What Changed for the Market While You Were Sleeping?

| Published on 27th March 2020 | 197

What Changed for the Market While You Were Sleeping?

As the novel coronavirus grew into an official pandemic, the CDC advised that most people stay home to practice social distancing across all affected counties. Naturally, market moves were quite steep on Monday, March 9th. Here are all relevant updates regarding India’s benchmark indices, US Markets, Asian Markets, global commodities, and others in the two days that followed.

  1. Sensexand Nifty

India’s benchmark indices aligned with their global peers by underperforming on Monday. Sensex plunged by 5.17%; a steep loss of 1,941.67 points. Nifty also tanked by 4.9% or 538 points, forming a large bearish candle. However, by Wednesday, March 11th, the indices seemed to be making a turnaround. Pivot charts revealed that, in Nifty’s case, it created a bullish candle and respected Monday’s low of 10,294 levels. If Nifty consistently manages to trade over 10,550 levels in the next session, experts argue that it can eventually challenge the bearish gap which was created by March 9th.

  1. US Markets

US Wall Street rebounded from the brink of becoming a bear-market back on Tuesday, Mar 10th. The hopeful sentiment of government stimulus helped calmed traders’ nerves surrounding the nCoV pandemic. Industrial Average for Dow Jones gained by 4.89% or 1,167.14 points to 25,018.16. Additionally, S&P also rose by 4.94%, gaining 135.67 points and closed at 2,882.23 points. On a final positive note, Nasdaq Composite grew by 4.95% or 393.58 points, closing at 8.344.25.

  1. Global Markets

With respect to global market performance, Asian shares fell on Wednesday with budding skepticism in response to the unveiling of Washington’s coronavirus stimulus package. Asia-Pacific shares outside of Japan, as seen on MSCI’s broadest index, went down by 0.04%. However, within Japan, the Nikkei index covered up with early losses and rose by 0.24%. Australian shares were also hit by nCoV news and went down 1.31%.

  1. Oil rose by 8%

As the potential for economic stimulus encouraged future sales of oil, its price rose over 8% on Tuesday, which is the largest rise it has seen in nearly 30 years. Brent futures also grew by 8.3% which translates to $2.86 and settled at $37.22 for a barrel. Crude Oil prices on U.S. West Texas Intermediate (WTI) also grew by 10.4%, translating into a $3.23 rise and settled at %34.36.

  1. India’s Updated 2020 Growth Forecast

According to Moody Investors Service, India was expected to grow by 5.4% in 2020. However, with the novel coronavirus dampening its domestic global demand, this growth forecast has been updated to 5.3% by Moody. Representatives from Moody argue that even with the virus being gradually contained, it is certain that nCoV will depress economic activity for Q2FY20 as well.

  1. SGX Nifty

SGX Nifty trends suggest a negative opening for this index in India. At 7:15 am IST on the Singaporean Exchange, The Nifty futures were trading lower by 0.83 % which translated to losing 87 points.

  1. YES Bank declaring its Q3 FY20 Result on March 14

YES Bank is set to publicly reveal with Q3 FY20 results on Saturday, the 14th March. As of now, withdrawals from any account with YES Bank have been capped at ₹50,000 by newly appointed administrator Prashant Kumar. Kumar has reassured the public in a statement claiming that YES bank is closely working with RBI to resume all its banking services as soon as possible, with the goal of doing so well before April 3rd (moratorium period).

  1. Coronavirus could cost the global economy $2 trillion

The UN’s Trade and Development Agency announced that the shock from the nCoV pandemic will create an economic recession in some countries, dampening global yearly growth to under 2%. This translates into $2 trillion lost.

  1. Oil price assumption slashed to $40 by S&P Global

Annual Brent oil price assumption for 2020 was slashed $40 per barrel by S&P Global on Tuesday, March 10. The rating agency warned the market that certain junk-rated gas and oil and firms may face significant declines to their credit scores. Before the outbreak of the pandemic, S&P had expected oil prices to average around $60. It also slashed future forecasts for the following year by $5 from $55 to $50.

  1. Rupee depreciated past ₹74/USD

On Monday, the 9th of March, the value of INR depreciated beyond the 74-mark against USD. Amid growing concerns over the coronavirus-linked economic slowdown, the Indian rupee was down by 27 paise and tracked heavy selling in India’s domestic equity market.

  1. Treasury yields fall to record lows

Depth in the market of US10Y (10-year US Treasury) which measures the number of open orders hit a record low since 2008 on Monday. There is growing concern among some investors regarding the liquidity disruptions of the US Treasury. Gyrating oil prices and market volatility in response to the nCoV outbreak has fueled major shifts in yields.

  1. DII and FII data on NSE Nifty

According to provisional data on NSE for March 9th, DIIs or ‘domestic institutional investors’ purchased shares worth ₹4,974.8 crores in the equity market in India. Alternatively, FIIs or ‘foreign institutional investors’ exchanged shares worth ₹6,595.56 crores.