11400 CONTINUES TO BE NEXT IMPORTANT SUPPORT; 11825 IMMEDIATE HURDLE

11400 CONTINUES TO BE NEXT IMPORTANT SUPPORT; 11825 IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 plunged 4.4% each while Nasdaq collapsed 4.6% on worries that the coronavirus may be spreading in the U.S. The Dow had its worst day since February 2018 while the Nasdaq and S&P 500 posted their biggest one-day loss since August 2011.

The CDC confirmed on Wednesday evening the first U.S. coronavirus case of unknown origin in Northern California, indicating possible “community spread” of the disease. Yesterday, California Gov. said the state is monitoring 8,400 people for coronavirus.

Meanwhile South Korea has confirmed a total of more than 1,700 cases while more than 600 people have contracted the virus in Italy.

Microsoft cut its revenue guidance for its personal computing division as the supply chain is “returning to normal operations at a slower pace than anticipated,”. PayPal also issued a warning about its outlook.

The benchmark 10-year Treasury yield dipped below 1.25%, hitting a record low.

Brent crude fell 2.3% to $52.18 per barrel while WTI fell 3.4% to settle at $47.09, both hitting more than 1-year low.

European markets tumbled 2.7%-3.6%. Euro zone economic sentiment in February came in at 103.5, up from 102.6 in January and beating consensus expectations for a reading of 102.2, while consumer confidence came in at -6.6, up from -8.1 in January.

AT HOME

Benchmark indices fell four tenth of a percent, extending the losing streak to fifth straight day and Nifty closing at the lowest level in four months. Sensex lost 143 points to settle at 39745 while Nifty finished at 11633, down 45 points. Nifty mid-cap and small-cap indices fell 0.8% and 1.3% respectively, extending the losing streak to fourth straight day. Except 0.7% and 0.2% higher Consumer Durables and Healthcare indices respectively, all the BSE sectoral indices ended in red with Realty and Oil & Gas indices leading the tally, down 2.1% and 1.3% respectively.

FIIs net sold stocks and index futures worth Rs 3127 cr and 2200 cr respectively but net bought stock futures worth Rs 726 cr. DIIs were net buyers to the tune of Rs 3498 cr.

Rupee appreciated 3 paise to end at 71.63/$.

OUTLOOK

Today morning, Asian markets are trading with cuts of 1.7-3.3% and SGX Nifty is suggesting about 180 points lower start for our market.

In yesterday's report we had said that 11614, was the next important support, below which, 20-month moving average, placed around 11400, would be the next support. We had also advised holding on to short positions with the stop-loss of 11940.

Nifty broke 11614 support and plunged all the way to 11536, but rebounded from there to end at 11633. The benchmark however is set to open near 11450 today.

11400, where 20-month moving average is placed, continues to be next important support to eye. Below 11400, 11230, the 67% retracement level of the entire 10637-12430 upmove, would be the next support.

Immediate hurdle, after today’s gap down opening, would have moved lower to 11825, with the stop-loss of which, trading shorts can be held on to.

Q3 GDP data will be released today and is expected to show a growth of 4.6%, as against 4.5% growth of Q2 and 6.6% figure of Q3 lat year.