11218-11185 IS THE SUPPORT ZONE; 11450 IMMEDIATE HURDLE

11218-11185 IS THE SUPPORT ZONE; 11450 IMMEDIATE HURDLE

 

WORLD MARKETS

 

After plunging 2.5%-3.5% in the first half on account of allegations surrounding bank dealings and rising coronavirus infections, US indices rebounded later to end with much lesser cuts.  Dow and S & P 500 eased 1.8% and 1.2% respectively while Nasdaq fell just 0.1%. S&P 500 fell for the fourth consecutive day and the Dow had its worst day since Sept. 8.

 

Media reports, citing confidential documents submitted by banks to the U.S. government, said that several global lenders allegedly moved suspicious funds over a period of nearly two decades. Shares of Standard Chartered and HSBC tumbled following the news.

 

Meanwhile, reports suggested that U.K. is reportedly considering another national lockdown as daily new infections rise.

 

Coming back to the US, prospects of further U.S. coronavirus fiscal stimulus became bleaker as lawmakers brace for a Supreme Court confirmation fight as President Donald Trump rushes to nominate a successor to Justice Ruth Bader Ginsburg, who died on Friday.

 

Brent crude slipped $2, or 4.6%, to $41.15 a barrel while WTI crude fell $1.80, or 4.4%, to settle at $39.31 a barrel. Dollar index rose 0.6% to 93.55. Spot gold dropped 2.1% to $1,909.05 per ounce.

 

European markets tumbled 3.4%-4.4%.

 

AT HOME

 

Benchmark indices nosedived more than 2%, extending the losing streak to third straight day and closing at the lowest level in more than a month. Sensex settled at 38034, down 811 points while Nifty lost 254 points to finish at 11250. BSE mid-cap and small-cap indices collapsed 3.4% and 3.6% respectively. All the BSE sectoral indices ended in red with Telecom and Realty indices leading the losses, down 5.7% each.

 

FIIs net sold stocks and stock futures worth Rs 540 cr and 330 cr respectively but net bought index futures worth Rs 432 cr. DIIs were net sellers to the tune of Rs 518 cr.

 

Rupee appreciated 6 paise to end at 73.37/$.

 

OUTLOOK

 

Today morning, Shanghai and Hang Seng are down 1% and 0.6% respectively while Nikkei continues to be shut. SGX Nifty is suggesting around 25 points higher start for our market.

 

Readers would recall that last week, on Thursday, we had advised trailing the stop-loss in long positions to 11460, where 20-DMA was placed. In yesterday's report we had said that 11400, the 50% retracement level of the recent 11185-11618 upmove, which also coincides with 34-DMA, is the next important support to eye.

 

Nifty broke 11400 support and plunged all the way to 11218 before closing at 11250.

 

11218, the low made yesterday, also coincided with a trendline support adjoining recent bottoms on the daily chart.  Immediate previous bottom on the daily chart is placed at 11185. This makes 11218-11185 next important support zone.

 

11450, where 20-DMA is placed, would work as immediate hurdle.