The current rebound in the Sensex and Nifty are not reflecting what some believe is a stronger economy. Or in other words we shouldn't fall into the trap of associating economic activity with stock prices. This market is getting difficult to predict than in past recessions. Avoid being dogmatic in your outlook and trade with caution.
The peculiarity of this market is that as the economic data gets worse, traders get more aggressive in buying stocks. This is probably due to ample liquidity in the system. However, in case of India, in the Rs.20 lakh crore package announced by Narendra Modi, the stimulus part is only 1% of the GDP in contrast to a worldwide average of 4%.
We are hearing lots of commentary about how serious the COVID-19 economic slowdown will be. The IMF recently released a report predicting a -6% contraction in global GDP. This makes Covid - 19 triggered economic crisis as the worst recession since the Great Depression, and worse than the Financial Crisis of 2008. However, the Indian Stock Markets give a different picture.
The market experts are predicting several types of recoveries: V, U, L, J, W, et al. However, what I feel is that containment of the virus holds the first clue on the length of this recession and more importantly the shape of graph.
Anyway, when I'm writing this report the BSE Sensex, was up 200.68 points or 0.6% to 33,708.60. The Nifty 50 index added 74.40 points or 0.75% to 9,955.55.
The Key support level for the Nifty is placed at 9,810, ollowed by 9,730. On the upside the Nifty will face resistances at 9,980 and 10,100.
The market is up today, after World Health Organization (WHO) said signs of hope have begun to show in the fight against the COVID-19 pandemic, but it added that countries must continue to work on prevention measures to limit the spread of the new coronavirus.
#Today Everest
Kanto Cylinders Ltd (Rs.19.60) hit another buyer freeze, especially after the news came out that Indraprastha Gas' consolidated net profit has jumped 27.5% to Rs.290.76 crore.
#Since the scrip of BHEL almost hit the target of Rs.27, we will remove that and replace it with a bit on
Himadri Special Chemicals Ltd at the CMP of Rs.46.50, for short term targets of Rs.67/71. SL: Rs.36.
Earlier this month, Himadri Speciality Chemical said it had resumed its offices and all its operations to ensure business continuity in the continuously evolving situation out of the Novel Coronavirus (COVID-19) outbreak.
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