Post Sensex bloodbath on Budget day, stocks may open on a negative note

It was a massacre on D-Street as the capital markets and investors were disappointed by the Budget 2020. Barring IT, all the sectoral indices ended with deep cuts. Over the weekend, the market participants must have gone through the fine print of the Budget 2020 and it would be important how the market participants react on Monday. The rapidly spreading of coronavirus would be a major cause of concern for the market participants. Indian markets are expected to open negative as the global cues are depressing and the overall sentiment in the domestic area is also negative.  

Asian markets are in a sea of red on Monday as the overall death toll due to coronavirus has jumped over 300. The main focal point in the Asian markets was China’s stock market as China’s Shanghai Composite is trading at staggering 7.68 per cent down. China’s markets had been closed since January 23 for Lunar New year holiday, and the government officials extended that closure amid an ongoing virus outbreak. People’s Bank of China announced on Sunday that it will inject 1.2 trillion Yuan of liquidity into the markets via open market reverse repo operation as part of an effort by regulators to soften volatility. Japan’s market Nikkei 225 is down by almost a per cent and Hong Kong’s Hang Seng has lost about 0.5 per cent.  

Back home, the stock markets plunged sharply on Saturday as the market participants who were hoping for a major fiscal stimulus in the Union Budget 2020 to spur growth, were left thwarted as Budget 2020 failed to provide any effective fiscal stimulus to revive economic growth. By the day’s end, the bellwether Sensex was down by almost 988 points or 2.43 per cent and Nifty fell 300 points or 2.51 per cent. Fall was severe in the broader markets as Nifty mid-cap and small-cap index nose-dived 2.75 and 2.92 per cent, thereby underperforming the frontline gauges. On the sectoral front, barring Nifty IT, all other sectoral indices ended with a deep cut. Nifty Realty was down by a staggering 8.16 per cent followed by Nifty Media and Nifty PSU Bank, which were down by 4.49 and 4.04 per cent, respectively.

On Friday, US markets ended lower amid concern about the coronavirus outbreak.