9533-9731 ABOVE 9440; 9240 IMMEDIATE SUPPORT

9533-9731 ABOVE 9440; 9240 IMMEDIATE SUPPORT

WORLD MARKETS

After a positive start, US indices saw a sustained downward move through the session to end with cuts of nearly 2% as markets assessed the risks of reopening the economy too soon and Republic Senator Lindsey Graham introduced legislation to require China to cooperate with a coronavirus investigation or face sanctions. Nasdaq snapped a six-session winning streak.

Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, warned a Senate committee that the U.S. does not yet have the coronavirus outbreak “completely under control” and that the national death toll is “likely higher” than current levels.

Meanwhile, several countries including China and South Korea have experienced an uptick in coronavirus cases after restrictions were eased. Germany has also seen the reproduction rate of the virus tick upward.

U.S. consumer prices in April showed a drop of 0.8%, the most since 2008.

WTI crude futures climbed $1.6, or 6.8%, to settle at $25.78 per barrel while Brent futures rose 35 cents, or 1.2%, to $29.98 per barrel after Saudi Arabia said it would cut production by a further 1 million barrels per day in June, slashing its total production to 7.5 million bpd, down nearly 40% from April.

In Europe, FTSE rose 0.9% while DAX was flat and CAC fell 0.4%.

AT HOME

After falling nearly 2% in the morning, benchmark indices saw a smart rebound in noon to end with cuts of just about half a percent. Sensex settled at 31371, down 190 points while Nifty lost 42 points to finish at 9196. BSE mid-cap and small-cap indices fell 0.8% and 0.6% respectively. BSE Energy index nosedived 5%, becoming top loser among the sectoral indices, followed by 2.6% lower Oil & gas index. Telecom index jumped 4.3%, becoming top gainer, followed by 2.3% higher Power index.

FIIs net sold stocks, index futures and stock futures worth Rs 1662 cr, 872 cr and 195 cr respectively. DIIs were net sellers to the tune of Rs 364 cr.

Rupee appreciated 23 paise to end at 75.50/$.

IIP contracted 16.7% Y-o-Y in March Vs 4.5% growth in February.

Prime Minister Modi, in his address to the nation yesterday, announced a mammoth 20 lakh cr package,  that will be aimed at making the country self-reliant. The package is equivalent to nearly 10% of India’s GDP and includes measures worth Rs 7.79 lakh cr announced by government and RBI earlier. The details of the package will be revealed by Finance Minister Nirmala Sitharaman over next couple of days, starting today. He also said that the economic package will cover land, labour, liquidity and laws. He also said that details on the next phase of the lockdown will be given soon.

OUTLOOK

China's consumer price index for April rose 3.3% y-o-y, versus expectations of a 3.7% increase. Producer price index for April declined 3.1% y-o-y, as compared to a 2.6% fall expected.

Today morning, Asian markets are trading with cuts of 0.4%-0.9% while SGX Nifty is suggesting about 220 points higher start for our market.

In yesterday's report we had reiterated the view that 9104, the 33% retracement level of the entire 7511-9889 upmove, continues to be immediate support, upon breach of which, 8909, the bottom made on 21st April, would be the next important support.

Nifty broke 9104 support and plunged all the way to 9043, but rebounded from there to end at 9196 and is set to open near 9400 today.

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 4^th May, would be the next resistance zone to eye.

9240, yesterday’s top, which will now be the lower end of the gap created by today’s gap up opening, would act as immediate support. Below 9240, 9043, the low made yesterday, would be the next support to eye.