In the absence of any key domestic event, investors will today track global sentiments that continue to remain muted after the novel coronavirus spread to several new countries. Both US and European equities suffered their steepest losses since mid-2016 on Monday with the US markets seeing all their 2020 gains wiped out as the full implications of the virus’ spread finally caught up with the Wall Street. The Dow ended Monday down 3.55 per cent, while the S&P 500 lost 3.35 per cent and the Nasdaq 3.71 per cent.
As such, analysts say that the Indian markets are likely to be choppy in the near term while the forthcoming derivatives expiry could also induce some volatility during the week.
Market participants will also track today's talks scheduled between US President Donald Trump and Prime Minister Narendra Modi. Any positive outcome from the talks in terms of strategic partnership or trade deal might cheer the Indian markets.
Besides, investors will continue to track the Rupee's and oil price trajectory.
Asian shares extended losses on Tuesday amid fears the coronavirus was rapidly mutating into a pandemic that could cripple global supply chains and wreak far greater economic damage than first thought. Japan's Nikkei, which was closed on Monday, shed 3.7 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan slipped another 0.2 per cent, Australia lost 1.8 per cent, but South Korea's market was trying to stabilise. The SGX Nifty also indicated a positive start for the Sensex and Nifty today.
In commodities, oil prices dropped nearly 4 per cent overnight.
Yesterday, the domestic indices registered the biggest single-day fall since February 1. Sensex plunged 807 points to 40,363, while Nifty fell 251 points to 11,829. According to experts, the markets have strong momentum on the downside in the near-term and recoveries are unlikely to sustain as and when they come. Therefore, traders should look to have a sell on rise approach. 11,800 is the immediate downside support for Nifty which if broken could lead to fall up to the 11,600 zone.
Read by: Kanishka Gupta