10975 CONTINUES TO BE CRUCIAL SUPPORT; 11537 IMMEDIATE HURDLE

10975 CONTINUES TO BE CRUCIAL SUPPORT; 11537 IMMEDIATE HURDLE

WORLD MARKETS

US markets nosedived 2.8%-3% as an emergency rate cut by the Federal Reserve failed to assuage concerns of slower economic growth due to the coronavirus outbreak.

The decision to cut rates by half a percentage point came two weeks before the Fed’s scheduled meeting as the central bank felt it was necessary to act quickly to combat the effect of the virus spreading worldwide. It was Fed’s first such emergency action coming in between scheduled meetings since the 2008 financial crisis.

The announcement comes after the G-7 said in a statement they will use policy tools to curb an economic slowdown. However, the statement contained no specific actions.

The yield on the benchmark 10 year U.S. Treasury note fell below 1% for the first time ever, while gold prices jumped 2.9% to settle at $1,644.40 per ounce. The 10-year yield was last at 0.9877% while spot gold traded at $1,642.94 per ounce.

WTI crude rose 43 cents, or 0.9%, to settle at $47.18 per barrel while  Brent fell 17 cents to $51.73 per barrel.

Main European markets gained 1%-1.1%. Eurozone consumer prices were up 1.2% in February year-on-year, following a 1.4% rise in January.

AT HOME

Bulls got a much needed respite as Sensex and Nifty climbed 1.3% and 1.5% respectively, breaking seven-day losing streak. Sensex added 479 points to settle at 38623 while Nifty finished at 11303, up 170 points. BSE mid-cap and small-cap indices rose 1.8% and 1.2% respectively. All the BSE sectoral indices ended in green with Metal index leading the tally, up 5.7%, followed by 4% higher Power index.

FIIs net sold stocks worth Rs 2416 cr but net bought index futures and stock futures worth Rs 241 cr and 2040 cr respectively. DIIs were net buyers to the tune of Rs 3135 cr.

Rupee depreciated 57 paise to end at 73.25/$.

OUTLOOK

Today morning, Nikkei is up 0.5% while Shanghai and Hang Seng are modestly lower. SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that 34-Month moving average, placed around 10970, continued to be crucial support to eye while immediate hurdle on the hourly chart had moved lower to 11537.

Nifty, after touching a low of 11152, rebounded to close at 11303 and is set to open near 11250 today.

11537, which is also the upper end of the gap created by Friday's gap down opening, continues to be immediate upside hurdle.

10975, where 34-month moving average is placed, continues to be crucial support.