As the world economies grapple with the fallout of coronavirus, assurance from the World Bank and the International Monetary Fund that the two are ready to help member countries address the consequent human and economic challenge, including through emergency funding, could provide some support to the markets in today's trading session.
The outbreak is plunging the world economy into its worst downturn since the global financial crisis more than a decade ago, the Organization for Economic Cooperation and Development warned on Monday. Gauging the impact, it lowered India’s GDP growth forecast to 5.1 per cent, from its earlier projection of 6.2 per cent, for 2020.
However, Global shares and oil prices bounced on Tuesday after the European Central Bank on Monday joined the chorus of central banks signalling a readiness to deal with the growing threats from the outbreak.
Japan's Nikkei jumped 1.6 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8 per cent. South Korea's Kospi added 2.4 per cent and Australian shares advanced 1.8 per cent ahead of an expected rate cut by the Reserve Bank of Australia.
On the Wall Street, the Dow Jones, up 5 per cent, wrapped up its strongest one-day gain since 2009, while the S&P 500 (4.6 per cent) and the Nasdaq Composite (4.49 per cent) each had their strongest one-day rise since December 2018 during the overnight trade on Monday.
Back home, market participants hit sell button during the last hour of the session on Monday after two new COVID-19 cases were detected in Delhi and Telangana. Later, a third in Rajasthan was detected, taking the total number of cases in the country to six. The S&P BSE Sensex tumbled over 900 points from the day's high to settle at 38,144, down 153 points, or 0.4 per cent. On the NSE, the 50-share Nifty index ended at 11,133 points, down 69 points or 0.62 per cent.
According to analysts, Bears are penetrating deeper into the bull's territory which is resulting in poor market breadth and spike in the volatility index. For Nifty, the resistance is seen near the 11,210-11,300 zone, while 11,000 will act as a support. For today, SGX Nifty, the Singaporean Exchange for Nifty Futures, is indicating a flat start for the indices.
That apart, today is the second day for SBI Card's IPO. Despite the volatility in the market, the Rs 10,350-crore initial public offering of SBI Cards and Payment Services was off to a good a start on Monday. The share sale garnered 38 per cent subscription with the bulk of the bids coming from small investors, exchange data shows.
Read by: Kanishka Gupta
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