Global Market Plummets. Many are Finding Safe Zones.

IT, Pharma, Metal Stocks Push Markets to New Highs

Our Analysis

Indian markets are still under pressure as we can see every Coronavirus news is hammering equities. Stocks are falling like a house of cards. Investors are exiting stocks like anything here. Fundamentals and technical both are acting like spectators. On top of that, we are heading towards a financial year where we might see investors selling their portfolios loss-making stocks for tax purposes and then again prefer to buy them in the new financial year.

A fast-spreading coronavirus outbreak could knock $211 billion off the combined economies of the Asia-Pacific, with Japan, Hong Kong, Singapore and Australia among the most exposed. S&P cut its 2020 growth forecast for China to 4.8 percent from the previous estimate of 5.7 percent. It forecast Australian growth to slow sharply to 1.2 percent from an already below-trend 2.2 percent in 2019. Japan would take 0.5 percentage point hit and Korea a 1 percentage point knock. The balance of risks remains to the downside due to local transmission, including in economies with low reported cases, secondary transmissions in China as people return to work and tighter financial conditions.

Both on the domestic and global front, stocks have corrected significantly. We can take it as an opportunity to enter into those equities and make some bucks in a quick time if the market responded favorably. We need to be more cautious this time while picking the stocks as the entire basket of stocks are reacting negatively. Investors got to be patient in the virus affected market.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, panic started selling in the market. Sensex settled at 38,144, down 153 points. The Nifty index ended at 11,133 points, down 69 points or 0.62%.

2) On Tuesday, the market took some breather. Sensex rallied 480 points or 1.26% to settle at 38,623.70 while Nifty ended at 11,303, up 170.5 points or 1.53%.

3) On Wednesday, the market tumbled as cases of coronavirus rose to 28 in India. Nifty ended at 11,251, down 52 points or 0.46%.

4) On Thursday, worries of slowdown and coronavirus dragged the market. Sensex ended at 38,471, up 61 points or 0.16%. Nifty ended at 11,269, up 18 points or 0.16%.

5) On Friday, Nifty slipped by 279.55 points to 10989.45 while Sensex corrected by 893.99 points to 37576.62.

Broader Index & Global Market:

-Fears of coronavirus (COVID-19) getting a tighter grip over most countries has triggered 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.

-Asian shares struggled to find their footing and bonds held stunning gains, as an emergency rate cut from the US Federal Reserve seemed to stoke rather than soothe fears over the coronavirus widening global economic fallout. MSCIs broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, though most of the gains were confined to South Korea where the government announced a big stimulus package. A fast-spreading coronavirus outbreak could knock $211 billion off the combined economies of the Asia-Pacific, with Japan, Hong Kong, Singapore and Australia among the most exposed. S&P cut its 2020 growth forecast for China to 4.8 percent from the previous estimate of 5.7 percent. It forecast Australian growth to slow sharply to 1.2 percent from an already below-trend 2.2 percent in 2019. Japan would take 0.5 percentage point hit and Korea a 1 percentage point knock.

Movers & Shakers

Shares of YES Bank had a field day today as the stock ended 26 per cent higher at Rs 36.85 apiece on the BSE after news reports suggested the government has approved a plan for State Bank of India to lead a consortium that will buy stake in YES Bank.

Shares of Indian Hotels Company were trading lower for the fifth straight day, sliding 7 per cent to hit a 17-month low of Rs 115, in the intra-day trade on concerns of soft demand due to outbreak of coronavirus.

Key Market Drivers

  • Coronavirus concerns
  • Domestic Earnings

Event Watch

International:

  • Coronavirus concerns
  • Import Exports

Domestic:

  • Coronavirus concerns
  • Financial Year End

Stocks To Watch

Gail Ltd On Upside while, Indian Hotels Company Ltd on Downside.