TRAIL STOP-LOSS TO 8900

TRAIL STOP-LOSS TO 8900

WORLD MARKETS

US indices gained 1.4%-3% on Friday after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus and countries around the world including the U.S. and Germany are beginning to implement plans to lift lockdown measures as the rate of new cases declines.

WTI crude for June expiry fell 50 cents, or 2%, to $25.03 a barrel while Brent June contract rose 26 cents, or 0.9%, to $28.08. U.S. crude contract for May expiry tumbled $1.60, or 8.1%, to $18.27 per barrel, its lowest since January 2002, reflecting fears over a global glut and tight storage space.

European market climbed 1.7%-3.4%. Euro zone inflation slowed sharply in March to 0.7% year-on-year, down from 1.2% in February.

For the week, Nasdaq climbed 6.1% while S & P 500 and Dow rose 3% and 2.2% respectively, all extending the winning streak to second straight week and closing at the highest level since early March. In Europe, FTSE and CAC fell 1% and 0.2% respectively while DAX rose 0.6%. In Asia, Nikkei soared 13% while other markets ended with modest gains ranging from 0.3%-1.7%. WTI crude plunged 22%, hitting an 18-year low.

AT HOME

The week ended on a positive note as Sensex and Nifty soared 3.2% and 3% respectively, extending the winning streak to second straight day and closing at the highest level since 13 March 2020. Sensex added 986 points to settle at 31588 while Nifty finished at 9266, up 273 points. BSE mid-cap and small-cap indices gained 2.1% and 2.4% respectively, extending rising streak to third straight day. Except 1% and 0.7% lower FMCG and Healthcare indices respectively, all the BSE sectoral indices ended higher with Bankex and Finance indices being the top gainers, up 6.8% and 5.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1392 cr, 7 cr and 729 cr respectively. DIIs were net buyers to the tune of Rs 534 cr.

Rupee appreciated 47 paise to end at 76.39/$.

For the week, Sensex and Nifty rose 1.4% and 1.7% respectively, extending winning streak to second straight week.

RBI announced new measures to boost liquidity, expand bank credit flow and ease financial stress. Targeted long-term repo operations (TLTRO) 2.0 worth ₹50,000 crore would be conducted to benefit NBFCs and micro-financial institutions. The apex bank cut reverse repo rate to 25 basis points to 3.75% so that banks are nudged to lend more, instead of deploying funds with the central bank. Other measures include providing Rs 50,000 crore refinance to Nabard, SIDBI and NHB and increasing the ways and means advances (WMAs) limit to 60% to allow States the flexibility to borrow. RBI also said the moratorium period will be excluded from the classification of non-performing assets (NPAs).

HDFC Bank reported 17.7% rise in Q4 net profit at Rs 6927 cr. NII rose 16.2% to Rs 15204 cr. Asset quality improved on sequential basis. Gross NPA ratio improved to 1.26% from 1.42% while net NPA ratio improved to 0.36% from 0.48%. Provisions for non-performing assets rose 24% q-o-q to Rs 3748 cr. Slippages came in at 10-quarter low.

OUTLOOK

Today morning, Hang Seng and Shanghai are little changed while Nikkei is off 1%. SGX Nifty is suggesting about 50 points lower start for our market.

At the risk of repeating, we had advised going long on Nifty after 8678 hurdle was taken out on 7th April and have been advising holding on to long positions with a trailing stop-loss.

On Friday, we had reiterated the target of 9390 and had advised trailing the stop-loss to 8800.

Nifty, on Friday, touched a high of 9324 before closing at 9266 and is set to open near 9200 today.

9390, the the 38.2% retracement level of the entire 12430-7511 fall, continues to be  next target/ resistance to eye. Above 9390, 34-DMA, placed around 9500, would be the next important target/resistance. On the way down, 8900, where a trendline adjoining recent bottoms on the hourly chart is placed, is the immediate support, with the stop-loss of which, existing longs can be held on to.

Infosys will report its quarterly earnings today.