9043 BELOW 9240; 9584 IS IMMEDIATE HURDLE

9043 BELOW 9240; 9584 IS IMMEDIATE HURDLE

WORLD MARKETS

US indices fell 1.6%-2.2% after Federal Reserve chairman warned that economic recovery from the coronavirus pandemic would take many months and more may need to be done to support the economy.

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Powell said in prepared remarks for a webcast event with the Peterson Institute for International Economics.

Brent crude fell 79 cents, or 2.6%, to settle at $29.19 per barrel, while WTI crude shed 49 cents, or 1.9%, to settle at $25.29 per barrel.

European markets slipped 1.5%-2.8%.  U.K. GDP contracted by 5.8% month-on-month in March, the sharpest monthly decline on record.

AT HOME

After opening with a big-gap up opening of nearly 4% on the back of yesterday's announcement made by the Prime Minister, benchmark indices gave away nearly half of the gains to end higher by 2%. Sensex settled at 32008, up 637 points while Nifty added 187 points to finish at 9383. Both the indices closed at the higest level since 30th April, 2020. BSE mid-cap and small-cap indices rose 1.5% and 2% respectively. BSE Capital Goods and Industrials indices climbed 5.1% and 4% respectively, becoming top gainers among the sectoral indices. Healthcare and FMCG indices were the top losers, down 0.8% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 283 cr and 49 cr respectively but net bought stock futures worth Rs 469 cr. DIIs were net buyers to the tune of Rs 233 cr.

Rupee appreciated 3 paise to end at 75.47/$.

Finance Minister Nirmala Sitharaman yesterday announced 5.94 lakh cr stimulus via 16 measures. Out of these measures 6 were related to MSMEs, 2 for EPF, 2 for NBFCs/HFCs/MFIs, 1 for DISCONS, 1 for Contractors, 1 for real estate and 3 for Taxation.

These include Rs 3 lakh crore via the collateral free automatic loans for MSMEs, another Rs 20,000 crore subordinate debt for stressed MSMEs and Rs 50,000 crore of equity infusion for MSMEs through a Fund of Funds.

Liquidity relief of Rs 2,500 crore to over three lakh firms through Employee Provident Fund support and another Rs 6,750 crore to employers and employees via reduced EPF contribution.

For NBFCs, a Rs 30,000 crore liquidity scheme was announced through which investments can be made in primary and secondary market transactions in investment-grade debt paper issued by NBFCs, MFIs or HFCs, fully guaranteed by the government of India. Rs 45,000 crore support to NBFCs via a partial credit guarantee scheme was also announced.

Rs 90,000 crore has been earmarked for power distribution companies (DISCOMs), and Rs 50,000 crore liquidity is proposed to be released through rate reductions in Tax Deducted at Source (TDS)/Tax Collection at Source (TCS).

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.6%-1.2% and SGX Nifty is suggesting around 100 points lower start for our market.

In yesterday's report we had said that 9440, the top made on Monday, is the immediate hurdle to eye, upon sustained crossover of which, 9533-9731, the gap created by the big gap down opening on 4th May, would be the next resistance zone to eye.

Nifty, after touching a high of 9584 at the open, slipped to end at 9383 and is set to open near 9300 today.

9240, the lower end of the gap created by yesterday's gap-up opening, would now serve as immediate support. Below 9240, 9043, the low made on Tuesday, would be the next support to eye.

9584, the top made yesterday, which fell into the middle of the 9533-9731 resistance zone mentioned above, is the immediate hurdle to eye. Above 9584, 9731, the upper end of the 9533-9731 gap, would be the next target/resistance.