9158 CONTINUES TO BE IMMEDIATE HURDLE; 8700 BELOW 8806

9158 CONTINUES TO BE IMMEDIATE HURDLE; 8700 BELOW 8806

WORLD MARKETS

US indices slipped 0.5%-1.6%, snapping a three-day winning streak, after a report raised concerns about previously publicized trial results for Moderna’s potential coronavirus vaccine.

Treasury Secretary Steven Mnuchin, in his testimony to the Senate Banking Committee, said the Treasury and the Federal Reserve are “fully prepared to take losses” on the remaining capital from the coronavirus bailouts. Mnuchin said he is prepared to distribute the entire $500 billion appropriated to help struggling businesses impacted by the coronavirus pandemic. Fed chair Powell also reiterated the central bank’s commitment to programs aimed at keeping markets functioning and getting money to those who need it during the coronavirus crisis.

WTI crude gained 68 cents, or 2.1%, to settle at $32.50 per barrel while Brent shed 16 cents, or 0.5%, to settle at $34.65.

In Europe, FTSE and CAC fell 0.8% and 0.9% respectively while DAX rose 0.2%. EU car registrations fell 76.3% y-o-y in April. Germany’s closely-watched ZEW survey of economic sentiment for May showed a much greater-than-expected improvement.

AT HOME

After rising more than 2% in the initial trade, benchmark indices gave away nearly three fourth of the gains through the session to end higher by 0.6%.Neverthless, this was the first positive day after three consecutive red days. Sensex settled at 30196, up 167 points while Nifty added 55 points to finish at 8879. BSE mid-cap index rose 0.5% while small-cap index fell 0.2%. BSE Telecom index soared 10.4%, becoming top gainer among the sectoral indices, followed by 2.5% higher Teck index. Capital Good and Energy indices were the top losers, down 1.4% and 1.3% respectively.

FIIs net sold stocks worth Rs 1328 cr but net bought index futures and stock futures worth Rs 2331 cr and 1792 cr respectively. DIIs were net buyers to the tune of Rs 1660 cr.

Rupee appreciated 27 paise to end at 75.63/$.

UPL tumbled after government issued a draft order to prohibit use of certain insecticides, citing risk to humans and animals. Bharti Airtel surged after reporting strong ARPU growth and subscriber addition in 4G network.

Bajaj Finance reported mixed set of numbers and issued a weak outlook. NII rose 38.4% and asset quality remained stable. On the flip side, slippages were elevated at Rs 1037 cr as against Rs 936 q-o-q and cheque bouncing rate was high at 37%. The company expects ex-covid provisions to rise by 80-90% for FY21 and the focus going forward will be on preservation of cash rather than growth.

OUTLOOK

Today morning, Nikkei and Hang Seng are up 0.9% and 0.2% respectively while Shanghai is down 0.2%. SGX Nifty is suggesting about 30 points higher start for our market.

In yesterday's report we had said that 9158, the top made Monday, would now act as immediate hurdle with the stop-loss of which trading shorts can be held on to.

Nifty, after touching a high of 9030, slipped to end at 8879 and is set to open near 8900 today.

9158, the top made Monday, continues to be immediate hurdle, a crossover of which is required for a fresh upmove. 8806, the bottom made Monday, is the immediate support, upon breach of which, 8700, the 50% retracement level of the entire 7511-9889 upmove, would be the next support to eye.

Bajaj Auto, Dr Reddy and Ultratech will report their quarterly earnings today.