Market Ahead, March 20: Top factors that could guide markets today

Coronavirus continues to remain the big focus for global markets which on Thursday took a pause from the recent fall as many countries stepped up their efforts to contain the economic costs of the virus.  The US Federal Reserve opened swap lines with central banks in nine new countries to ensure the world's dollar-dependent financial system continued to function.
 

In light of these measures, US stocks managed to post gains on Thursday. The Dow Jones rose 0.95 per cent and the S&P 500 gained 0.47 per cent. Tech-heavy Nasdaq Composite added jumped 2.3 per cent.

Asian shares sought a reprieve on Friday as Wall Street eked out gains. South Korean shares bounced 2.6 per cent, MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.6 per cent, while Australia rose 2.9 per cent. Japan's Nikkei went the other way and dipped 1 per cent.

The overall risk from the coronavirus, however, continues to remain elevated. In a report yesterday, Bank of America Securities warned that the coronavirus-hit US economy has already sunk into recession, though they expect to see a bounce back in the third quarter. The research firm expects massive job losses and a contraction of 0.8 per cent in GDP.

Back home, Prime Minister Narendra Modi yesterday addressed the nation and appealed to people to practice social distancing. He also announced the setting up of a COVID-19 economic response task force to gauge the economic impact of the pandemic and take suitable steps.

According to a Business Standard report, the government is considering relaxation of asset-classification norms by banks, thus allowing companies to delay the repayment of loans, and tax holidays for the worst-hit sectors like aviation and hospitality. Besides, other media reports suggest that the government may also consider cash-transfer scheme for the unorganised sector.

On the Dalal Street, Sensex yesterday dropped a further 581 points to settle at 28,288 while Nifty plunged 205 points to close at 8,263. According to experts, the Nifty could find some solace around 7600 however it could be a temporary relief, given the prevailing negative sentiment. The SGX Nifty indicated a flat to negative start for Sensex and Nifty today.

Besides, the Rupee's trajectory will also remain a big focus in today's session after plunging 84 paise to a new record low of 75.10 against the dollar on Thursday.

In commodities, oil prices shot up 25 per cent overnight with Brent crude price at $28.46 per barrel.