The benchmark Sensex started the week on a sombre note on Monday.With Coronavirus-related deaths climbing up to 900, its impact on trade and demand is increasingly dampening investors mood globally.

Besides, poor vehicles sales figures prompted investors to push the sell button on listed auto firms. Barring MRF, all other auto stocks in the Nifty Auto index closed lower. The index was the top sectoral loser followed by the Nifty metal index.

Mahindra & Mahindra (M&M) fell the most on Nifty losing over 7 per cent after the automaker posted 73 per cent decline in net profits year-on-year.

Vehicle sales across segments have been declining for over a year now. SIAM data of the sales last month compared to January 2019 showed that domestic passenger vehicle sales slipped by 6.2 per cent to 262,714 units. The decline in car sales stood at 8.1 per cent, and of two-wheelers at 16.06 per cent.

Vinod Nair of Geojit Financial Services said: “Market is still in the grip of Coronavirus jitters which will add volatility in the short term. Companies with high exposure to Chinese market either in terms of export or import may be impacted more than others.” Analysts expect the rest of the week to be volatile for the markets on account of a series of macro data scheduled to be released. Most crucial will the inflation numbers which will have a bearing on the interest rate scenario for the coming months.

Most stock markets were weaker on Monday with investors worried over the impact of China’s coronavirus outbreak on the global economy.

In afternoon European trades, London and Paris were both down 0.4 percent, while Frankfurt slid 0.3 percent.

The Dow was essentially unchanged in initial New York trades.

“Coronavirus concerns are weighing,” noted CMC Markets UK analyst David Madden.

“The deepening health crisis is chipping away at market confidence.

“In London, stocks that are connected to China are under pressure. Mining, energy as well as travel stocks are in the red.”

The virus has killed more than 900 people, infected more than 40,000 across mainland China and spread to more than two dozen countries in what is now considered a global health emergency.

It has also disrupted major supply chains for items such as food, household goods, and car and electronics parts.

In Asia, Tokyo’s benchmark Nikkei 225 index closed 0.6 percent down, while Hong Kong pared some losses, ending the day 0.6 percent lower after tanking 1.1 percent at the open.

Shanghai bucked the trend with a 0.5 percent gain at the close.

The week gone by saw a sharp recovery in the markets coupled with fresh buying and some short covering as well. The fact that global markets were strong as well helped in the sentiment and strong recovery. Markets gained on the first four days of the week and there was profit taking on Friday. The usual week end profit taking phenomenon. The BSE Sensex gained 1.406.32 points or 3.54 per cent to close at 41,161.85 points while NIFTY gained 436.50 points or 3.74 per cent to close at 12,098.35 points. the broader markets saw BSE100, BSE200 and BSE500 gain 4.06 per cent, 4.014 per cent and 4.05 per cent respectively. BSEMIDCAP was up 519 per cent while BSESMALLCAP was up 3.46 per cent. With these gains, market has not only covered budget day losses but much more and recovered more than half of the previous weeks losses as well.

Dow Jones gained 846.48 points or 3 per cent to close at 29.102.51 points. The Indian Rupee lost 11 paisa or 0.15 per cent to close at Rs 71.45 to the dollar. Effect of the Coronavirus are still being assessed and it is widely believed that the number of people affected is far greater than the number in public domain. The good part about it is the fact that it seems far less deadly than the earlier SAARS and H1N1 virus.

RBI in its monetary policy review kept policy rates unchanged. It however introduced a new concept to infuse liquidity into the system through LTRO (Long term Repo Operations) which would be of 1- and 3-year duration and would be offered at repo rates. The amount planned to be made available is of the nature of 1 lac crs and would be beneficial to housing and developer loan and also auto sector.

Markets have had a good run and have got over the sharp correction of the previous week and also budget blues. Many of the fine print concerns have been addressed and resolved. This has helped in clearing the air about the budget.

Indo-Asian News Service