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Below is the Views On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
“Equity markets fell sharply today on the back of global sell off triggered by spike in coronavirus cases outside China. Nifty closed down -2%, ending the session at 11,839. The overall market breadth was negative with both Nifty Midcap 100 and Nifty Smallcap 100 down 1.9%. All the sectors ended in red with Metals (-5.4%), Auto (-3.5%) and Pharma (-3.1%) being the biggest losers. The rupee fell to ~2-month lows of 71.9 against the US dollar, while gold hits 7-year high. The India VIX index jumped 25% to 17.2, reflecting the nervousness among investors.
With the outbreak spreading to other countries, investors are increasingly concerned that it could have a much longer term impact on the world economy. The IMF has warned that the coronavirus epidemic could put an already fragile global economy recovery at risk. Further in a weekend meeting in Saudi Arabia, of finance ministers and central bank chiefs of the G20 major industrial economies, officials warned that the outbreak is threatening to derail world growth. All this led to major global selloff. Even US President Donald Trump's maiden India visit failed to cheer the market. Investors also turned cautious ahead of the expiry this Thursday.
Markets would remain volatile this week given expiry and spread of coronavirus outside China. Investors would await announcement of any trade deal between US-India during Trump’s visit to India which could cheer the market.
Technically, Nifty formed a Bearish Marubozu kind of candle on daily chart. Index breached its major support of 11900 and closed below 100 DEMA. Going forward, ongoing correction may continue towards its next support of 200 EMA, which is placed around 11700 levels; while resistance is shifting lower to 12000 - 12050 zone.”
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