Hope of revival after a crash!
If we analyse the last few trading sessions, it seems that Indian market has eventually started to panic about the growing severity of Coronavirus after weeks of escape. The quantum of sell-off in the last trading session was severe with all Nifty50 stocks that ended the day in red, which is very rare and all sectoral indices witnessed a heavy selling pressure. The market participants were freighted after Coronavirus cases in Italy skyrocketed as well as some new cases in Middle East, in countries like Iraq added concern about the outbreak escalating into a pandemic. SGX Nifty on Tuesday is indicating a green start as it is trading higher by 74 points at 11,895 levels. But we believe a sell on rallies is likely to be the mantra of the day.
Asian markets are giving a mixed signal on Tuesday. Japan’s stock market-Nikkei 225, which resumed trading after a long weekend, has slid about three per cent as it is adjusting to the rout, seen on Monday while, Hong Kong’s Hang Seng is trading with miniscule gain of 0.15 per cent. China’s Shanghai Composite was down by 0.86 per cent.
Back home, on Monday, the key benchmark indices started off the session with a gap down and thereafter, it consolidated a bit. However, in the second half of the trading session, as European markets opened, the key benchmark indices collapsed like a pack of cards and ended the session near the day’s low with cuts of almost two per cent. Nifty settled at 11,829 and BSE Sensex closed at 40,363. The broader markets- Nifty Mid-cap and Small-cap too fell almost in-line with benchmark indices losing around 1.91 and 1.92 per cent, respectively. All the sectoral indices ended in red. Nifty Metal and Nifty Auto declined the most.
In overnight developments, US stocks nosedived on Monday, as more cases of the deadly Coronavirus were reported in Italy, South Korea and Iran. Dow recorded a four digit fall and it erased its gains for the year in this 1,000 points plunge. Nasdaq plummeted 3.7 per cent and S&P 500 tumbled 3.2 per cent. European markets plunged alongside US markets. Meanwhile, South Korea announced that it has raised its virus alert to the highest level, while Italy became Europe’s focal point for Coronavirus cases.