NIFTY NEARS BIG 34-MONTH MOVING AVERAGE SUPPORT; 11537 IS THE IMMEDIATE HURDLE

NIFTY NEARS BIG 34-MONTH MOVING AVERAGE SUPPORT; 11537 IS THE IMMEDIATE HURDLE

WORLD MARKETS

US indices soared 4.5%-5.1%, with the Dow posting its biggest gain since March 2009 and snapping a 7-day losing streak, on expectation of a coordinated action from central banks to combat the economic impact of the coronavirus outbreak.

Media reports suggested that a conference call between representatives of the Group of Seven industrialized nations is expected to happen on Tuesday at 7 a.m. ET, and will be led by U.S. Treasury Secretary Steven Mnuchin and U.S. Federal Reserve Chairman Jerome Powell

Earlier, Bank of Japan said it will “strive to stabilize markets and offer sufficient liquidity via market operations and asset purchases.”

US ISM manufacturing index fell to 50.1 in February, the lowest level since the end of 2019. It also came below an estimate of 50.8.

Brent crude rose 4.3%, or $2.20, to $51.87 per barrel while WTI crude gained $1.99, or 4.45%, to settle at $46.75 per barrel.

In Europe, FTSE and CAC  rose 1.1% and 0.4% respectively while DAX fell 0.3%.

AT HOME

Afer gaining nearly 2%, Sensex and Nifty nosedived in late noon trade on news of 2 fresh coronavirus cases in India to end lower by 0.4% and 0.6% respectively, extending the losing streak to seventh straight day. Sensex slipped 153 points to settle at 38144 while Nifty finished at 11132, down 69 points. BSE mid-cap and small-cap indices fell 0.6% and 0.8% respectively. BSE Metal and Oil & Gas indices were the top losers among the sectoral indices, down 2% each while IT and Teck indices were the sole gainers, up 1.1% and 0.6% respectively.

FIIs net sold stocks worth Rs 1355 cr but net bought index futures and stock futures worth Rs 3159 cr and 820 cr respectively. DIIs were net buyers to the tune of Rs 1139 cr.

Rupee depreciated 46 paise to end at 72.68/$.

Hero MotoCorp sales fell 19.3% to 4.98 lk units. TVS Motors' February sales fell 15.4% y-o-y to 2.53 lk units. Eicher Motors' Royal Enefield sales rose 1% to 63536 units.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.4% while SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had said that 11385-11536, the gap created by Friday's gap down opening, would work as immediate resistance zone while 11100, where an upward sloping trendline adjoining bottoms made in October 2018 and August 2019 was placed, was the next important support to eye below which, 34-month moving average, placed around 10950, would be the next major support. We had also advised holding on to short positions with the stop-loss of 11536.

Nifty, after touching a high of 11433, plunged to touch a  low of 11036 and finally closed at 11132 and is set to open near 11150 today.

34-Month moving average, placed around 10970, continues to be crucial support to eye. If 10970 gives way, 10637, the bottom made in August 2019, would be the next major support.

Meanwhile, immediate hurdle on the hourly chart has moved lower to 11537, with the stop-loss of which, trading shorts can be held on to.