Lockdown Easing Could Support Stock Market Sentiment

Lockdown Easing Could Support Stock Market Sentiment

Indian government is considering easing of lockdowns in select cities and small shops with non-essential goods have been allowed to operate as well. Last week, the government also allowed some factories to start operations while maintaining strict rules for dealing with coronavirus. Many countries in Europe have announced easing of lockdowns. United States is the only major country suffering in a big way due to coronavirus pandemic and President Donald Trump has been facing backlash for not able to handle the situation properly.

The easing of lockdowns in many countries will boost sentiment of investors, at least temporarily. In the medium term, market experts and investors will start worrying about the economic impact of closedown for many weeks. While pharmaceutical and FMCG companies look like safe bets, many sectors could face tough times for upcoming quarters. The impact of coronavirus lockdown and the impact of massive decline in crude oil prices will not be easy to ascertain. We will need more data to comment about the long term and medium term impact of pandemic.

For the upcoming week, Indian markets should remain range-bound. The relief rally that was witnessed over the last few trading sessions seems to be ending. We might even see decline in NSE Nifty and market experts are considering 8800 as the immediate support for NSE Nifty.

Stock specific movements will be seen as many companies will be announcing quarterly results. It will be interesting to see the future guidance from some of the leading companies in various sectors. Market analysts are divided about the direction of the market until there is a clear data about coronavirus.

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