The domestic stock market slumped on Tuesday, dragged by weakness in IT and banks shares. Trading was volatile on account of expiry of weekly index options on the NSE.

The barometer index, the S&P BSE Sensex, tanked 1,203.18 points or 4.08% at 28,265.31. The Nifty 50 index tumbled 343.95 points or 4% at 8,253.80.

Rising coronavirus numbers across the globe exerted downside pressure on equities. Globally, there have been over 874,600 confirmed cases of COVID-19. At least 43,430 people have died so far while 184,952 have recovered. The total number of confirmed COVID-19 cases in India stands at 1,637.

In the broader market, the BSE Mid-Cap index fell 2.18% and the BSE Small-Cap index slipped 1.06%.

The market breadth was positive. On the BSE, 1128 shares rose and 1079 shares fell. A total of 169 shares were unchanged.

Selling was also triggered by MSCI deferring its decision on increasing India's weight in its global indices. It was widely expected that the global index provider would hike the country's weight, which could have attracted about $10 billion overseas money.

The Indian Ministry of Finance published a circular on October 2019 raising the statutory foreign portfolio investor (FPI) limit of Indian companies to the sectoral foreign investment limit, effective 1 April 2020. While the circular raises the statutory FPI limit to the sectoral foreign investment limit, it also provides an option for companies to restrict their respective FPI limits to a lower threshold, with the approval of the company's board of directors and its general body, before 31 March 2020, MSCI said on 31 March 2020.

MSCI will wait for the practical implementation of these changes and the systematic publication of the new sectoral limits applicable to Indian securities before making any changes to the MSCI Indexes. MSCI will therefore maintain the current FOL (foreign ownership limit) for Indian companies and will defer changes to the foreign inclusion factors (FIF) resulting from foreign ownership limit and foreign room changes as part of the May 2020 semi-annual index review (SAIR) and corporate events, it added.

MSCI said it would re-assess the situation prior to the August 2020 quarterly index review.

The domestic stock market will remain closed on Thursday (2 April 2020) on account of Ram Navmi.

Economy:

The government's fiscal deficit touched 135.2% of the full-year target at February-end, according to an official data released on Tuesday. In actual terms, the fiscal deficit or the gap between expenditure and revenue was Rs 10,36,485 crore, the data by the Controller General of Accounts (CGA) showed.

The output of Eight Core Industries, carrying 40.27% weight in the Index of Industrial Production (IIP), increased by 5.5% in February 2020 while output increased 1% in April to February 2019-20.

Meanwhile, the interest rate on small savings scheme has been cut. The Public Provident Fund will now offer 7.1%, after an 80 basis points cut in its interest rate. The interest rate on National Savings Certificate has been slashed by 110 bps to 6.8%. The interest rate on Kisan Vikas Patra has also been cut by 70 bps to 6.9%.

Foreign Markets:

Shares in Europe and Asia fell across the board on Wednesday following the negative cues overnight from Wall Street amid lingering concerns about the economic impact of the coronavirus pandemic.

In US, stocks ended lower on Tuesday as concerns remain over the spread of COVID-19 in the US and Europe in particular, with economic activity under lockdown amid a rising tally of infections and a mounting death toll.

In his latest appearance on Tuesday evening, early Wednesday in Asia, US President Donald Trump issues guidelines for 30-day social distancing while citing fears of a surge in the virus cases during the upcoming two weeks.

In the commodities market, Brent crude for June 2020 settlement fell 85 cents at $25.50 a barrel. The contract fell 2 cents, or 0.09% to settle at $22.74 a barrel in the previous trading session.

Buzzing Indian Segments:

The Nifty Bank index fell 4.92% to 18,202.50. The index rose 1.93% on Tuesday.

Among private lenders, Kotak Mahindra Bank (down 8.81%), City Union Bank (down 7.44%), Axis Bank (down 5.5%), Bandhan Bank (down 4.32%), ICICI Bank (down 4.02%), HDFC Bank (down 3.75%), RBL Bank (down 3.17%) and IndusInd Bank (down 2.52%) slumped.

Among PSU banks, Punjab National Bank (down 5.72%), State Bank of India (down 5.26%), Bank of Baroda (down 4.39%), Punjab & Sind Bank (down 2.24%), Andhra Bank (down 1.42%) and Canara Bank (down 0.17%) tumbled.

The Nifty IT index slumped 5.48% to 12,063.85. The index jumped 3.61% to 12,763.65 on Tuesday.

Tech Mahindra (down 9.21%), Mindtree (down 9.04%), TCS (down 6.23%), Infosys (down 5.65%), Oracle Financial Services Software (down 5.23%), HCL Technologies (down 4.93%), Wipro (down 3.48%), Persistent Systems (down 2.11%) and Hexaware Technologies (down 0.07%) slumped.

Stocks in Spotlight:

FMCG major Hindustan Unilever (HUL) fell 5.17% at Rs 2179.25, snapping its two day winning streak. The stock had gained 7.38% in two trading sessions.

Shares of Glaxosmithkline Consumer Healthcare fell 4.63% to Rs 9530.55.

HUL on Wednesday (1 April) announced completion of GlaxoSmithKline Consumer Healthcare's merger with itself. The merger was announced on 3 December 2018 and was subject to obtaining necessary approvals, which have now been secured. Every shareholder of GSK Consumer Healthcare India will get 4.39 shares of HUL.

Maruti Suzuki India slipped 1.03%. The company's total sales tumbled 47% to 83,792 units in March 2020 from 158,076 units in March 2019. On a month-on-month (M-o-M) basis, total sales tanked 43.04% to 83,792 units in March 2020 from 147,110 units in February 2020.

Hero MotoCorp rose 2.21%. The two-wheeler maker informed that members of the promoter and promoter group bought 2.76 lakh shares (0.14% of capital) of the company. With the purchase of these shares, the promoter and promoter group shareholding in the company increased from 34.63% to 34.77%.

Escorts slumped 9.64%. The company's Agri Machinery Segment (EAM) in March 2020 sold a total of 5,444 tractors, registering a decline of 54.3% against 11,905 tractors sold in March 2019. On a sequential basis, total sales tumbled 36.8% from 8,601 units recorded in February 2020.

Ashok Leyland declined 4.53% after the company reported a 90% decline in total sales at 2,179 units for March 2020, as against 21,535 units in the same month last year. On a month-on-month (M-o-M) basis, total sales tanked 81.01% in March 2020 from 11,475 units in February 2020.

Eicher Motors slipped 0.66% after unlisted subsidiary VE Commercial Vehicles (VECV) reported 82.7% decline in total sales to 1,499 units in March 2020 from 8,676 units in March 2019. On a month-on-month basis, VECV's total sales declined 67.31% in March 2020 from 4586 units in February 2020.

Mahindra & Mahindra tumbled 4.33%. M&M's total sales slumped 88% to 7401 units in March 2020 as compared to 62952 units in March 2019. While the total domestic sales are down by 90% to 6130 units, total exports shrunk by 68% to 1271 units in March 2020 over March 2019.

M&M's Farm Equipment Sector's total sales fell 31% to 13613 units in March 2020 from 19688 units in March 2019. The company's domestic tractor sales declined by 27% to 13418 units while its exports crashed 84% to 195 units in March 2020 over March 2019.

Sterling and Wilson Solar (SWSL) jumped 4.68% at Rs 80.50. The company said that it has received additional Rs 500 crore against loans outstanding from Sterling and Wilson and its subsidiary Sterling and Wilson International FZE, which was facilitated by Shapoorji Pallonji and Company Private and Khurshed Daruvala (promoters), as per the revised schedule of repayment approved by the board of directors of SWSL and communicated to the stock exchanges earlier. The proceeds have been utilized to reduce our external borrowings by an equivalent amount, the company said in a statement. An amount of Rs 1,000 crore had already been repaid from the date of listing till 31 December 2019. With this the total repayment stands at Rs 1,500 crore (inclusive of principal and interest).

GM Breweries jumped 7.55% to Rs 332.45. The company has received a license to manufacture hand sanitisers from Food & Drugs Administration (FDA), (Maharashtra State, Thane) which is valid from 31 March to 30 June 2020. The company said the commercial production of hand sanitizers will commence shortly.

Coal India shed 0.43% to Rs 139.40. The coal miner said that its total provisional coal production in March 2020 stood at 84.36 million tonnes as compared to 79.19 million tonnes in March 2019, registering a 6.5% rise. Provisional coal offtake dropped 10.3% to 53.45 million tonnes in March 2020 as against 59.60 million in March 2019.

NMDC declined 2.13% to Rs 78.30. NMDC's total iron ore production in March 2020 was 2.76 million tonnes as against 4.04 million tonnes in March 2019, recording a fall of 31.68%. On a sequential basis, NMDC reported 14.81% fall in iron ore production from 3.24 million tonne reported in February 2020. Total iron ore sales declined 24.58% to 2.70 million tonnes in March 2020 as against 3.58 million tonnes in March 2019. On a sequential basis, total sales declined 7.22% in March 2020 as against February 2020.

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