Stand up bulls! Hoping for recovery today!

The outlook for the day is a flat to positive start as SGX Nifty trade with gains of 30 points at 12,221 levels. However, it would be interesting to see whether or not markets hold its initial gains or traders will use pullback rally to take profit off table and initiate short positions. Our view is that as long as Nifty does not sustain above 12,250 mark, all pullback rallies are likely to be sold. Key earnings that will be in focus are Asian Paints, Axis Bank and Larsen & Toubro.

Markets in Asia were mixed on Wednesday morning. China’s Shanghai Composite is currently trading at 1.20 per cent down from its previous close, amid intensifying concerns over the spread of the coronavirus that has killed 6 in China so far. Meanwhile, Hong Kong’s Hang Seng and Japan’s Nikkei 225 were trading up by half a per cent each.

Back home, bears continued to dominate on D-Street for the second consecutive trading session on Tuesday and ended the session, near the day’s low. Nifty slipped 0.45 per cent and BSE Sensex dropped 0.49 per cent to settle at 12,170 and 41,324 levels, respectively. In the broader markets, both Nifty mid-cap and small-cap were resilience and ended the day on a flat note. Amongst the sectors, barring Nifty Media and Nifty Pharma, all the indices ended in the red. Wherein, Nifty Realty, Nifty Auto and Nifty Metal were the top losers.

In overnight developments, US stocks closed in a negative terrain after the news broke that the first recorded case of Coronavirus has been documented in United States. Dow ended lower by 152 points, S&P 500 slipped 9 points and Nasdaq fell 18 points. Majority of European stocks too ended in red as the negative tone was set by IMF, lowering its forecast for global economic growth and news about the outbreak of a deadly virus in China.