The Indian stock markets posted worst weekly fall in a decade last week, tracking a major sell-off in the global markets as investors grew more concerned about novel coronavirus' impact on the global economy. Those fears were made more concrete on Saturday when China reported that its factory activity had contracted at the fastest pace on record. China’s official Purchasing Managers’ Index fell to a fresh low of 35.7 in February against 50 in January.
In that context, investors back home will keenly await the release of India Manufacturing PMI numbers to be released today and Service PMI numbers on March 4.
Further, China and South Korea continued to report more coronavirus cases over the weekend, while the US, Australia, and Thailand reported their first cases of death. Throughout this week, market participants will keep a keen eye on the coronavirus situation and it is expected to remain the major trigger for the markets.
Traders will also react to India's GDP growth rate numbers published on Friday after market hours. India’s economy expanded by 4.7 per cent in the quarter ended December 31, a marginal increase from 4.5 per cent in the previous quarter. The report expected India's GDP to stagnate at 4.7 per cent in the March quarter also.
Besides, individual stocks will react to monthly sales data of auto and cement makers.
In the primary market, the initial public offer of SBI Cards and Payment Servies will open today. The company expects to raise around Rs 10,341 crore from the IPO with most brokerages recommending 'subscribe' to the issue.
In commodities, oil prices pared losses on Monday as hopes that a bigger than expected production cut from OPEC and stimulus from central banks could offset economic gloom from the coronavirus outbreak. Brent crude was at $50.32 a barrel, up 1.3 per cent.
Globally, stock futures plummeted on Monday as investors were rattled by weekend data from China. Futures for Japan’s Nikkei dropped 2 per cent. while Australia was down 2 per cent and New Zealand shares slipped 3.2 per cent. The SGX Nifty though shows a green start for domestic indices today.
Analysts say that traders should be cautious to take new position as 100-week EMA is placed at 11,211 which would be a crucial level for the next week. Meanwhile, Nifty is witnessing resistance in the sub 11,400 zone and therefore, traders should try to create shorts keeping a close eye on 11,400.
And, in the end, here's a stock idea by CapitalVia Global Research which recommends buying Avenue Supermarts Limited above Rs 2380 with the target of Rs 2,490 with the stop-loss of Rs 2,299.
Read by: Kanishka Gupta