Weak start to a new fiscal year

Though the benchmark indices ended the last trading session of the fiscal year 2020 on a buoyant note but for FY20, Nifty50 was down by 26 per cent and Sensex ended lower by almost 24 per cent, recording their worst performance in over a decade. In 2008-2009, Sensex had registered a decline of 38 per cent, while Nifty had dropped 36 per cent amid global financial crisis. Meanwhile, foreign portfolio investors (FPIs) have pulled out approximately Rs 58,348 crore from Indian equities in March 2020; which is the largest monthly outflow as per the data available.

With the dawn of a new fiscal year, the market participants may be excited as India’s core industries output reached an 11-month high of 5.5 per cent in February may but at the same time, this excitement may fizzle out as positive cases of Coronavirus reached near 1,400-mark in India and the death toll in US has surpassed the official tally in China as reported by Media. With this landscape, SGX Nifty paints a gloomy picture and indicates a weak start for the domestic indices on the inaugural trading session of the new fiscal year. Today, auto stocks may remain in the limelight as the automobile manufacturers are likely to release their March auto sales figures.

Most of Asian stocks were trading lower on Wednesday, following negative leads overnight from Wall Street. Japan’s Nikkei 225 is down by 0.98 per cent and Hong Kong’s Hang Seng has slipped by 0.53 per cent while, China’s Shanghai Composite is trading almost unchanged.

Back home, the bulls bid farewell to the last trading session of FY20 on a blistering note as Nifty rose 3.82 per cent and BSE Sensex gained 3.62 per cent. For the FY20, Nifty reported a net loss of 26 per cent, while BSE Sensex dropped 24 per cent for the same period. In the broader markets, Nifty Mid-cap and Small-cap ended up by 2.25 and 3.07 per cent, respectively. On the sectoral front, all the indices closed in green wherein, Nifty FMCG, Nifty Pharma and Nifty Metals gained the most. 

On Tuesday, US stocks retreat as Goldman Sachs slashes Q2 US GDP estimates the world’s largest economy will shrink an annualised 34 per cent in the second quarter. On the economic front, US Consumer Confidence plunged in March but the reading was not as bad as the economists had expected. In the end, Dow plummeted 1.8 per cent, S&P 500 tumbled 1.6 per cent and the tech-heavy Nasdaq lost 1 per cent. Meanwhile, European markets ended on a positive note.