10070 IS THE HURDLE; 9726 IMMEDIATE SUPPORT

10070 IS THE HURDLE; 9726 IMMEDIATE SUPPORT

WORLD MARKETS

After plunging 2-3% at the open, US indices saw a stunning rebound through the session to end with gains of 0.6%-1.4% as announcement of fresh measures by Fed to support the market boosted the sentiment.

Fed said it would buy individual corporate bonds and signaled a broader approach to corporate bond buying. The Fed had indicated earlier in the spring that it would buy bonds on the primary market, but yesterday’s announcement expanded its operations into the secondary market.

The lower start was on the back of second wave of coronavirus cases as states including Alabama, California, Florida and North Carolina report a rise in daily new cases. Texas and North Carolina reported a record number of virus-related hospitalizations Saturday. Media report that a district of Beijing is in a “wartime emergency” due to the discovery of a new cluster of infections centered around a wholesale food market, also weighed on the sentiment.

WTI crude rose 86 cents, or 2.4%, to settle at $37.12 per barrel while Brent rose 96 cents, or 2.5%, to $39.73 per barrel.

Main European markets fell 0.3%-0.7%.

AT HOME

Benchmark indices fell 1.6%, giving away a third of the mammoth rebound that happened from the opening lows on Friday. Sensex settled at 33228, down 552 points while Nifty lost 159 points to finish at 9813. BSE mid-cap index fell 1.2% while small-cap index ended flat. Except 0.9% and 0.3% higher Energy and Healthcare indices respectively, all the BSE sectoral indices ended in red with Bankex and Realty indices leading the losses, down 3.5% and 3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 2960 cr, 355 cr and 2027 cr respectively. DIIs were net buyers to the tune of Rs 1076 cr.

Rupee depreciated 18 paise to end at 76.02/$.

Tata Motors reported weak set of numbers with domestic business as well as JLR reporting steep losses. Management guided for a weak first quarter.

OUTLOOK

Today morning, Asian markets are trading with gains of 1%-3% and SGX Nifty is suggesting around 160 points higher start for our market.

In yesterday's report we had said that 9544, the low made Friday, was the important support to eye while 10070, the 67% retracement level of the recent 10328-9544 fall, was the immediate hurdle.

Nifty, after making a high of 9943 in the initial trade, slipped to end at 9813 but is set to open near 10000 today.

10070, the 67% retracement level of the recent 10328-9544 fall, continues to be immediate hurdle, upon crossover of which, 10328, the top made last week, would be the bigger resistance to eye.

9726, the low made yesterday, which roughly coincides with the 61.8% retracement level of Friday's 9544-9996 pullback, would now act as immediate support.