9533-9731 IS THE RESISTANCE ZONE; 9104 BELOW 9267

9533-9731 IS THE RESISTANCE ZONE; 9104 BELOW 9267

WORLD MARKETS

After opening in the red on the back of growing US-China tensions, US indices, led by technology stocks, saw a sustained upward move through the session to end in green. Nasdaq gained 1.2% while S & P 500 and Dow inched up 0.4% and 0.1% respectively.

Tensions between US and China continued to be in focus. Secretary of State Mike Pompeo on Sunday said there was “a significant amount of evidence” of the coronavirus originating in a Wuhan lab.

Meanwhile, New York Gov. Andrew Cuomo said that the daily number of hospitalizations and new deaths are declining.

Airline stocks tumbled after Warren Buffett’s said over the weekend that his Berkshire Hathaway dumped the entirety of its stakes in the sector due to the fallout from the pandemic.

Brent crude rose 28 cents, or 1.1%, to $26.72 a barrel, while WTI jumped 61 cents, or 3.1%, to settle at $20.39 per barrel.

In Europe, CAC and DAX tumbled 4.2% and 3.6% respectively while FTSE fell 0.2%. Eurzone IHS Markit manufacturing PMI fell to a record low of 33.4 in April from 44.5 in March.

AT HOME

Benchmark indices nosedived nearly 6%, breaking 4-day winning streak and giving away 80% of last week's gains. This is the biggest percentage fall for both the indices since 23rd March 2020. Sensex settled at 31715, down 2002 points while Nifty lost 566 points to finish at 9293. BSE mid-cap and small-cap indices fell 4.2% and 3.1% respectively.  Except 2.4% and 0.2% higher Telecom and Healthcare indices respectively, all the BSE sectoral indices ended in red with Finance index leading the losses, down 8.3%, followed by 8.2% lower Bankex and Metal indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1374 cr, 1606 cr and 1386 cr respectively. DIIs were net sellers to the tune of Rs 1662 cr.

Rupee depreciated 60 paise to end at 75.71/$.

India's April manufacturing PMI slumped to 27.4 in April from 51.8 in March. This is the first contraction in three years and lowest reading since the data collection began over 15 years ago.

OUTLOOK

Markets in China, Japan and South Kora are closed today for holidays. Hang Seng is up nearly a percent while SGX Nifty is suggesting around 100 points higher start for our market.

In yesterday's report we had said that 9390, the erstwhile resistance, would now be the immediate support, upon breach of which, 9104, the 33% retracement level of the entire 7511-9889 upmove, would be the next support.

Nifty broke 9390 support and plunged all the way to 9267 before closing at 9305. The benchmark is set to open near 9400 today.

9533-9731, the gap created by yesterday's gap-down opening, would now act as immediate resistance zone, above which, 9889, the top made last week, would be the bigger hurdle to eye.

9267, the bottom made yesterday, is the immediate support, upon breach of which, 9104, the 33% retracement level of the entire 7511-9889 upmove, would  be the next support to eye. IF 9104 also gives way, 8909, the bottom made on 21st April, would be the next important support.