Daily Markets - April 12, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities
(Time Zone: Arizona, USA)
Indian benchmark equity indices fell sharply by over 3.5 percent on April 12 - the most in a month - as due to rapidly rising covid cases the government of Maharashtra (the richest state) will take a lockdown decision post the state Cabinet meeting on April 14. Nifty opened gap down and kept falling through the day. At close, the Nifty was down 524.10 points or 3.53% at 14310.80.
Volumes on the NSE were above recent averages. Among sectors, PSU Bank, Media, Realty, Metal, Auto, Banks fell the most. The Nifty Midcap index fell 5.7%, the most in over a year while the Smallcap index too fell 5.6%. The India Volatility Index rose the most in over a month, ending 16.2% higher at 22.99.
As of February 2021, outstanding credit to agriculture and allied activities grew 10.2% year-on-year (a four year high) to Rs 12.74 lakh crore, almost doubling from the 5.8% year-on-year growth recorded in February 2020.
Asian shares were lower on Monday, as investors grew wary over the recent surge in coronavirus cases in many places even as vaccination efforts are making little headway. European markets retreated slightly on Monday as global stocks continue to search for direction after record highs in several regions last week and reacted to negative coronavirus developments.
China's top disease control official said during the weekend that the effectiveness of Chinese coronavirus vaccines was low and the government is considering mixing them to get a boost.
India's Benchmark indices slumped to a 10-week low as daily COVID-19 infections spiked. Investors remained worried about the economic fallout of the fresh surge in coronavirus cases and the subsequent restrictions announced by several state governments. These developments could jeopardise the market's assumption of around 11 percent GDP growth and above 30 percent Nifty earnings growth. Advance decline ratio plunged to the lowest since Feb 28 suggesting the amount of panic in the broader markets.
Nifty turned up today from 14249, making a near double bottom with 14264 made on March 25, 2021. A breach of this level could lead to more weakness in the near term. 14460-14574 could be the resistance for the Nifty in the near term. While sentimentally there is little to expect in terms of bounces, some positive news on the Covid or its vaccination front could provide a respite, howsoever temporary.