The S&P BSE Sensex plunged 5.96 percent while the Nifty50 was down 6.21 percent in February, making it one of the worst monthly falls since September 2018, data showed.
Nearly 400 companies out of the top 500 companies recorded negative returns in February in the S&P BSE 500 index but 25 of them bucked the trend as they rose 10-60 percent in the same period. From risk-on sentiment, it quickly turned into a risk-off sentiment as benchmark indices closed lower by about 7 percent on a weekly basis. The market closed out one of the worst weeks in the last decade.
On the macro front, India's fiscal deficit touched 128.5 percent of the whole year budget target at January-end, said the Controller General of Accounts (CGA) on Friday.
The Indian rupee plunged by 60 paise to settle at 72.21 (provisional) against the US dollar on Friday, tracking heavy sell-offs in domestic equities and sustained foreign fund outflows.
On the institutional front, FPIs were net sellers in Indian markets for Rs 1428 cr while the DIIs were net buyers to the tune of Rs 7621 cr, provisional data showed.
Big News:
India's gross domestic product (GDP) grew 4.7 percent in the October-December quarter of 2019-20, according to data released on February 28.
GDP growth in the previous quarter has been revised to 5.1 percent. GDP growth came in at 5.6 percent in the corresponding quarter of 2018-19.
The decline in the economic growth has bottomed out, said the finance ministry on Friday as the GDP growth slowed to a nearly seven-year low of 4.7 percent in the quarter ending December 2020.
The Q3 GDP print came in at 4.7% (lowest print in 27 quarters) against market expectations of 4.6% and GVA growth came in at 4.5%, in line with estimates.
Experts feel that a rate cut could be in the offing but for that inflation has to cool down but till that time RBI to remain accommodative and the government to continue initiating countercyclical fiscal measures to support the economy.
It is difficult to conclude whether the risks arising from the rapid spread of the coronavirus for domestic tourism, trade and manufacturing, would outweigh the improved outlook for the agricultural sector and rural spending, engendered by the encouraging outlook for the rabi crop, ICRA said in a report.
The continued slowdown in economic growth in Q3 FY2020 suggests that the MPC may well undertake another rate cut, but only when the CPI inflation retraces considerably towards the 4% mark. Therefore, we continue to expect a pause, at least in the April 2020 and June 2020 policy reviews, the report added.
Technical View:
Nifty formed a ‘Long Black Day’ kind of candle on the daily charts
Nifty is approaching certain critical long term averages, on longer time frame charts, from where Nifty took to support and staged a rally after major corrections in the past.
Hence, in the near term crucial support to watch out will be 11,111 which should not be violated at least on a weekly closing basis.
The next logical support of the entire rally from the lows of 10670 – 12430 is placed around 11022 levels.
India VIX moved up sharply by 70% from 13.70 to 23.23 levels on a weekly basis. India VIX has given breakout from its horizontal trend line on the daily scale and thus volatile swings could not be ruled out in the market.
Three levels: 11111-11,175, 11400, 11530
Max Call OI: 12000, 11800
Max Put OI: 11800, 11700
Stocks in news:
SBI will be in focus as the much-awaited SBI Cards and Payment Services IPO — the largest of 2020 — will open for subscription on March 2 with a price band of Rs 750-755 per share.
Reliance Industries on February 29 said it has acquired 37.7 percent stake in textile manufacturer Alok Industries Ltd for Rs 250 crore.
Telecom operator Bharti Airtel on February 29 said that it has made additional payment of Rs 8,004 crore towards adjusted gross revenue dues to the Department of Telecom (DoT).
Auto stocks will be in focus after Mahindra and Mahindra Ltd (M&M) and Tata Motors said on Sunday their supply of parts from China had been hit, as fallout from the coronavirus outbreak mounts.
Technical Recommendations:
We spoke to CapitalVia Global Research Limited and here's what they have to recommend:
Marico: Buy above Rs 310| Target Rs 335| Stop Loss: Rs 288
Equitas Holdings: Buy above Rs 118| Target Rs 132| Stop Loss: Rs 108
Titan Company: Buy above Rs 1287| Target Rs 1344| Stop Loss: Rs 1235
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