Market Ahead, April 16: Top Factors That Could Guide Markets Today

Most of the global indices and futures are in the red zone this morning. The SGX Nifty is down about 70 points from yesterday's close of Nifty futures, so the Indian indices are looking at a potential lower start today. 

This is in line with the trends on the Wall Street where stocks fell overnight amid dismal economic data and first-quarter earnings. US retail sales plunged 8.7 per cent in March and manufacturing output dropped by the most in over 74 years.

As a result, the Dow Jones Industrial Average fell 1.86 per cent, the S&P 500 lost 2.2 per cent, and the Nasdaq Composite dropped 1.4 per cent.

Asian indices followed US' lead. Japan's Nikkei, Australia's ASX, and Hong Kong were all down over 1.5 per cent in Thursday's early deals while South Korea's Kospi was down half a per cent.

In commodities, expectations that a recession will depress demand for oil pushed crude prices to 18-year lows overnight. Brent crude was last down 5.4 per cent at $28 a barrel.

Now, lets move on to the major developments and headlines traders will react to today.

The Union Health Ministry has identified 170 districts as Covid-19 hotspots and 207 districts as potential hotspots. According to Worldometer tally, India had over 12,000 cases and 400 deaths. The government yesterday allowed opening up of some industries in rural areas after April 20 to reduce the distress caused to millions of people because of the lockdown.

Macro data have already started showing distress signals. Data released yesterday showed that India’s exports contracted by 34.5 per cent in March to $21.4 billion to record the steepest monthly fall in at least 25 years as overseas demand remained lacklustre due to the coronavirus pandemic.

India’s quarterly corporate earnings season kicked off yesterday with Wipro which posted muted growth in its revenue and profit numbers for the fourth quarter of the last financial year, as the ongoing Covid-19 crisis created disruption in both the operation and demand fronts. Quite significantly, the company refrained from giving any revenue guidance for the first quarter of FY21 citing the uncertain market conditions caused by the coronavirus pandemic.

Today, another tech giant Tata Consultancy Services is scheduled to release its March quarter numbers and analysts see some erosion in the company's revenue due to the nationwide lockdown while the Covid-19 outbreak is expected to impact most of the company's verticals.

Meanwhile, the International Monetary Fund has urged India to keep its fiscal deficit concerns aside and spend to tackle the Covid-19 impact.

Indian stocks fell on Wednesday. The Sensex declined 1 per cent to end at 30,380, while the Nifty dropped 0.8 per cent to close at 8,925.  According to analysts, open interest data shows that Nifty would face stiff resistance at 9,000 while 8,500 will act as support. Therefore, traders should try to create short position keeping a close eye on 9,000.

Read by: Kanishka Gupta