Asian stocks on Wednesday rallied tracking the gains on Wall Street as US policymakers are close to clearing a $2 trillion stimulus package to fight against fast-spreading coronavirus
As India entered into a 21-day lockdown starting March 24 midnight to curb the fast-spreading coronavirus, the share market saw high volatility on Wednesday. The 30-share index Sensex opened at 26,499, hitting the day’s high of 27,299 and then falling to 26,359. The broader Nifty 50 index opened at 7,735, and then jumped to intraday high level of 7,980 only to hit day’s lows of 7,714. While investors are wary about the domestic equity market movement, experts see the market stabilising with volatility falling in near-term. “We have some clarity coming in the current crisis and how long this could be, will be based on yesterday’s PM Modi’s address. Hence, we could see some pause in relentless selling but we are still to see fresh buying. So, in the near term we could see declining volatility and market’s move should also be getting narrower than witnessed earlier,” Narendra Solanki, Head Fundamental Research-Investment, Anand Rathi Shares and Stock Brokers, said.
S&P BSE Sensex was trading at 27,055, up 382 points or 1.43 per cent, while Nifty 50 index was ruling 123 points or 1.58 per cent higher at 7,924 in noon deals. Appreciating the lockdown decision, as it would prevent the spread of deadly virus, A K Prabhakar, Head of Research, IDBI Capital said, “Market has already corrected more than needed so some pause would be here.” He added that this decision will not have much impact on companies related to FMCG, Pharma and IT sectors. Prabhakar recommends investors to buy stocks from these sectors. The top stock picks include RIL, Dabur India, HUL, Infosys, TCS, Tata Elxsi, MindTree, NIIT Tech, Dr Reddy’s, IPCA Lab.
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As manufacturing activity is slowing down due to plant shutdown announcements by many auto companies, Narendra Solanki sees recovery sometime away. While Vishal Wagh, Head of Research, Bonanza Portfolio Ltd believes that OMCs, transport, household goods, textile, reality and NBFC sectors will be most hurt as India enters into 21-day lockdown period. However, Asian stocks on Wednesday rallied tracking the gains on Wall Street as US policymakers are close to clearing a $2 trillion stimulus package to fight against fast-spreading coronavirus.