AGR dues, global cues moved share market this week; what to expect in the week ahead

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Published: February 22, 2020 11:20:15 AM

Coronavirus moved the markets this week as well as the government assured that it will take swift remedial steps to help the sector that fear impact on business due to the health emergency in China.

S&P BSE Sensex ended the week down by 153 points or 0.37 per cent at 41,170 points, while the broader Nifty 50 slipped 45 points or 0.37 per cent to 12,080 points.

After losing ground in two consecutive sessions, domestic share markets rebounded during the week only to end lower than where they started on Monday. S&P BSE Sensex ended the week down by 153 points or 0.37 per cent at 41,170 points, while the broader Nifty 50 slipped 45 points or 0.37 per cent to 12,080 points. Coronavirus moved the markets this week as well as the government assured that it will take swift remedial steps to help the sector that fear impact on business due to the health emergency in China. On the other hand, AGR dues of telecom sector had a mixed reaction in the market.

“Roller coaster momentums seen in telecom stocks and their creditor banks post supreme court verdict on AGR. Corona continued to keep the market on edge and clear beneficiary remained the pharma sector. whereas, companies like Tata Motors faced selloff due to their exposure in China,” Vishal Wagh, Research Head, Bonanza Portfolio told Financial Express online.

AGR dues: Bharti Airtel paid Rs 10,000 crore of its more than Rs 35,000 crore AGR dues, while Vodafone-Idea made part payments twice this week totaling to Rs 3,500 crore. Bharti Airtel Share price gained after the Supreme Court hearing last week it failed to hold those gains this week. Vodafone-Idea, marched up more than 17 per cent during the week. Bank stocks, with significant exposure to the telecom sector, lost ground during the week. Kumar Mangalam Birla and Sunil Bharti Mittal met the finance minister during the week which revived hope of a bailout for the ailing sector. There are some hopes that the government may come out with a relief package for the telecom sector which may lead to short covering in the overall banking sector,” said Santosh Meena, Senior Analyst, TradingBells.

Coronavirus: It is heard that China is slowly reducing curbs and hopefully the economy is likely to come back to normalcy,” said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote. During the start of the week, an official from China national Health Commission, said that the Novel Coronavirus was “preventable and treatable”. With the lack of any major event domestically, global markets are dictating the trend and the lingering fear of Coronavirus and its impact on the global economy is haunting markets across the globe, says analysts.

US President’s visit: US President Donald Trump will visit India in the coming week and market participants are patiently anticipating what he will have in store for India. “The markets will be looking to US president Trump’s visit to India and any indications towards the trade deal. Although no major announcements are expected, markets will be looking forward to commentary regarding the same. Defence stocks might be in focus,” said Vinod Nair of Geojit Financial Services. Trump has already made it clear that he is saving a deal for India which is likely to be signed after the US Presidential Elections.

Crude oil prices jump: Prices have jumped in the last week signaling revival of demand. “Crude oil has bounced and increased by nearly 8% from its pessimistic level of Rs3,500/bbl which indicates that fear of the virus (covid19) may be receding, if we use crude oil as a thermometer to assess the impact of the epidemic on overall markets,” said Jimeet Modi.

The week ahead: Analysts believe that Donald Trump’s visit and Coronavirus are the two factors that will weigh in on the market. “Global markets will guide domestic markets to open monthly expiry week initially followed by the outcome of Donald Trump, US President, visit India and also expiry positions rollovers. As a daily formation suggests that there is a strong reversal formation from the recent correction and higher chances of the bullish trend for the coming week,” said Vishal Wagh. Ajit Mishra of Religare Brookings points out that the week will end with macro data that will impact the markets in the coming weeks. “In the coming week, participants will be eyeing the GDP estimates and India’s infrastructure data on February 28,” he said.

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