Sensex Ends 3.2% Lower, Crude Oil Crash, Stocks in Focus, and Top Cues to Track Today

Wed, 22 Apr Pre-Open

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Indian share markets ended deep in the red yesterday, tracking global peers, following a historic overnight plunge in oil futures' prices.

Further, US President Donald Trump's announcement that he would sign an executive order to temporarily suspend immigration into US dampened sentiment.

Investors were also cautious ahead of upcoming earnings reports and economic data. As many as seven companies including ACC and CRISIL announced their Q4FY20 results.

Barring healthcare stocks and telecom stocks, all sectoral indices ended on a negative note yesterday, with stocks in the banking sector, metal sector and automobile sector, leading the losses.

At the closing bell yesterday, the BSE Sensex stood lower by 1,011 points (down 3.2%) and the NSE Nifty closed down by 280 points (down 3%).

The BSE Mid Cap index and the BSE Small Cap index ended down by 2.7% and 3%, respectively.

Before we move on to other news, we would like to share that today is Equitymaster's birthday and we will be starting our 25th year as an organisation today.

And on this 25th anniversary, we have something very special planned for you.

Make sure you sign up for our anniversary celebrations - we have lots of exciting bonuses in store for you.

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Speaking of Indian share markets, the coronavirus impact has shaken markets worldwide. Indian stock markets have felt the full impact too.

For the BSE Sensex, FY20 was the second worst year post FY08, the year of the global financial crisis.

Good Time to Start Investing Now?

Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

History has shown that after years like the one we had just now, the next 3 years are good for the markets. In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

Crude Oil Prices Fall to Historic Lows

In the news from oil space, US crude oil futures collapsed below US$0 on Monday for the first time in history, amid a coronavirus-induced supply glut.

The futures ended the day at a stunning minus US$37.63 a barrel as desperate traders paid to get rid of oil.

Brent crude, the international benchmark, also slumped, but that contract was nowhere near as weak because more storage is available worldwide.

It however rebounded yesterday, with US crude turning positive after trading below US$0 for the first time ever. Gains were, however, capped amid unresolved concerns about how the market can cope with fuel demand decimated by the coronavirus pandemic.

How crude oil prices perform in the coming days remain to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Speaking of stock markets and oil prices, in the video below, Ajit Dayal, founder of Quantum group, shares his views on the impact of the Coronavirus crisis and the oil price war on the Indian economy and the stock market.

He also talks about the market crash and how to invest your hard-earned money across various assets in these difficult times.

Watch now...

Meanwhile, in one of the articles, we have written the entire timeline showing economics of falling crude oil prices. You can check the same here: All About the Crash in Crude Oil - 10 Points.

Top Stocks in Focus Today

Market participants will be tracking shares of IT companies as US President Donald Trump announced a temporary suspension of immigration into the country.

In a Twitter post, the US President wrote that "In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!"

Shares of Tata Consultancy Services (TCS), Tech Mahindra, Wipro, HCL Technologies, Hexaware Technologies, NIIT Technologies and Mindtree will be in focus on back of the above news.

From the pharma space, Jubilant Life Sciences share price will be in focus today as ace investor Rakesh Jhunjhunwala increased his stake in the pharma company to 4.41% in the quarter ended March 2020.

As per the shareholding pattern available on exchanges, Rakesh Jhunjhunwala held 2.74% and 1.67% stake in the company through two accounts.

Speaking of the pharma sector, in December 2019, co-head of Research at Equitymaster, Tanushree Banerjee had predicted that pharma could be the sector to see a big rebound in 2020.

And rightly so, most pharma companies have re-emerged as the safer bets for investors in the ongoing market turmoil. The Indian rupee touched a new record low of Rs 76.87 against the US dollar last week. Most pharma companies generate their revenues through exports. Hence, a depreciating rupee is a positive development for them.

As per Tanushree, in a post Covid-19 world, healthcare expenditures globally will see a big rejig.

Tanushree has already recommended 4 safe bluechips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Trade the Coronavirus Crisis Safely (requires subscription).

And if you are not a StockSelect subscriber, here's where you sign up.

From the banking sector, ICICI Bank share price will be in focus today after reports suggested the bank has exposure to Ocean Tankers, a unit of Singapore oil-trading firm Hin Leong Trading (HLT), that has filed for bankruptcy in Singapore.

A report by The Economic Times stated ICICI bank has lent US$ 100 million to the company, out of which US$ 75 million is secured through inventory.

Rupee Continues Downtrend

The rupee ended at 76.83 against the US$ yesterday.

The domestic currency ended near record low levels yesterday amid heavy selling seen in the domestic equity markets on the back of drop in crude oil prices.

This was seen as the dollar gave up some gains against the currencies of oil producers after US crude futures pared some of their massive losses in Asia.

The dollar index, which measures the greenback's strength against a basket of six currencies, rose by 0.2% to 100.15.

Note that the rupee had plunged to a record low against the dollar last week, hovering near the 77-mark. The weakness in the rupee was largely due to strengthening of the US Dollar against the basket of currencies as investors fled to safe haven greenback amid weakening risk appetite in the markets.

On a year-to-date (YTD) basis, the rupee has depreciated sharply against the US dollar. While it started the calendar year 2020 at 71.28 against the US dollar, it is currently trading at 76.83 against the US dollar.

In a recent article titled The Sharp Fall in Indian Rupee: 6 Points to Know, we dive deeper and look at the factors behind rupee's depreciation.

Vijay Bhambwani, editor of Weekly Cash Alerts, has talked about the Indian currency in a special edition podcast from Investor Hour. He shares what's around the corner for Indian rupee and how should position oneself for potential gains.

You can listen the entire episode here...

Speaking of ongoing stock market crash, our special report, How to Trade the Coronavirus Crash, is the most comprehensive report on how to trade the coronavirus, both from a short-term and long-term perspective. You can claim your FREE copy here...

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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