8950 BELOW 9044; 9281-9351 IS THE RESISTANCE ZONE

8950 BELOW 9044; 9281-9351 IS THE RESISTANCE ZONE

WORLD MARKETS

After plunging nerly 2% at the open, US indices saw a sustained northward move through the session to end with gains of 0.9%-1.6% as a rally in bank shares offset the dismal round of U.S. unemployment data. A surge in oil prices also boosted the sentiment.

Weekly jobless claims for the week ending May 9 totaled 2.98 million, bringing the total number to more than 36 million since the coronavirus crisis began.

WTI crude surged 9%, or $2.3, to settle at $27.56 per barrel, while Brent crude rose $1.9, or 6.6%, to $31.13 per barrel after U.S. crude inventory fell 745,000 barrels to 531.5 million barrels in the week to May 8 and International Energy Agency forecasted crude stockpiles to shrink by about 5.5 million barrels per day in the second half of 2020.

European markets fell 1.3%-2.8%.

AT HOME

After a gap-down opening, benchmark indices slipped further through the session to end with deep cuts of more than 2.5% to close at 3-week low. Both the indices closed at the lowest level since 21st April, marking a 3-week low. Sensex settled at 31122, down 886 points while Nifty lost 240 points to finish at 9142. BSE mid-cap and small-cap indices however outperformed, falling just 0.4% and 0.6% respectively. BSE IT and Energy indices tumbled 3.6% and 3.4% respectively, becoming top losers among the sectoral indices while Healthcare and FMCG indices were the top gainers, up 0.5% each.

FIIs net sold stocks, index futures and stock futures worth Rs 2153 cr, 1328 cr and 692 cr respectively. DIIs were net buyers to the tune of Rs 802 cr.

Rupee depreciated 9 paise to end at 75.56/$.

Finance Minister Nirmala Sitharaman yesterday released the second tranche of the ₹20 lakh crore economic package with a focus on migrant workers, street vendors and small farmers.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had said that 9240, the lower end of the gap created by Wednesday's gap-up opening, would serve as immediate support and that below 9240, 9043, the low made on Tuesday, would be the next support to eye.

Nifty broke 9240 support and plunged all the way to 9120 before closing at 9142 and is set to open flat today.

9044, the low made on Tuesday, continues to be the next support to eye. Below 9044, 34-DMA, placed around 8950, would be the next important support.

9281-9351, the gap created by yesterday's gap-down opening, would now act as immediate resistance zone. Above 9351, 9584, the top made on Wednesday, would be major hurdle to eye.