NIFTY SET TO TEST 34-MONTH MOVING AVERAGE; 11390 IMMEDIATE HURDLE

NIFTY SET TO TEST 34-MONTH MOVING AVERAGE; 11390 IMMEDIATE HURDLE

WORLD MARKETS

US indices plunged 3.1%-3.6% as fears about the coronavirus disrupting the global economy continued to grip markets as countries around the world extended quarantines and travel restrictions.

California declared a state of emergency after a coronavirus-related death and 53 confirmed cases in the state. The number of infections in New York also doubled overnight to 22 as the state ramps up its testing.

The 10-year Treasury yield fell to an all-time low below 0.9%.

Initial claims for state unemployment benefits slipped 3,000 to 216,000 for the week ended Feb. 29.

Brent fell 2.4% to $49.93, while U.S. WTI fell 1.88%, to settle at $45.90 per barrel. OPEC cut production by 1.5 million barrels per day through the second quarter of the year.

European markets fell 1.5%-1.9%.

AT HOME

After rising more than a percent in the morning, benchmark indices gave away most of the gains in noon to end higher by just a fifth of a percent. Sensex settled at 38470, up 61 points while Nifty added 18 points to finish at 11269. BSE mid-cap and small-cap indices gained 0.3% each. BSE Telecom and FMCG indices were the top gainers among the sectoral indices, rising 1.2% and 0.9% respectively while Energy and Realty indices were the top losers, down 1.7% and 1.1% respectively.

FIIs net sold stocks and index futures worth Rs 2477 cr and 342 cr respectively but net bought stock futures worth Rs 1038 cr. DIIs were net buyers to the tune of Rs 2511 cr.

Rupee depreciated 15 paise to end at 73.35/$.

Yes Bank soared on reports that the government may ask State Bank of India to lead a consortium that will buy stake in Yes Bank.

OUTLOOK

In a dramatic development, RBI yesterday put Yes Bank under moratorium from March 5 to April 3. During this period depositors will not be allowed to withdraw more than Rs 50000. RBI also superseded the Board of Yes Bank for a period of 30 days and said that it will explore and draw up a scheme in next few days for the banks's reconstruction or amalgamation.

Meanwhile SBI has said that it has to in-principle approval by it's board to explore investment opportunity in Yes Bank.

Today morning, Asian markets are trading with cuts of 0.9%-2.4% and SGX Nifty is suggesting about 300 points lower start for our market.

In yesterday's report we had reiterated the view that 11537, the upper end of the gap created by Friday's gap down opening, continued to be immediate upside hurdle while 10975, where 34-month moving average was placed, continued to be crucial support.

Nifty, after touching a high of 11389, slipped to end at 11269 and is set to open near 11000 today.

10975, where 34-month moving average is placed, continues to be crucial support. Below 10975, 10637, the bottom made in August 2019, would be the next major support to eye. 11390, the top made yesterday, would now act as the immediate hurdle.