11661 IS THE NEXT SUPPORT; 11905 IMMEDIATE HURDLE

 

11661 IS THE NEXT SUPPORT; 11905 IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices slipped 1.6%-2.3%, suffering their worst fall since September, on worries over surging Coronavirus cases, compounded with little hope of a stimulus package from Washington.

 

Friday and Saturday saw cases spike above 83,000, in the US. Data on Sunday also showed the country has reported a record average of 68,767 cases per day over the past seven days.

 

Brent crude dropped $1.31, or 3.1%, to settle at $40.46 a barrel while WTI fell $1.29, or 3.2%, to settle at $38.56 a barrel.

 

European markets fell 1.2%-3.7% with the DAX leading the losses. France reported a record daily rise in new infections on Sunday. Italy ordered bars to close early and shutting public gyms and Spain issued a nationwide curfew to stem a worsening outbreak.  Meanwhile, Technology stocks plunged after Germany’s SAP abandoned its medium-term profitability targets and warned that its business would take longer than expected to recover from the damage of the coronavirus pandemic.  Germany’s Ifo business climate index for October slipped lower on Monday for the first time in six months, indicating that the recovery for Europe’s largest economy could be losing momentum.

 

AT HOME

 

Benchmark indices tumbled a percent and third, starting the week on a weak note. Sensex settled at 40145, down 540 points while Nifty lost 162 points to finish at 11767. BSE mid-cap and small-cap indices fell 1.8% and 0.9% respectively. Except 0.1% higher FMCG index all the BSE sectoral indices ended in red with Energy, Metal and Auto indices leading the losses, down 3.5%, 3.4% and 3.3% respectively.

 

FIIs net sold stocks and index futures worth Rs 119 cr and 600 cr respectively but net bought stock futures worth Rs 713 cr. DIIs were net sellers to the tune of Rs 979 cr.

 

Rupee depreciated 23 paise to end at 73.85/$.

 

Auto stocks, especially those of two-wheeler companies, fell sharply on concerns of festive season failing to boost vehicle demand.

 

Kotak Mahindra Bank reported better-than-expected earnings along with improvement in asset quality. NII rose 17% y-o-y to Rs 3913 cr while Net profit rose 26.7% to Rs 2184 cr. Gross NPA ratio improved to 2.55% from 2.7% q-o-q while net NPA ratio improved to 0.6% from 0.87%. Slippages improved to Rs 264 cr from Rs 796 cr and provisions fell to Rs 369 cr from Rs 962 cr.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are trading with modest cuts while Shanghai is flat. SGX Nifty is suggesting around 40 points higher start for our market.

 

In yesterday's report we had said that 12025 continued to be immediate hurdle while 11775, the low made last week, continued to be immediate support, below which 11661, the bottom made on 15th October, would be the important support to eye.

 

Nifty broke 11775 support and plunged all the way to 11711 before closing at 11767 and is set to open near 11800 today.

 

11661, the bottom made on 15th October, is the next important support to eye.

 

11905 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

Tata Motors and Bharti Airtel will report their quarterly earnings today.