12000 BELOW 12088; 12272 IS IMMEDIATE HURDLE

12000 BELOW 12088; 12272 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 fell 1.6% each while Nasdaq plunged 1.9% after more cases of the coronavirus were confirmed over the weekend, intensifying worries over the virus’ impact on the world economy.

Chinese officials have now confirmed more than 2,800 cases of the new strain of coronavirus, with the death toll rising to 81 and 461 people in critical condition. The virus has now been detected in a host of other countries in Asia and beyond, including the U.S., France, Australia and Canada. In the U.S., a fifth case of coronavirus was confirmed over the weekend.

Traditional safe havens such as Treasurys and gold got a lift. The 10-year U.S. Treasury yield fell to 1.61% and hit its lowest level since October while gold futures climbed about 0.6%.

US crude fell 1.9%, or $1.05, to settle at $53.14 per barrel, for the fifth straight session of losses, and the lowest closing price since Oct. 15. Brent crude fell 2.5%, or $1.53, to $59.16.

European markets nosedived 2%-2.7%. Germany's Ifo business sentiment index fell from 96.3 in December to 95.9, missing the forecast of 97.0. The Ifo Institute also projected that Germany will likely grow by 0.2% in the first three months of 2020 as demand in the ailing industrial sector slowly returns.

AT HOME

It was a weak start to the week as Sensex and Nifty tumbled 1.1% each on rising concerns over the economic fallout from the Chinese coronavirus outbreak. Sesnex settled at 41155, down 458 points while Nifty lost 129 points to finish at 12119. BSE mid-cap index fell 0.4% while Small-cap index ended flat. Except 1.4% higher Healthcare index, all the BSE sectoal indices ended in red with Metal index leading the tally, down 3.2%, followed by 1.8% lower Telecom index.

FIIs net sold stocks, index futures and stock futures worth Rs 439 cr, 2269 cr and 482 cr respectively. DIIs were net buyers to the tune of Rs 11 cr.

Rupee depreciated 11 paise to end at 71.44/$.

HDFC was a strong showing as NII and net profit beat estimates and AUM showed the best growth in three quarters while the individual loan book surged over 16%. Gross NPAs though rose for the 5th straight quarter.

Dr Reddy soared 5.6% after reporting operationally strong quarter. Revenue rose 13.9% y-o-y to Rs 4384 cr, EBITDA surged 24.1% to Rs 1073 cr, margin improved 200 bps to 24.5%. Due to an impairment charge of Rs 1110 cr., the company reported a net loss of Rs 570 cr.

OUTLOOK

Markets in China and Hong Kong are closed on Tuesday for holidays. Nikkei is trading down 0.8% and SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had said that 12150, the 67% retracement level of the recent 12088-12272 upmove, was the immediate support, upon breach of which, 12088, the low made last week, would be the next important support.

Nifty broke 12150 support and plunged all the way to 12107 before closing at 12119 and is set to open near 12100 today.

12088, the low made last week, is the next support to eye. Below 12088, 12000, where an upward sloping trendline adjoining recent bottoms on the daily chart is placed, would be the next important support.

12272, the top made on Friday, continues to be immediate hurdle.

Maruti will report its quarterly earnings today.