Aamar Deo Singh
By : Mr. Aamar Deo Singh, Head Advisory, Angel Broking Ltd
After their relatively good performance last week, the Indian stock markets felt no respite on Monday. Sensex was seen tumbling 1.5% or 469 points while its NSE counterpart Nifty 50 also dived by 1.3%, ending up below the 9,000-mark. The market trends were defined by the coronavirus lockdown extension by and large, which now appears to be inevitable as domestic cases rise rapidly.
The Indian equity markets kicked off the week with frail early signs from other Asian equivalents. All Asian bourses showed signs of weakness today despite the flattening curve of the coronavirus outbreak. Last week, Japan had incentivized its businesses with a 243.5 yen package to relocate out of China. The friction is causing uncertainty within the global market as tensions also mount between China and the US. These developments are making investors a bit apprehensive, a trading pattern that we might continue to see in the near term.
The Post-Easter Market:
At BSE’s 30-stock benchmark index, only 7 stocks advanced today. They included L&T, IndusInd Bank, UltraTech Cement, NTPC, and Sun Pharma. Stocks like Bharti Airtel and Asian Paints also rallied by 4.64% and 1.63% respectively after their recent corrections. At Nifty 50, on the other hand, saw 20 advances and 30 declines. Apart from the abovementioned stocks, Hindalco Industries, Adani Ports SEZ, and Coal India observed a rally today alongside others. Dr. Reddy’s Lab also continued its bullish sentiment with a 3.82% gain. The stock is now over 40% from its low of March.
Pharma and Capital Goods the best:
At present, the Pharma Sector and Capital Goods sector are appearing to be the best bet for investors. The pharmaceutical and healthcare majors have shown a very positive rally of late, which is expected to continue for the foreseeable future. Also, as our nation stares at a staggered exit from the lockdown, capital goods also come across as a good option for investors since manufacturers will ramp up production as the curbs are lifted. However, it ultimately depends on how exactly the lockdown will be eased, if it will be eased at all this month.
OPEC+ lands a deal:
The long-standing tussle amongst global oil exporters has now officially ended. OPEC+, the grouping including OPEC nations and Russia, has decided to slash daily production by 9.7 million barrels between May and June and will gradually increase production till 2022 thereafter. The development will bring greater stability to the broader market. However, it will have to be sustained for the next few months as the market is already battling the problem of oversupply.
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