New Delhi: Trading at the Indian bourses this week would continue to be guided by developments on the coronavirus front and concerns over its impact on the economic activity will most likely weigh on the markets, according to analysts.
“The markets will continue to focus on whether the virus infection rate peaks out and also on the coordinated actions of the RBI (Reserve Bank of India) and the government to support businesses with relief package,” Vinod Nair, head of research, Geojit Financial Services, said.
During the last trading week till Friday, the Sensex plummeted 4,187.52 points or 12.27 per cent, while Nifty sank 1,209.75 points or 12.15 per cent.
Equity markets witnessed a relief rally on Friday after four days of fall and ended 1,627.73 points or 5.75 per cent higher at 29,915.96.
“Indian indices again plunged sharply this week, witnessing the biggest weekly loss since October 2008, as the increasing number of coronavirus cases in India as well as globally, continued to spook the markets,” Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services, said.
He also said that the markets gained on the last day of the week on hopes of an economic stimulus after Prime Minister Narendra Modi announced a financial task force to take necessary actions to combat the COVID-19 pandemic’s economic blow. “Easing monetary policy action across the globe shows the impact coronavirus would have on the economy. These concerns will most likely weigh on the markets that would take a while to recover from this significant price damage.”
TradingBells Senior Analyst Santosh Meena said, “We can easily say that we are in the most uncertain environment of the century where the future direction of the market will completely depend on further development on the issue of COVID-19 mainly in Europe, the US and India.
Meena added that if the situation improves from here then we can expect a bargain buying in the market which may lead a smart rally in the coming days, but if the situation worsens from here then the pain will continue for the market players.
The financial blow of the pandemic has made investors jittery world over. Several sectors, including the airline industry, are hit hard by the outbreak following travel restrictions.
“Needless to say that global cues and developments on the coronavirus front would dictate the market trend ahead also,” Religare Broking Vice-President (Research) Ajit Mishra said.
Markets would also be looking at other important barometers such as rupee-dollar trend, investment pattern of foreign investors and crude oil.
(PTI)
