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Sensex Opens Lower; Banking Stocks Fall
Fri, 3 Apr 09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.2% while the Hang Seng is down 0.4%. The Nikkei 225 is trading up by 0.3%. US stocks rallied on Thursday as hopes for a truce in the price war between Saudi Arabia and Russia and a cut in oil output drove gains, taking some sting out of a shocking jump in Americans filing jobless claims due to coronavirus-led lockdowns.

Back home, India share markets opened lower. The BSE Sensex is trading down by 218 points while the NSE Nifty is trading down by 56 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.1% and 0.5% respectively.

Except telecom stocks and FMCG stocks, all sectoral indices are trading in the red with banking stocks, and automobiles stocks witnessing maximum selling pressure.

Note that, since the coronavirus outbreak, all BSE indices and NSE indices are down in the range of 25-35%.

Speaking of sectoral impact, in the article titled: Worst Hit Indian Sectors Amid Coronavirus Pandemic: 10 Points to Know, we dive deeper and look at how the impact has been on individual sectors...

The coronavirus impact has shaken markets worldwide. Indian stock markets have felt the full impact too.

For the BSE Sensex, FY20 was the second worst year post FY08, the year of the global financial crisis.

Good Time to Start Investing Now?


Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

History has shown that after years like the one we had just now, the next 3 years are good for the markets.

In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

Moving on, gold prices are currently trading up by 0.7% at Rs 43,240.

The rupee is currently trading at 76.40 against the US$.

The rupee's path will largely depend on how successful the Indian government's steps are in containing the spread of COVID-19 in a country of more than 1.3 billion people.

After giving up over 7% since the start of the year, the rupee fell to a record low of 76.42 to the dollar on Wednesday.

Note that, it grew just 4.7% in the three months to the end of December from a year earlier, the slowest expansion in over six years.

Speaking of gloomy economy, coronavirus fears and falling markets, Ajit Dayal has written an insightful piece, sharing his views in the latest edition of The Honest Truth.

Here's a snippet from the article:

  • Is the meltdown over?

    While the unravelling of the debt excess in the US and the developed world may have some more to play out, the question on an investor's mind in India is: Is the mayhem over and what should I do next?

    On the face of it, there is some interesting Upside Potential, or potential profit, if you were to buy the specific stocks now and assume, they get back to their past peak levels over, say, the next 2 to 3 years.

    With the help of either some jaadu mantar or some good policy.

    But there are some "bets" I would be very cautious about: Yes Bank, Reliance and the INR, for instance.

You can read his entire article here: The Market Gets a Viral Attack.

In another development, India's manufacturing activity expanded at its slowest pace in four months in March and is likely to get worse as demand and output take a hit from the coronavirus outbreak, putting a severe dent in business optimism.

A 21-day nationwide lockdown, which started on March 25 in the world's second-most populous country, is expected to deliver a heavy shock to the economy despite massive fiscal and monetary support packages by the government and the Reserve Bank of India last week.

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, declined to 51.8 last month from February's 54.5, its lowest since November but still above the 50-mark that separates growth from contraction for a 32nd month.

A sub-index that tracks overall demand in the sector hit a four-month low as foreign demand contracted for the first time in nearly two and a half years, falling at its fastest rate since September 2013.

That was despite input and output prices increasing at their weakest in five and six months, respectively, a sign of a decline in overall inflation, which has continued to remain above the RBI's medium-term target for five months.

Lower price pressures could provide additional room for the central bank to ease policy further. It cut its key interest rates by 75 basis points and introduced a stream of unconventional measures last week.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


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