7500-7340 BELOW 7832; 8883 IMMEDIATE HURDLE

7500-7340 BELOW 7832; 8883 IMMEDIATE HURDLE

WORLD MARKETS

After rising more than 2%, US indices nosedived nearly 6% from the top of the day in late trade to end with cuts of 3.8%-4.6% on Friday.

The reversal was on the back of a number of factors, including a stay-at-home order for New York State, a swift reversal in crude prices and a strengthening dollar. News reports that a clearing firm at the CME Group was unable to meet its capital requirements, also weiged on the sentiment.

US crude plunged $2.79, or 11.1%, to $22.43 per barrel while Brent fell $1.49 or 5.2%, to settle at $26.98.

European markets gained between 0.8%-5% with CAC leading the gains.

For the week, Dow nosedived 17% while S & P 500 and Nasdaq fell 11.5% and 12.6% respectively, posting their worst weekly performances since the financial crisis in 2008.

AT HOME

Sensex and Nifty climbed 6% each on Friday, breaking four-day losing streak. Senex settled at 29915, up 1627 points while Nifty finished at 8745, up 482 points. BSE mid-cap and small-cap indices rose 4.2% and 4% respectively. All the BSE sectoral indices ended higher with Energy and Oil & Gas indices leading the tally, up 10% and 9% respectively.

FIIs net sold stocks and stock futures worth Rs 3346 cr and 1051 cr respectively but net bought index futures worth Rs 2428 cr. DIIs were net buyers to the tune of Rs 2431 cr.

Rupee depreciated 9 paise to end at 75.18/$.

For the week, benchmark indices plunged 12.2% each, their biggest weekly fall since the week ended 24th October 2008 and closing at three year low.

SEBI on Friday halved position limits for certain stock futures, restricted short-selling of index derivatives and raised margin rates for some shares in a bid to curb "abnormally high" volatility.

OUTLOOK

Today morning, US futures are down nearly 4% after a massive funding package to combat the impact of coronavirus did not get enough votes in a key Senate procedural vote Sunday evening. Heng Seng and Shanghai are down 4.7% and 2.3% respectively, Nikkei is little changed. SGX Nifty is suggesting nearly 1000 points lower start for our market.

In Thursday's report we had said that 8020, where 500-week moving average was placed, was the crucial support to eye. Nifty, on Thursday, after touching a low of 7832, rebounded to end at 8263. On Friday we had said that 8600, 8995 and 9390, the 33%, 50% and 67% retracement levels of the recent 10160-7832 fall, were the resistance levels to eye. The benchmark, after touching a high of 8883, closed at 8745 but is set to open below 8000 today.

7832, the bottom made last week, is the important immediate support to eye. If that breaks, 7500-7340 would be next support zone, as 7500 is where a trendline adjoining bottoms made in October 2012 and August 2013 is placed while 7340 is the is the 50% retracement level of the entire 2252-12430 upmove seen after 2008.

8883, the top made on Friday, would now act as the immediate hurdle.