After the sharp sell-off in the previous session, domestic benchmarks Sensex and Nifty closed in the green on the last trading session of FY 20. While Sensex ended 1,028 points higher at 29,468, Nifty climbed 316 points to 8,597.
Total 25 out of 30 stocks on Sensex and 40 out of 50 scrips on Nifty closed in the green. India VIX, the index gauging market volatility, dropped 10.2% or 7.4 points to 64.5 today. In the previous session, Sensex ended 1,375.27 points or 4.61% lower at 28,440.32, and Nifty fell 379.15 points, or 4.38%, to close at 8,281.10.
"Almost all sectoral indices were up & volatility index was also down by 10%. Chinese economic data, Industrial production numbers improved & helped the global momentum, especially in Metals, Pharma and FMCG", suggested Vinod Nair, Head of Research at Geojit Financial Services, adding that the performance of global market will be the key driver for Indian market in the near-term.
Global markets turned green on prospects of more government stimulus and lockdowns to combat the virus spread. European markets were trading higher with FTSE gaining 1.84%, CAC up 2%, and FTSE MIB, DAX rising 2.5% each. US stocks rose yesterday, led in part by healthcare stocks and closed higher, amid the lockdown extension, with all three major indices S&P, Nasdaq and Dow Jones ending 3% higher.
Asian counterparts were trading higher on Monday following the manufacturing data from China, showing signs of pick up in factory activity. China's March official manufacturing PMI stood at 52 as compared to 35.7 & its official services PMI stood at 52.3 as against 29.6 (month-on-month basis).
Experts said amid a global indices-led recovery, domestic investors were value-buying during each dip in beaten down indices such as FMCG, metals and pharma. At close, Nifty FMCG logged 5.7% gain, followed by a 5.2% rise in metals stocks, 3.9% rise in pharma, 3.5% in IT and 3.4% upmove in financials. Banking and realty indices gained in the range of 2%.
S Ranganathan, Head of Research at LKP Securities said," Markets were up today led by key heavyweights and supported by Technology stocks. Auto stocks continued to play spoilsport ahead of the monthly numbers to be released tomorrow which are expected to be weak. Today's trade witnessed spirited buying across sectors like Pharma & FMCG as the street moved funds towards defensives across companies who are likely to navigate through the lockdown with minimum damage".
After falling over 23% in a month, Sensex and Nifty have gained 10% and 9% during a week as markets were buoyed by policymakers taking strict actions to support the coronavirus-hit economy.
With two-thirds of the population living in developing countries facing unprecedented economic damage from the COVID-19 crisis, many brokerages expect growth forecasts to be lower and global demand slowdown to be much larger than anticipated. Governments across the planet have introduced lockdowns to stem the spread of the virus, hammering demand and supply chains on a global level.
World Bank in an economic update on Monday said that the coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China.
Morgan Stanley also said lockdown measures are likely to impact growth across sectors and the output is expected to contract in the quarter ended June. The brokerage expects some normalisation in economic activity from Q3 of FY 20.
Financial markets worldwide have taken a big hit from the pandemic as investor sentiment remained fragile on growth of the global economy.
Since the start of 2020, Sensex, Nifty, BSE Smallcap as well as Midcap have fallen over 31%.
Compared to India's benchmarks, Brazil's Bovespa Index has lost 35%. London's FTSE and Germany's DAX has fallen 26%, followed by 23% drop in Straits Times Index (STI) in Singapore Exchange, 21.7% fall in Dow Jones on Wall Street and 18% fall in Japan's Nikkei.
In domestic sector-wise performers, healthcare led gains in the year-to-date period, falling 12%, followed by a 37% drop in Oil and Gas and 39% fall in PSU. On the other hand, auto index on BSE led losses with 42% drop followed by Realty and Bankex on BSE at 41% loss since the beginning of this year.
Expressing his views on market outlook, Ajit Mishra, VP - Research, Religare Broking said," We're seeing consistent buying interest in select FMCG majors and in fact some of these stocks are trading on the verge of making a new record high. Besides, select counters from the pharma pack too are attracting noticeable interest. On the flip side, PSU banking, auto and metal are seeing selling pressure on every rebound. Traders should align their positions keeping in mind the prevailing scenario. On the other hand, investors should not worry much about the daily fluctuations and maintain their focus on accumulating quality names in a phased manner."
Globally, there are over 8 lakh confirmed cases and 37,852 deaths from the coronavirus outbreak. Of these, over 1.65 lakh have recovered.
In India, coronavirus cases continued to rise despite a complete lockdown to cross 1,100-mark yesterday. India reported the biggest single-day spike in new COVID-19 cases at 200 today. As of Tuesday, the number of infected cases in India has increased to 1,300, with 102 recovered cases. The death toll from coronavirus in India has risen to 38.