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Last Updated : Mar 13, 2020 09:04 AM IST | Source: Moneycontrol.com

Market Headstart: No sign of reversal! Nifty could test 9,000 levels

Trends on SGX Nifty indicate a negative opening for the index in India with a 705 points loss. The Nifty futures were trading flat at 8,774 on the Singaporean Exchange around 08:00 hours IST.


The Nifty50 could retest 9,000 on March 13 tracking muted trend seen in other Asian markets. The index fell nearly 900 points on March 12 to close at 9,590.

In the US market, trade was halted on the S&P 500 after it hit downdraft circuit breakers. It fell further when trade resumed, eventually losing 9.5% to close 27% below February’s peak, said a Reuters report.

Asia’s stock markets crashed on March 13 as panic gripping world financial markets deepened, and even haven assets such as gold and bonds were ditched to cover losses in the wipeout, said a Reuters report.

Close

Trends on SGX Nifty indicate a negative opening for the index in India with a 705 points loss. The Nifty futures were trading flat at 8,774 on the Singaporean Exchange around 08:00 hours IST.

The S&P BSE Sensex plunged more than 3,000 points to hit a 2-year low, while Nifty50 broke below 9,600 to hit a 32-month low.

Investors lost more than Rs 11 lakh cr in terms of market capitalisation on the BSE. The average market capitalisation of BSE-listed companies fell from Rs 137.13 lakh cr recorded on March 11 to Rs 125.87 lakh cr as on March 12.

Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 2919 points to close at 32,778 while the Nifty50 plunged 868 points to close at 9590.

India VIX also hit a 12-year high. It rose 34 percent to close at 42.32. Higher volatility could keep market under pressure and a roller coaster ride could continue to keep traders in tension till It doesn’t cool off from its historical decade highs.

The rupee slid by 56 paise to a fresh 17-month low of 74.24 (provisional) against the US currency on Thursday due to strong dollar demand as investors pruned riskier bets amid coronavirus pandemic fanning recession fears.

On the provisional front, FPIs were net sellers in Indian markets for Rs 3475 cr while the DIIs were net buyers to the tune of Rs 3918 cr, provisional data showed.

Big News:

India's current account deficit narrowed sharply to $1.4 billion or 0.2 percent of GDP in the December quarter, the Reserve Bank said on March 12.

On the inflation front, India's retail inflation rate in February stood at 6.58 percent, according to data released on March 12. Retail inflation for the month of January was 7.59 percent.

The extent of the reduction in the headline CPI inflation in February 2020, combined with an unchanged core print, will provide some relief, and boost the possibility of an upfronted rate cut in the April 2020 policy review, suggest experts.

India's industrial output grew 2 percent in January against a contraction of 0.3 percent in December, according to the Index of Industrial Production (IIP) data released by the government on March 12.

“While the IIP data for January 2020 has provided a positive surprise, the likely duration, intensity and spread of the Coronavirus has injected a lot of uncertainty into the global and domestic economic outlook,” ICRA said in a report.

“The prospects of a meaningful domestic economic recovery in H1 FY2021 have dimmed, despite the improved outlook for the agricultural sector and rural demand,” it said.

Technical View:

Nifty50 registered a bearish candle

It opened the day with a huge gap down which created largest ever fall of 8% in the recent history of Nifty index

The level of 9500 on Nifty seems to be the major last technical support which one can bank on, based on long term trend studies

In case if Nifty slips below 9508 in the near term then next support is placed around 9182 levels

Three levels to track: 9182, 9508, 9800

Max Call OI: 12000, 10000

Max Put OI: 9500, 9000

Stocks in the news:

Yes Bank: SBI said Executive Committee Of Central Board approves purchase of 725 crore shares in Yes bank at Rs 10 per share.

Wipro: Company to co-develop solutions with SAP for retail and fashion industry.

Sun Pharma: Board to consider share buyback on March 17.

Technical Recommendations:

We spoke to IndiaNivesh Securities and here’s what they have to recommend:

Nestle India: Sell| LTP: Rs Rs15,690| Target: Rs 13,600 | Stop-loss: Rs16,600 | Downside: 15%

Tata Steel: Buy| LTP: Rs 291| Target: Rs330 | Stop-loss: Rs255 | Upside: 13%

Dr Reddy’s Laboratories Ltd: Buy | LTP: Rs 2882 | Target: Rs3100 | Stop-loss: Rs2650 | Upside: 8%

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Mar 13, 2020 08:51 am
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