More reasons to be cautious!

The bull camp would be bright-eyed and bushy-tailed this morning amid swing in the sentiments on Wall Street in overnight trade as Dow posted its second highest point gain ever and more than offsetting the steep losses posted on Tuesday. However, throwing cold water on the bulls is comments from IMF Chief Kristalina Georgieva that the new Coronavirus epidemic poses a “serious threat” and will slow growth in the world to below 2.9 per cent, posted last year. Further, the rise in number of Coronavirus infected patients is likely to keep the market participants on tenterhook. As a result, SGX Nifty is indicating a cautious start as it trades 30 points lower at 11,217 levels. Volatility is likely to remain elevated in today’s session as well.   

Asian markets on Thursday morning was flashing green, following strong leads from Wall Street. Japan’s Nikkei 225 has gained 0.80 per cent, Hong Kong’s Hang Seng is up by 0.61 per cent and China’s Shanghai Composite has added 0.64 per cent.

Back home, Wednesday’s session was a roller coaster ride for the markets. After starting the session on a positive note, the markets failed to hold gains and rolled over to losses after Union Health Minister said that the number of confirmed cases of Coronavirus in Indian have risen to 28. However, in the last hour of trade, the markets rebounded sharply and ended the day with modest losses. At the end of the day, Nifty dropped 0.46 per cent to 11,251 and BSE Sensex shed 0.55 per cent to 38,409 level. Broader markets witnessed an intense selling pressure, where Nifty Mid-cap and Small-cap plunged 1.59 and 2.04 per cent, respectively. Talking about the sectoral performance, barring Nifty Pharma and Nifty IT, all other indices ended in red with Nifty Media, Nifty Auto and Nifty Private Bank becoming the top losers.

US stocks ended Wednesday’s session firmly in positive territory while offsetting the steep losses posted in the prior trading session. The key catalyst for the bulls on Wednesday was that Joe Biden had a historic “Super Tuesday” crushing Bernie Sanders in the hope of winning the democratic nomination. Biden is seen as likely to be a much more pro-business president as Sanders. Towards the close, Dow jumped 4.5 per cent, S&P 500 skyrocketed 4.2 per cent and Nasdaq rallied 3.8 per cent. Meanwhile, European markets extended gains from previous on stimulus hopes.