12150 IS THE IMMEDIATE SUPPORT; 12272 IMMEDIATE HURDLE

12150 IS THE IMMEDIATE SUPPORT; 12272 IMMEDIATE HURDLE

WORLD MARKETS

Dow fell 0.6% while S & P 500 and Nasdaq slipped 0.9% each on Friday after the second U.S. case of the deadly coronavirus was confirmed, stoking concerns over the sickness’ impact on the global economy.

Shares of United Airlines and American both fell more than 5%. Las Vegas Sands and Wynn Resorts also dropped more than 3% each. Treasury yields fell, pushing bank shares lower.

WTI futures fell 2.5%, or $1.40, to settle at $54.19 a barrel while Brent crude dropped 2.2% to settle at $60.69

Meanwhile, American Express and Intel shares climbed after fourth-quarter numbers topped estimates.

European markets gained 0.9%-1.4%. IHS Markit’s euro zone composite flash PMI stayed at 50.9 in January, missing the 51.2 estimate. Manufacturing PMI reading came in at 47.8, representing a marked improvement on December’s 46.3 and the January expectation of 46.8.  Optimism about the 2020 outlook increased, with the composite future output index advancing from 59.4 in December to 61.2, its highest since September 2018.

In the U.K., January data came in above forecast with the flash composite PMI hitting 52.4 against an expectation of 50.6, with both manufacturing and services exceeding expectations.

The Dow, S&P 500 and Nasdaq all posted their first weekly loss of 2020. The Dow and S&P 500 both fell at least 1% week to date while the Nasdaq slid 0.8%. For the week, WTI and Brent plunged 7.4% and 6.4% respectively.

AT HOME

Benchmark indices rose six tenth of a percent, extending the winning streak to second straight day. Sensex settled at 41613, up 226 points while Nifty added 68 points to finish at 12248. BSE mid-cap and small-cap indices rose 0.8% and 0.5% respectively. Except marginally lower Energy and Oil & Gas indices, all the BSE sectoral indices ended higher with Capital Goods and Consumer Durables indices leading the tally, up 1.5% and 1.3% respectively.

FIIs net bought stocks and stock futures worth Rs 659 cr and 26 cr respectively but net sold index futures worth Rs 581 cr. DIIs were net buyers to the tune of Rs 418 cr.

Rupee depreciated 6 paise to end at 71.32/$.

For the week, Sensex and Nifty lost 0.8% each, breaking two-week winning streak.

ICICI Bank's Q3 earnings met estimates. Gross NPA ratio improved 42 bps q-o-q to 5.95% while net NPA ratio fell 11 bps to 1.49%. Slippages rose to Rs 4363 cr from Rs 2482 cr.

OUTLOOK

Markets in Australia, China, Hong Kong, Singapore, South Korea, and Taiwan are closed for public holidays. However, Nikkei is down more than a percent and half and US futures are down nearly a percent on concerns over deadly and contagious coronavirus, which continues to spread. More than 2,000 people, mostly in China, have been affected by the new respiratory illness and 56 are reported to have died from the disease.

Meanwhile, SGX Nifty is suggesting about 80 points lower start for our market.

In Friday's report we had said that 12088, the low made on Wednesday, continued to be immediate support while 12265 continued to be immediate hurdle.

Nifty, on Friday, touched a high of 12272 before closing at 12248 and is set to open below 12200 today.

12150, the 67% retracement level of the recent 12088-12272 upmove, is the immediate support on the way down, upon breach of which, 12088, the low made last week, would be the next important support.

12272, the top made on Friday, is the immediate hurdle, upon crossover of which, 12430, the top made last week, would be the next target/hurdle.

HDFC and Dr Reddy's will report their quarterly earnings today.