June 20, 2024


Delighting finance buffs

Stocks languish as macro risks pile up; banking, financials lead fall

Equity benchmarks reversed early gains to finish in the negative territory on Wednesday as risk-off mood prevailed amid grim prognoses of the economic fallout of the Covid-19 pandemic.

Weak global markets and the rupee plunging to its all-time low against the dollar further weighed on sentiment, traders said.

After gyrating over 1,346 points during the day, the 30-share BSE Sensex ended 310.21 points or 1.01 per cent lower at 30,379.81.

Similarly, the NSE Nifty settled 68.55 points, or 0.76 per cent, down at 8,925.30.

Kotak Bank was the top loser in the Sensex pack, cracking 6.23 per cent, followed by Hero MotoCorp (4.83 per cen), Bajaj Finance (4.63 per cent), HDFC (3.61 per cent), HDFC Bank (3.57 per cent) and Maruti Suzuki (3.55 per cent).

On the other hand, HUL, HCL Tech, ITC and Nestle India were among the gainers, rising up to 6.07 per cent.

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.

The IMF on Tuesday slashed India’s projected GDP growth to 1.9 per cent in 2020 from 5.8 per cent 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.

Meanwhile, the government on Wednesday said industrial units in rural areas will be allowed to function from April 20, provided they follow social distancing norms, while all kinds of public transport will be barred and public places closed till May 3.

“There may be greater clarity for the market participants as the details of the limited relaxation of the lockdown rules are announced by the state governments. But the volatility in the markets may stay with us till the trajectory of growth and price level becomes less uncertain,” said Joseph Thomas, Head of Research – Emkay Wealth Management.

Analysts also said the focus will now also shift to the earnings season and the management commentary on the impact of Covid-19.

“Almost all sectors have been affected by the lockdown and the market will try to measure the future financial impact of this, rather than focusing on the previous quarter numbers. This is expected to drive stock specific moves in the market in the coming days.

“IT companies will officially kick off the earnings season and investors will be keen on how the virus spread has impacted their services and the locations in which those services are offered,” said Vinod Nair, Head of Research at Geojit Financial Services.

BSE bankex, finance, energy, auto and consumer durables indices ended up to 2.49 per cent lower, while FMCG, basic materials, realty, capital goods and metals gained up to 4.33 per cent.

Broader BSE midcap and smallcap indices rose up to 1.32 per cent.

On the currency front, the rupee tumbled 17 paise to close at an all-time low of 76.44 (provisional) against the US dollar.

Brent crude futures, the global oil benchmark, slipped 4.43 per cent to USD 28.29 per barrel.

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.

Global tally of the infections has crossed 19 lakh, with over 1.2 lakh deaths.

ALSO READ: Coronavirus: Dollar gains as global economy braces for further virus fallout

ALSO READ: Coronavirus: IMF says global economy on track to shrink by 3{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} in 2020

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