11100 IS THE NEXT MAJOR SUPPORT; 11385-11536 IS THE RESISTANCE ZONE

11100 IS THE NEXT MAJOR SUPPORT; 11385-11536 IS THE RESISTANCE ZONE

WORLD MARKETS

After plunging nearly 4% in the initial trade, Dow and S & P 500 rebounded smartly towards the end of the session to end lower by just 1.4% and 0.8% respectively while Nasdaq closed flat.

Initial meltdown was attributed to rising fears of Coronavirus. A Google employee tested positive for the coronavirus while New Zealand and Nigeria reported their first coronavirus cases. Also, South Korea, confirmed more than 500 new cases and China reported 327 additional cases.

The recovery happened after Fed Chairman Jerome Powell said in a statement the central bank will “act as appropriate” to support the economy amid the coronavirus outbreak.

The benchmark U.S. 10-year Treasury yield touched a fresh record low of 1.114% before recovering to 1.15%.

WTI crude plunged 4.9%, to $44.76 per barrel while Brent fell 3.2% to $50.74, hitting lowest levels in 14 months.

European markets ended with deep cuts of 3.2%-3.9%.

For the week, US indices nosedived 10.5%-12.4%, suffering their worst fall since the financial crisis of 2008. European markets fell nearly 12%. Asian markets fell 4.3%-10%. WTI and Brent oil plunged about 15% and 14% for the week, their biggest weekly decline since December 2008.

AT HOME

Sensex and Nifty nosedived 3.6% and 3.7% respectively, suffering the worst percentage fall in 4-1/2 years and extending the losing streak to sixth straight day. Both the indices ended at the lowest level in nearly 4-1/2 months. Sensex settled at 38297, down 1448 points while Nifty lost 431 points to finish at 11201. Nifty mid-cap and small-cap indices tumbled 3.3% and 3.8% respectively to close at more than 2-month low. All the BSE sectoral indices ended in red with Metal and IT indices leading the losses, down 7% and 5.6% respectively.

FIIs net sold stocks and index futures worth Rs 1429 cr and 1631 cr respectively but net bought stock futures worth Rs 2118 cr. DIIs were net buyers to the tune of Rs 7621 cr.

Rupee depreciated 61 paise to end at 72.22/$.

For the week, Sensex and Nifty collapsed 7% and 7.3% respectively, marking the largest weekly cut since the week ended  10th July 2009.

India's Q3 FY20 GDP growth came in at 4.7%, its slowest rate in more than 6 years, weighed down by a contraction in manufacturing sector output. The figures for September quarter was revised upward to 5.1% from 4.5% earlier. Reading for June quarter was revised higher to 5.6% from 5%. For the full year, NSO stuck to its earlier projection of 5% growth,  implicitly assuming that the economy would further slow a tad in the fourth quarter (January-March) to 4.6%.

Maruti February sales fell 1.1% to 1.47 lk units. Tata Motors domestic sales plunged 34% to 38002 units. M & M sales were down 42% at 32476 units. Eicher Motors' CV sales fell 29.2% to 4439 units.

OUTLOOK

Data on Saturday showed China’s official Purchasing Managers’ Index (PMI) fell to a record low of 35.7 in February from 50.0 in January. 

Australia, Thailand and the U.S. reported over the weekend their first coronavirus-related deaths. At least 85,000 cases of the coronavirus have been confirmed around the world so far, along with more than 2,900 virus-related deaths.

Today morning, Asian markets are trading with gains of 0.7%-1.3% and SGX Nifty is suggesting about 100 points higher start for our market.

In Friday's report we had said that 11400, where 20-month moving average was placed, was the next important support below which, 11230, the 67% retracement level of the entire 10637-12430 upmove, would be the next support.

Nifty, opened below the 11400 support and plunged all the way to 11175 before closing at 11201 and is set to open near 11300 today.

11100, where an upward sloping trendline adjoining bottoms made in October 2018 and August 2019 is placed, is the next important support to eye. Below 11100, 34-month moving average, placed around 10950, would be the next major support. On the way up, 11385-11536, the gap created by Friday's gap down opening, would work as immediate resistance zone. Meanwhile, trading shorts can be held on to with the stop-loss of 11536.