9038 IS THE IMMEDIATE HURDLE; 8180 IMMEDIATE SUPPORT

9038 IS THE IMMEDIATE HURDLE; 8180 IMMEDIATE SUPPORT

WORLD MARKETS

US indices tumbled 3.4%-4.1% on Friday on worries over the economic damage by coronavirus as the U.S. became the country with the most confirmed cases.

As on Friday, global cases of the coronavirus surged to more than 542,700 with at least 85,996 in the U.S. which made the U.S. overtake China as the country with the most confirmed cases in the world. President Donald Trump held a phone call with Chinese leader Xi Jinping, saying the two countries are “working closely together” to fight the pandemic. Meanwhile, UK Prime Minister Boris Johnson has tested positive for the coronavirus.

The House approved the historically massive $2 trillion coronavirus relief package on Friday and send it to President Trump to be signed.

Brent curde fell 5.1% to $24.99 per barrel while U.S. crude slipped $1.09, or 4.8%, to settle at $21.51 per barrel.

European markets fell 3.2%-5.2%, monitoring the spread of coronavirus while policymakers scrambled to agree on a unified response.

For the week, Dow surged 12.8%, its biggest weekly gain since 1938. The S&P 500, at 10.3% and Nasdaq at 9.1% had their best week since March 2009.

AT HOME

After rising more than 4% at the open, benchmark indices gave away all the gains through the volatile session to end mixed. Sensex settled at 29815, down 131 points while Nifty finished at 8660, up 18 points. BSE mid-cap index fell 0.3% while small-cap index rose 0.3%. BSE Telecom index tumbled 5.2%, becoming top loser among the sectoral indices, followed by 2.4% lower Auto index. Bankex and Metal index were the top gainers, up 1% and 0.5% respectively.

FIIs net bought stocks and stock futures worth Rs 356 cr and 482 cr respectively but net sold index futures worth Rs 29 cr. DIIs were net sellers to the tune of Rs 1704 cr.  However, FII figure included Rs 2200 cr on account fo 2.5% stake sell in HDFC Life by Standard Life.

Rupee appreciated 26 paise to end at 74.89/$.

For the week, Sensex and Nifty ended lower by 0.3% and 1% respectively, extending the losing streak to sixth straight week, but rebounding more than 15% from intraweek lows.

Reserve Bank of India announced a host of measures aimed at minimising the damage from Covid-19.

-The MPC decided by 4-2 majority to reduce repo rate by 75 basis points to 4.4%. The reverse repo rate was cut by 90 bps to 4%, creating an asymmetrical corridor.

-A moratorium of three months of EMIs on all outstanding loans was announced.

The apex bank also announced following three measures that will make available a total Rs 3,74,000 crore to the country's financial system.

-Auction of targeted long term repo operations of 3-year tenor for total amount Rs 1,00,000 crore at floating rate.

— Reduction of CRR for all banks by 100 basis points. Will release Rs 1,37,000 crore across banking system.

— Accommodation under Marginal Standing Facility to be increased from 2% from SLR to 3% with immediate effect till June 30. It will release Rs 1.37 lakh crore into the system.

Moody's Investors Service cut India's growth forecasts for 2020 calendar year to 2.5% from 5.3%.

OUTLOOK

US President Donald Trump on Sunday extended the national social distancing guidelines to April 30 after suggesting that the coronavirus death rate would likely peak in two weeks.

Today morning, Asian markets are trading with cuts of 1.6%-4% and SGX Nifty is suggesting about 200 points lower start for our market.

In Friday's report we had said that 8883, the top made the previous Friday, was the upside target/resistance to eye upon crossover of which 9450, the 50% retracement level of the 11390-7511 fall seen since 5th March, would be the next target to eye.

Nifty opened above 8883 hurdle and touch a high of 9038 but slipped from there to end at 8660 but is set to open below 8500 today.

9038, the top made last week, would now be the immediate hurdle to eye, upon crossover of which, 9134, 9390 and 9970, the 33%, 38.2% and 50% retracement levels of the entire 12430-7511 fall, would be subsequent levels to eye.

8180 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.