still the base case is that the virus, which appears to be an extreme form of viral flu, will burn itself when the weather changes as was indeed the case with Sars.
The overall evidence points to a more significant hit to economic activity in the near term: the risk of a deeper-V in Q1-2020 and of the growth slowdown spilling into early Q2. We have already lowered our Q1 GDP growth forecast for Asia ex-Japan to 3.1 per cent y-o-y, from 5 per cent in Q4, and we expect GDP growth to average 4.9 per cent y-o-y in 2020 versus consensus expectations of 5.1 per cent. READ MORE
MARKET UPDATE:: Indices extend fall, Nifty below 11,300; India VIX up 21%
Contribution to S&P BSE Sensex's fall today
Nifty Bank index falls over 700 pts
Broader markets underperform; S&P BSE Small-cap index down nearly 3%
HPCL hits 52-week low
ONGC slides nearly 4%
State-owned Oil and Natural Gas Corp and its subsidiary Hindustan Petroleum Corp Ltd have bought out lenders in Petronet MHB Ltd, the firm that owns a petroleum product pipeline in Mangalore, for about Rs 371 crore.
Vodafone Idea trades over 1% higher
>> Vodafone Idea has demanded fixing minimum tariffs for mobile data at Rs 35 per GB, around 7-8 times of current prices, and for calls at 6 paise per minute along with monthly charges from April 1 to enable it pay statutory dues and make its business sustainable.
Reliance Industries declines over 3% in early trade
Petronet LNG skids 3%
>> Petronet LNG, the country's largest importer of liquefied natural gas (LNG), is looking to buy the super-chilled fuel through a long term contract starting from 2024, according to a document reviewed by Reuters.
Nifty PSB Index erases 3%
IndusInd Bank slips over 1%
Tata Motors tumbles over 4% on CCI probe
Sectoral trends at NSE during Opening trade
Top gainers and losers on S&P BSE Sensex during Opening trade
First Trade | Nifty tests 11,350
First Trade | Sensex tanks 1,000 pts
Market at Pre-open
Top gainers and losers on S&P BSE Sensex during Pre-open
Rupee opening
Rupee opens weaker at 71.93/$ vs Thursday's close of 71.55 against the US dollar
Market at Pre-open
Coronavirus epidemic poses a bigger risk to economy: ECB's Philip Lane
The coronavirus epidemic poses a bigger a risk to the economy the longer it is allowed to last, the European Central Bank's chief economist, Philip Lane, said on Thursday. READ MORE
Stocks to watch
Banks: The Reserve Bank of India (RBI) is worried over the fallout of the Supreme Court order on telecom dues and is watching industry developments closely, according to a report by business daily Mint.
IndusInd Bank: Private sector lender IndusInd Bank said on Thursday that it had appointed Sumant Kathpalia (pictured) the next managing director (MD) and chief executive officer (CEO) from March 24, for a three-year term. READ MORE
Coronavirus outbreak: Goldman Sachs Group sees gold hitting $1,800
Goldman Sachs Group boosted its gold forecast to $1,800 an ounce as the coronavirus, depressed real rates and increased focus on the US election continue to drive demand for the metal as a haven. The bank raised its 12-month projection by $200, and said “in the event that the virus effect spreads to Q2, we could see gold top $1800/oz already on a 3-month basis.”
Wall Street on record correction pace as Coronavirus fears intensify
While the indexes pared some losses, the S&P 500 fell as much as 11.2% from its record close and the Nasdaq dropped 12.2% from its own peak. At its session low, the Dow Jones Industrials declined 12.1% from its Feb. 12 closing high. READ MORE
Global shares head for worst week since 2008 crisis on coronavirus fears
Hopes that the epidemic that started in China would be over in a few months and economic activity would return to normal have been shattered, as new infections reported around the world now surpass those in China. READ MORE
Nifty outlook and top stock picks by CapitalVia Global Research: Buy SRF
Market traded lower for sixth consecutive trading session; Nifty needs to hold 11,500
Market traded lower on monthly expiry day as markets traded with high degree of volatility due to weaker global cues over coronavirus. The Nifty closed at 11,633.30, shedding 45.20 points. Media, PSU banks, and IT stocks traded with negative sentiments whereas Pharma and FMCG stocks traded with strength. Nifty bank closed at 30,187, slashing 119.85 points from the previous day’s closing. READ MORE
Commodity view by Bhavik Patel of Tradebulls Securities: Buy Gold, Copper
There is a high expectation that the US Fed will cut interest rate to cushion slowdown because of Coronavirus which is also positive for gold. We still believe gold is positive but overbought in short term so do not to take a fresh long position from here but let it come around to Rs 42,550 for fresh long positions. READ MORE
Derivatives strategy on Berger Paints by Nandish Shah of HDFC Securities
Bull Spread strategy on Berger Paints
Buy Berger Paint March 580 Call at Rs 14.50 & simultaneously sell 600 call at Rs 8.50
Lot Size: 2,200.
Rationale:
-- Long build-up is seen in the Berger Paints Futures where we have seen rise in Open Interest with price moving up by 1.70 per cent. READ MORE
>> Oil prices, meanwhile, tumbled on Thursday to their lowest level in more than a year. Brent crude dropped 2.3 per cent, to settle at $52.18 a barrel, off the session low of $50.97 a barrel, which was the lowest since December 2018.
SGX Nifty
>> At 8:10 am, the Singaporean Exchange for Nifty Futures was at 11,398, down 211 points.