Domestic barometers were trading near the day's low in afternoon trade as India looked set to extend a lockdown to contain the spread of the coronavirus, while a rise in oil prices also weighed on sentiment. The Nifty once again slipped below the 9000 mark.
At 13:30 ST, the barometer index, the S&P BSE Sensex, was down 497.53 points or 1.60% at 30,662.09. The Nifty 50 index was down 135.75 points or 1.49% at 8,976.15.
In the broader market, the S&P BSE Mid-Cap index fell 1.10% while the S&P BSE Small-Cap index shed 0.74%.
The market breadth was negative. On the BSE, 1069 shares rose and 1157 shares fell. A total of 190 shares were unchanged. In Nifty 50 index, 19 stocks advanced while 31 stocks declined.
Economy:
The Reserve Bank of India said in its Monetary Policy Report said, "Prior to the outbreak of COVID-19, the outlook for growth for 2020-21 was looking up. The COVID-19 pandemic has drastically altered this outlook. The global economy is expected to slump into recession in 2020, as post-COVID projections indicate."
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Meanwhile, India's economy was showing some signs of recovery, before the Covid-19 outbreak brought economic activity to a near standstill. India's Index of Industrial Production (IIP) rose 4.5% in February 2020 over last year, compared to an increase of 2% in January. Industrial production in February was the highest since July 2019. Mining and manufacturing grew at 10% and 3.2%, respectively during the month, while electricity generation rose 8.1%.
Stocks in Spotlight:
Bharti Airtel (up 5.56%), UltraTech Cement (up 4.79%), Larsen & Toubro (up 4.17%), Hindalco Industries (up 3.02%) and Sun Pharmaceutical Industries (up 2.76%) advanced.
Zee Entertainment Enterprises (down 10.64%), Bajaj Finance (down 9.56%), Bajaj Finserv (down 5.40%), Titan Company (down 5.07%) and Mahindra & Mahindra (down 4.85%) declined.
Coal India (CIL) rose 2.98% to Rs 144.95. Coal Minister Pralhad Joshi has reportedly written to chief ministers of all states asking them to not import the dry fuel and take domestic supply of fuel from state-owned CIL, which has the fossil fuel in abundance. The development comes at a time when there is a drop in power demand in the country in the wake of the lockdown imposed to contain the deadly coronavirus.
Tech Mahindra fell 3.90% to Rs 523.90. The IT firm said that it has changed some of the terms of its stake-acquisition deals with Zen3 Infosolutions (America) Inc and Cerium Systems. Company said that the Zen3 Infosolutions transaction is now expected to be closed by 15 April 2020, and $35 million will be paid at closing with a deferred payment of $4 million to be paid over two years. The balance $25 million will be paid over three years linked to financial performance, the filing added. Earlier, it had said the transaction is expected to close by 1 April 2020. Also, $42 million was to be paid at closing and the remaining $22 million was to be paid over three years linked to financial performance.
In the another development, company said that after modification, Tech Mahindra will acquire 51% of Cerium Systems upfront for enterprise value upto Rs 245 crore and balance 49% will be acquired over the next 3 years.
Dr Reddy's Laboratories jumped 4.80% to Rs 3791.95 after the company said its API manufacturing plant at Telangana received the Establishment Inspection Report (EIR) from the US drug regulator.
HDFC fell 2.23% to Rs 1664. People's Bank of China (PBOC) raised its stake in HDFC to 1.01% from 0.8%. The stake comprises 1.74 crore shares of the mortgage lender.
Global Markets:
European shares opened higher while most Asian stocks dipped on Monday after a landmark agreement by OPEC and its allies to slash output by a record amount failed to give investors any cause for lasting optimism as stay-at-home restrictions and closures tied to the coronavirus pandemic still weigh on the global economy.
Saudi Arabia and Russia reached agreement with other oil-producing nations on Sunday to cut output by 9.7 million barrels per day for the next two months, in an effort to stem a plunge in oil prices brought on by the coronavirus pandemic. OPEC+, a group that includes OPEC members as well as allied non-members like Russia and Mexico, finalized the deal on Sunday after days of marathon negotiations.
The agreement is massive, representing the largest slash to production in the history of OPEC. The cut is more than twice as large as the 4.2 million-barrel-per-day reduction the oil cartel made through a series of cuts during the 2008 financial crisis.
Oil prices jumped more than $1 a barrel on Monday, but gains were capped amid concern that it won't be enough to head off oversupply with the coronavirus pandemic hammering demand.
In US, stock markets were closed on Friday, 10 April 2020 on account of Good Friday. US indices closed out the trading week on a high note on Thursday as the U.S. Federal Reserve unleashed another program designed to buoy local governments and businesses crushed by massive closures to stem the coronavirus outbreak. The benchmark S&P 500 index posted its best weekly gain since 1974, in a holiday-shortened week, bolstered by early signs that the outbreak was hitting a peak as well as aggressive global stimulus.
Under the Fed's $2.3 trillion package, the U.S. central bank said it would work with banks to offer four-year loans to companies of up to 10,000 employees and directly buy bonds of states and more populous counties and cities. The European Union also followed the US with its own rescue package worth 500 billion euros ($550 billion) to ease the impact of Covid-19 in the 27-nation bloc.
Investors appeared to shrug off another 6.6 million jobless claims, to focus on the Federal Reserve's announcement of new efforts to help fix parts of the financial market and economy debilitated by the coronavirus shutdowns.
In other U.S. data, the preliminary reading of the consumer-sentiment survey sank to 71 in early April from 89.1, marking the biggest-ever one-month decline and putting the index at lowest level since 2011, the University of Michigan said Thursday.
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