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Published on 13/04/2020 7:00:55 PM | Source: Motilal Oswal Financial Securities Ltd

Daily Market Commentary 13 April 2020 by Mr. Siddhartha Khemka, Motilal Oswal

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Below is the View On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

“Indian equity markets plunged today, tracking weak global markets and rising cases in India and the fears of lockdown getting extended in the country till the end of the month. Sensex fell 470 points to close at 30,690 level (-1.5%) while Nifty50 was down 118 points to close at 8,994 level (-1.3%). The overall market breadth was negative with Nifty Midcap 100/Nifty Smallcap 100 down 1.4%/0.5% respectively. All the sectors ended in red except Pharma and Metals which were up 2.8% and 1.9% respectively. Real Estate was the biggest loser, down 4.9%, followed by Media (-3.3%), Auto (-2.5%) and Bank (-2.1%). India VIX after cooling down for past few sessions, climbed up again today to 51 level (+3.3%).

 Top oil-producing nations reached an agreement on Sunday to cut crude oil output by 9.7 billion barrels to boost the plummeting oil prices. However, Brent oil prices turned negative today, after witnessing sharp recovery, pressured by concerns that the cuts will not be sufficient to reduce a glut as the coronavirus pandemic hammers demand.

 As global coronavirus cases exceed 1.8 million, the World Bank has warned that South Asia is on course for its worst economic performance in 40 years. Risk aversion has returned globally as US continued to report most number of active cases and deaths while Europe is seeing slower addition to cases/deaths. In India, the total cases have surpassed 9k mark while the death is more than 300. The Market participants are thus awaiting the outcome of PM Narendra Modi’s address to the nation on 14 April at 10 am.

 Sentiments remained subdued due to rise in COVID-19 cases in the country and fears of extended lockdown which led to sell-off and short-term profit booking. However, India is planning to partially open up some parts of the economy to offset the damage of the lockdown, with the Industries Ministry recommending restarting some manufacturing in the auto, textile, defence, electronics and other sectors. Thus the market would continue to remain volatile with swing on either side as it would track trend in coronavirus cases and developments around the opening up of economy in phased manner.

 Technically, Nifty faces key hurdle at 9400 while immediate support is inching higher to 8900 and then 8650-8550 zones.”

 

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