Indian Share Market hit by Coronavirus spread, Market uncertainty to remain next week.

 

It was a bloodbath on Dalal Street on Friday. The week closed on a negative note after the sharp fall on the last day of the month. Indian share market is now under full control of bear grip. The market is falling consecutively for six days due to the rising cases of coronavirus worldwide.

The fresh number of coronavirus cases were also found in China last week. Other than China, South Korea, Italy, Iran, Nigeria, Japan, and New Zealand are some other countries where Coronavirus cases were reported. The increasing fresh cases other than China, increasing fears of a pandemic making investors jittery last week.

Though the Indian share market is not directly affected due to coronavirus, it is falling due to the fear of spreading the virus worldwide and global economic slowdown. The barometer of fear in the markets India VIX has spiked to 23% now.

The worldwide markets have seen a record fall in the last week and Indian indices have followed the same. In India, FIIs/FPI have offloaded more than Rs 10000 crores in the last week. Some cautiousness also crept in among the investors/traders after the economist said that the Gross Domestic Product (GDP) growth rate is likely to be flat in the Q3FY20.

Yesterday, after the market the GDP number for the Q3FY20 was announced and it grew 4.7%. The previous quarter has been revised to 5.1%, the GDP for the year is now seen at 5%. Finance Minister Nirmala Sitharam said ‘steadiness’ is a good sign immediately after the GDP number announced.

 

Indian share market indices on a weekly basis:

On a weekly basis, the Nifty50 index was down 879.1 points or 7.33%  and at 11201.75 while Sensex tanks 2872.83 points or 7% closed at 38297. 29. The Bank Nifty has plunged 1795.7 points or 5.8% closed at 29147.15.

The Nifty midcap 100 index declined 1323.5 or 7.35% on a weekly basis and closed at 16786.35. The Nifty smallcap 100 index also plunged 486.95 or 7.98% and closed at 5675.05.

There are no gainers in the Indian share market on a weekly basis in the Nifty50 index. The losers for the week are Vedanta, Tata Motors, Hindalco, JSW Steel, and Tata Steel. The top losers mentioned declined 13 to 20% in the last week.

In the Nifty midcap 100 index, there are only three gainers for the week Max Financial, Pfizer, and V-Guard. The losers in the midcap index are Future Consumers, Indiabulls ventures, Prestige Estate, Jindal Steel, Sterlite Tech. These shares fell between 18-40% in the last week.

In the Nifty smallcap 100 index, the gainers for the last week were India Cement, DHFL, Suzlon Energy, Century Ply, Metropolis Health and the losers were Dish TV, Avanti Feeds, Lemon Tree Hotel, Venky’s, and First Source Solutions. The losers fell between 17-26% in the last week.

The major losers in the Nifty sectoral indices in the last week were Metals, Media, Automobiles, Banking & Finance, IT & Software, and Pharma. These sectors fell between 9-14% in the last week.

The FIIs/FPIs are the seller and DIIs were the buyers in the Indian share market last week. FIIs/FPIs sold Rs 11386.67 crores and DIIs bought Rs 15985.82 crores in the cash segment last week.

 

Stocks in the news

Bharti Infratel has extended its deadline for its merger with Indus Tower for two more months to 24th April.

The Hindustan Unilever’s (HUL) board of Directors has given the approval to form a new firm which would be 100% subsidiary of the HUL. The authorized capital of the company would be Rs 200o crores.

The Board of Axis Bank has given go-ahead for the appointment of Shri Puneet Shorma as the Chief Financial Officer (CFO) and key managerial personnel of the Bank with effect from 6th March 2020.

The US Drug regulator has successfully completed the audit at Dr. Reddy’s Telangana unit and issued no Form 483 at the closure of the audit.

The Larsen & Toubro (L&T) construction arm has got an order from prestigious clients for its various businesses in India and abroad. 

Damani brothers Radhakrishnan and Gopikrishan Damani raised their stake in Indian Cement last week. India Cement was the top gainers in the Nifty smallcap index last week amid a market crash.

NTPC has decided to start commercial operation of Thermal Power unit 250 MW unit of Barauni Thermal Power station Stage II ( 2x 250 MW) is declared on the commercial operation.

 

Derivative segment last week

On a monthly basis, the Nifty futures in February series closed 471.95 points down or 3.90% whereas the Bank Nifty declined by 352.55 points or 1.15%.

On February 28th end week, Nifty futures opened at 11950.65, it has touched a weekly high at 11969.75 on 24th February and a weekly low at 11116.65 on 28th February. The Nifty futures on 28th February closed at 11158. On a weekly basis, the Nifty futures has given a movement of 853.1 points.

The Bank Nifty futures on 28th February end week opened at 30615, it has touched a weekly high at 30688.80 on last Monday 24th February and touched weekly low at 28970.15 on 28th February and closed at 29091. On a weekly basis, the Bank Nifty futures has given a movement of 1718.7 points.

 

Next week’s event in the Indian share market

Next week, the Indian share market will react to the GDP numbers announced last Friday after the market hours. The Q3 FY20 GDP numbers came at 4.7% growth, the number is in line with the economist expectations. Monday we may see some positive sentiments in the market for the steadiness of GDP numbers.

The global cues will play an important role in the market next week. Traders need to track news on coronavirus, any positive development can cheer the market and vice versa.

The monthly auto sales numbers will be announced on Monday, we can see some movement in the auto sectors depending on their sales figure.

On Monday 2nd March, Markit Manufacturing PMI number will be announced at 10.30 am. The January Manufacturing PMI rose 55.3 compared to 52.7 in the previous month. The increase in Manufacturing PMI numbers can create a positive sentiment in the market on Monday morning.

On Wednesday 4th March, the Markit Service PMI numbers will be announced.

Traders need to track the crude oil prices and rupee movements next week. The demand for crude oil prices has dropped precipitously as global demand weakens due to coronavirus outbreak outside China. The Indian rupee also weakens due to the coronavirus outbreak outside China.

 

Technical outlook

Technical levels of Nifty and Bank Nifty future for the next week

Primary Trend Nifty Futures: down

Range-Bound Trend of Nifty Futures: Nifty future will range from 10800 – 11330 during the week 

Primary Trend of Banknifty Future:  down

Range-Bound Trend of Bank Nifty Future: Bank Nifty future will move in the range of 28200- 30250 during the next week

 

Crude and Rupee updates

Crude oil is trading lower due to fear of spreading coronavirus other than China. The crude oil prices declined more than 13% in the last week as the investor worries that the virus outbreak will become pandemic which could threaten the global recession. 

The Brent crude oil future is trading at $50.08 per barrel. Last week Indian rupee closed at Rs 72.22 against the US dollar.

 

Conclusions

Indian share market will remain uncertain as long as there is negative news on coronavirus. Though India is not affected by the virus directly. The global market sentiment is negative due to its impact on economic growth and the Indian share market followed the same. 

The market sentiments will improve only if there is any positive development in reducing cases of coronavirus. The improved macro data will play a very limited role to keep the market sentiments upbeat.

So traders are advised to track the news on coronavirus and closely follow the global markets for trading. Traders should put a strict stop loss while trading in the market.

 

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Happy Investing!!

Editor’s Desk