The Indian equity markets look set for a gap-up opening today, as indicated by the SGX Nifty which was up over 200 points as of 7:30 AM in line with gains in global stocks. This is no thanks to the news on the coronavirus which remains grim although radical stimulus steps by governments and central banks have provided some comfort to economies.
India’s cumulative coronavirus infections have reached 1,251, registering the highest single-day increase of 227 cases yesterday, while the death toll rose to 32. Worldwide, the number of coronavirus cases has reached more than 775,000, while more than 37,000 have died.
Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the flow of vital medical supplies.
Meanwhile, strategists at JPMorgan Chase have concluded that most risk assets have seen their low points for the recession that’s gripped economies around the world, although, coronavirus infection rates remain a “wild card”.
On the other hand, the World Bank said the coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China.
On the Wall Street, US stocks rose on Monday as President Donald Trump extended his stay-at-home guidelines. Led by healthcare stocks, the Dow ended Monday up 3.19 per cent, while the S&P 500 gained 3.35 per cent and the Nasdaq 3.62 per cent.
Asian share markets also managed a tentative rally on Tuesday. A sizable improvement in Chinese manufacturing in March lifted investors' spirit. China’s official purchasing manufacturers’ index bounced to 52, from a record-low 35.7 in February while services PMI stood at 52.3 versus the previous 29.6 as factories began to re-open.
As such, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent. Japan's Nikkei edged up 0.6 per cent and South Korea 1.5 per cent.
In commodities, oil prices plunged to the lowest in almost 18 years on Monday as lockdowns for the virus squeezed demand. Prices tried to steady early Tuesday, with Brent crude futures gaining 25 cents to $23.01 a barrel.
According to analysts, the extreme volatility seen in the Indian equity markets is unlikely to change anytime soon and traders should minimise the risk by opting for hedged options strategies.
Read by: Kanishka Gupta