Second Wave Spooks The Markets

Most investors preferred to book profits from the recent market rallies before the economy gets engulfed by another wave of uncertainty as restrictions are being implemented to curb the spread of the disease.

Second Wave Spooks The Markets The fear of corona virus yet again took over Indian markets in recent weeks. Domestic indices touched lifetime- highs during this fortnight and also saw the biggest intraday crash in over two months.  The last few weeks also saw rising concerns about the possible increase in inflation globally, as well as sell-off in many global markets. During the fortnight the global indices portrayed a mixed picture. Hang Seng Index surged by around 4.08 per cent during the fortnight. Following it, Nikkei and Shanghai Composite index rose by 2.57 per cent and 1.72 per cent respectively, in the last few weeks.

Apart from these, French index CAC 40 gained by 1.65 per cent while FTSE 100 which comprises companies listed in the London Stock Exchange inched up higher by 1.57 per cent. German index DAX was down by 1.39 per cent during the fortnight. In US, indices such as S&P 500 and NASDAQ declined by 0.87 per cent and 3.74 per cent whereas DJIA was up by 0.48 per cent. Having a look at the domestic markets, the Nifty and Sensex tumbled by around 2.70 per cent and 3.11 per cent respectively during the recent fortnight. An increase in the number of corona virus cases and a possibility of lockdown triggered fear among investors. Most of them preferred to book profits from the recent market rallies before the economy gets engulfed by another wave of uncertainty as restrictions are being implemented to curb the spread of the disease. Whereas, in the broader markets the mid cap and the small cap index managed to be in positive numbers giving returns of around 1.30 per cent and 2.15 per cent respectively. On the sectoral front, the Metal index was the biggest gainer during the fortnight. Last week, as China returned to markets after the Chinese New Year holiday, global base metal prices rose with hopes for better demand prospects and increase in manufacturing capabilities.

The fear of corona virus yet again took over Indian markets in recent weeks. Domestic indices touched lifetime- highs during this fortnight and also saw the biggest intraday crash in over two months.

Rise in base metal prices pushed up stocks of domestic metal companies during the fortnight as the Metal index surged by 6.95 per cent. Following it was the Power Index which rose by 6.57 per cent in the last 15 days. The Auto index was the biggest loser during the fortnight contracting by 6.24 per cent. It seemed that the investors have aggressively booked profits in auto stocks exerting selling pressure and dragging the index down. Indices like Bankex, FMCG, Healthcare and IT were seen giving negative returns of 2.87 per cent, 4.53 per cent, 4.31 per cent and 4.37 per cent respectively during last 15 days. The realty index was also seen inching down 0.06 per cent.

The trading data for fortnight shows that the FII’s were net buyers to the tune of Rs12,437.61 crore whereas the DIIs were net sellers to the tune of Rs10,949.2 crore. The positive net FII figure can confirm that foreign investors have a growing confidence in the Indian markets which can be a positive sign for the Indian equity market going forward. The WTI crude prices were recorded at USD 61.70 at the end of the 15-day period from USD 57.97 at the start of the same, giving a rise of 6.4 per cent. On the other hand, the Brent Crude travelled from USD 61.09 to USD 64.36 expanding around 5.35 per cent in the last 15 days. The gold price dipped by 2.16 per cent recording at Rs46,802 for 10 grams of 24 carat gold.