Benchmarks Sensex and Nifty closed lower on Tuesday in line with global peers. Traders said indices erased losses as investors anticipated positive announcement from PM Modi, who will be addressing the nation at 8 PM later tonight.
After a sharp climb in financial and banking stocks in the last hour of trade, Sensex ended 190 points lower at 31,371 and Nifty closed 42 points lower at 9,196.
Domestic bourses recovered from losses in the last hour of trade in line with global indices, which were earlier subdued on account of rising fears of 2nd wave of coronavirus amid ease in lockdown restrictions.
Sensex and Nifty were subdued, in line with European markets and Asian indices, that fell on the back of a choppy session on Wall Street.
Wuhan, the central Chinese city where the virus outbreak first emerged reported six new infections in two days. This was after weeks of no new cases. Meanwhile, South Korea announced the biggest spike in new cases in more than a month, while easing restrictions in the country. Further, investors were cautious ahead of Chinese inflation data and Producers price index data, scheduled to be released later in the day.
Although during late session, an overseas trend that was subdued earlier, gained momentum. Germany's DAX turned green, following the bullish trend in London's FTSE. SGX Nifty in Asia also turned flat with positive bias. Japan's Nikkei, China's Shanghai and Korea's Kospi also erased earlier losses and were trading marginally lower.
Earlier today, domestic indices fell sharply by the opening bell, with Sensex falling 400 points to 31,153 and Nifty trading 103 points lower at 9,135. PM Modi suggesting to CMs in his meet that lockdown may be extended also kept market sentiment pessimistic.
Traders said concerns about the second wave of virus infections deterred risk appetite and kept overseas investors jittery.
While all indices barring IT sector were trading in red in early trading hours of Tuesday, only banking, financials and pharma closed lower by the closing bell. While media sector gained 1.7%, metal sector rose over 1% today.
On the currency front, Rupee closed stronger against the greenback at 75.50 per dollar as compared to its earlier close of 75.74 per dollar.
Meanwhile, Bandhan Bank, Blue Star, Havells, JK Paper, Nestle among others will be announcing their Q4 results later in the day.
With a sharp surge in COVID-19 cases in India and the extension of lockdown, investors are anticipating an update on an effective fiscal stimulus package from the government and market sentiments will stay cautious ahead of the same, as per market experts. Further weak earnings announcements and poor macroeconomic data have also kept sentiments at the edge.
The number of cases in India has climbed to 70,756 on Tuesday, according to the health ministry, while the death toll due to COVID-19 rose to 2,293. Globally, there are 42.55 lakh confirmed cases and 2.87 lakh deaths from the coronavirus COVID-19 outbreak.
Vinod Nair, Head of Research at Geojit Financial Services said," Indian Indices closed in the negative, in sync with global markets. With virus infections continuing and PM Modi set to address the nation tonight, investors are awaiting news on how we plan to exit from the lockdown and what support the government will provide to the people and the businesses. Any perceived disappointment will be negative for the markets. Kotak Mahindra Bank and Maruti Suzuki have their results tomorrow and management commentary will be awaited."
Expressing views on Nifty's technical outlook for the near term, Ruchit Jain, Equity Technical Analyst at Angel Broking said," Since last few days, we have seen a consolidation phase in the index and the Nifty approached the support end of the range today. Thus, a pullback move was seen in the latter half which is indeed a good sign for the near term. The range of 9100-9000 is the support range for this consolidation phase whereas resistance is seen around 9450."