U.S. Market Drops 12%; Brent Crude Falls Below $30 a Barrel

Global stock markets: Nasdaq, -12%; Dow 30, -13%; S&P 500, -12%; KOSPI, -3%; Nikkei, -1.3%; Hang Seng, -0.8%.

Yesterday, Nifty opened lower as the coronavirus spread intensified during the weekend. It made an intraday low of 9,165 and closed in the bottom quartile of the day’s range. The volatility index continues to rise further and is at record levels since 2008. Brent crude fell below $30 a barrel, after last week’s plunge of 25%, which was the largest weekly fall since 2008. On the sectoral front, the pain was felt all over, with all indices losing 4–9%. FII’s net selling was Rs 3,800 crore, while DII’s net buying was Rs 2,600 crore. U.S. markets opened limit down on virus concerns. The Fed action was not well received by the market.

We continue to remain in a Downtrend and suggest a cautious approach until the general market conditions improve. Most of the stocks continue to take on technical damage with many moving deeper into their respective bases and breaking below logical levels of support. Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. We will continue to monitor quality ideas with rising relative strength lines and superior fundamentals that could be set up to buy when and if the market begins to stabilize.

Key News

-On a review of current financial market conditions and taking into consideration the requirement of U.S. dollars in the market, the RBI decided to undertake another six-month U.S. dollar sell/buy swap auction of $2B to provide liquidity to the foreign exchange market.

Grasim Industries was imposed Rs 302 crore by the CII for abusing its dominant position with respect to the supply of a certain staple fiber to spinners.

Oil & Natural Gas declared an interim dividend of Rs 5 per share.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 0%; Rally Attempt, 0%; Uptrend Under Pressure, 4%; Downtrend, 96%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 0%; Rally Attempt, 0%; Uptrend Under Pressure, 0%; Downtrend, 100%.
Source : MarketSmith India