Extending decline for the second straight session, benchmarks Sensex and Nifty erased early gains and closed lower on Wednesday, in line with a global trend reversal.
While Sensex closed 310 points lower at 30,379 , NSE Nifty ended 68 points lower to 8,925. Sectorally, gains in realty, FMCG, IT were capped by losses in banking indices.
Traders said investors have already factored in the chances of extension and the domestic market will continue taking cues from the worldwide trend.
Moreover, concerns over the rise in Covid-19 cases across the nation and worldwide kept domestic investors cautious.
Earlier, domestic markets rose on hopes of decision makers lifting some curbs to help millions hit by coronavirus lockdowns. PM Modi announced lockdown extension till May 3, 2020, over rising number of coronavirus cases in the nation.
Fertiliser stocks rose after government issued guidelines allowing agricultural activities during the lockdown. Pharma, FMCG and metal stocks also rose in early trade.
Although global trend turned red, with European indices opening lower, with FTSE, DAX and CAC falling 1.8% each. Following this, SGX Nifty also fell 2.2% to 8,995 mark. While, Wall Street indices ended strongly bullish in overnight trade, Asian counterparts, as well as European indices, fell over 1% each.
Wall Street ended higher after Trump said he is close to completing a plan to end the coronavirus shutdown and reopen some parts of the country even before May 1, 2020. However, US Futures (Dow Jones) traded at 23,719, down 161 points or 0.67%.
Vinod Nair, Head of Research at Geojit Financial Services said," Indian markets seemingly set aside the economic implications of the extended lockdown, although it lost ground on the negative opening in the European markets. Almost all sectors have been affected by the lockdown and the market will try to measure the future financial impact of this, rather than focusing on the previous quarter numbers. This is expected to drive stock-specific moves in the market in the coming days."
Tracking bearish trend from the equity market, rupee pared most gains from early morning trade and ended at day's low of 76.45 per dollar as against the previous closing of 76.27 per US dollar.
Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said,"As far as the trajectory for the rupee is concerned, downwards pressure is not showing any signs of abating, even though 76.50 mark is the line in the sand that is guarding further weakness in the local unit. Once the said level is convincingly breached, 77.50 mark looks likely on the cards."
Crude oil benchmark, Brent crude futures failed to hold minor gains and later fell 4.2% to 28.36 per barrel, as hopes of supply cut helping surge in prices was faded over the lack of demand for the commodity over lockdown times.
On the other hand, MCX gold today rose to another all-time high of Rs 46,730 and later traded 0.88% higher or 405 points to Rs 46,675 per 10 gm. "We are expecting this rally may continue and Gold may test Rs 49,000 to Rs 50,000 on MCX and in the international market, it may test $1780 to $1800 soon," said Anuj Gupta-DVP-Commodities & Currencies Research, Angel Broking.
Earnings season has also started with IT major Wipro reporting a 5.3% sequential fall in its consolidated profit at Rs 2,326.1 crore for the quarter ended March 2020. The company announced Q4 results after market hours today.
"With the earnings season starting, management commentary about the impact of Covid-19 on their respective businesses, will be in focus. IT companies will officially kick off the earnings season and investors will be keen on how the virus spread has impacted their services and the locations in which those services are offered," Vinod Nair added.
Ajit Mishra, VP - Research, Religare Broking said,"We reiterate our cautious view on Indian markets and suggest not to go overboard during this recovery move. Domestic factors such as sharp surge in the coronavirus cases and extension of the lockdown will continue to weigh on the investor sentiment ahead. The earnings season begins today. However, we believe that more than the earnings announcement, the outlook given by the management would hold significant importance for the participants."
Ruchit Jain (Equity Technical Analyst, Angel Broking) said, "During the mid-week holiday, our government announced extension of the ongoing lock down period. However, market participants had anticipated such move in advance and hence, it was already factored in due to which we did not see any impact at opening. However, as mentioned in our yesterday's report, the immediate resistance of the index was seen around 9320 which is the 38.2 percent retracement of the recent correction. Nifty almost rallied towards that resistance (made high of 9261) and then witnessed profit booking during later part of the day."
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