9178-8968 IS THE IMMEDIATE RANGE

9178-8968 IS THE IMMEDIATE RANGE

WORLD MARKETS

U.S. markets were closed yesterday in observance of Memorial Day. On Friday, Dow ended flat while S & P 500 and Nasdaq rose 0.2% and 0.4%.

American biotech firm Novavax yesterday said it started the first human study of its experimental coronavirus vaccine.

Japan’s Prime Minister Shinzo Abe announced that the state of emergency will be lifted in the last five of the country’s 47 prefactures.

Brent crude eased 19 cents, or 0.5%, to $34.94 a barrel while U.S. oil fell 6 cents to $33.19.

In Europe, FTSE was closed while DAX and CAC climbed 2.9% and 2.2% respectively as countries gradually continue to reopen their economies and lift coronavirus lockdown restrictions.

On Sunday, White House National Security Advisor Robert O’Brien said that the U.S. will likely impose sanctions on China if Beijing implements national security law that would give it greater control over autonomous Hong Kong.

For the week, Dow gained 3.3% to post its best weekly performance since April 9. The S&P 500 and Nasdaq also rose more than 3%.

AT HOME

After rising about half a percent in first hour, Sensex and Nifty slipped sharply post RBI announcement to end with cuts of 0.8% and 0.6% respectively, breaking 3-day winning streak. Sensex settled at 30672, down 260 points while Nifty lost 56 points to finish at 9050. BSE mid-cap and small-cap indices fell 0.8% and 0.2% respectively. BSE Finance index and Bankex tumbled 3% and 2.4% respectively, becoming top losers among the sectoral indices while IT and Teck indices were the top gainers, up 1.7% and 1.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1354 cr, 671 cr and 345 cr respectively. DIIs were net sellers to the tune of Rs 344 cr.

Rupee depreciated 34 paise to end at 75.95/$.

RBI cut repo and reverse repo rate by 40 bps each to 4% and 3.35% respectively. It now expects FY21 GDP growth to slip in negative territory. The apex bank also announced extension of moratorium on loan EMIs by 3 months and said that deferment of working capital during 6 months will be converted into term loan, which can be repaid by March 2021.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.7%-2% and SGX Nifty is trading around 9157, suggesting around 130 points higher start when compared to Friday's close of Nifty futures.

In Friday's report we had said that 9178, the top made Thursday, was the immediate hurdle, a crossover of which would confirm a "Buy" on the hourly chart and would pave the way for further upmove. We had also said tht 8950, where a trendline adjoining recent bottoms on hourly chart was placed, was an immediate support.

Nifty, after touching a high of 9150, plunged to 8968 before closing at 9039 and is set to open near 9150 today. 9178, the top made last week, continues to be immediate resistance, a crossover of which is required for a fresh upmove. If that happens, 9281-9351, the gap created by gap-down opening on 14th May, would be the next target/resistance zone to eye.

8968, the bottom made on Friday, is the immediate support.