Nirmala Sitharaman’s Stimulus Failed To Lure Stock Market

FM Nirmala Sitharaman’s stimulus failed to impress stock market , package had more to do with fixing supply-side issues than catering to demand-side issues. The FM announced Rs 3 lakh crore collateral-free loans and 50000 crore equity infusion in MSMEs; Rs 90,000 crore liquidity infusion in discoms and 50000 crore relief on TDS and TCS among others. Market participant do not expect the Rs 6 lakh crore announcements to give any boost to the economy in the short term. market was a bit disappointed because the immediate spend out of the big fiscal stimulus is relatively small and there could be doubts on whether economic growth will revive soon and in proportion to the large number of the stimulus. Indian markets opened on a negative note following overnight negative close in US markets as US Fed warned that the coronavirus crisis raises longer-term growth concerns and could result in an extended period of low productivity growth and stagnant incomes. During the afternoon session the markets further weakened as truncated WPI data further added to pessimism which showed deflation in primary articles to 0.79% in April-20 as against inflation of 3.72% in March-20; food inflation cooled to 3.60% in April-20 from 5.49% in March-20. T he benchmark indices wiped out all the previous session gains with Nifty ended below 9150 level on May 14 on the back of profit booking amid weak global cues. At close, the Sensex was down 885 points at 31122, and the Nifty was down 240 points at 9142.

Nifty climbed 240 points on Wednesday and closed near 9140 level. The nifty formed a 'Bearish Belt Hold' as the nifty could not hold on to its opening gains and closed near the day's low. we  are not convinced about Thursday’s gains. The prevailing trend remains negative. "In the tomorrow’s trading sessions, if the index fails to get past Wednesday's high of 9,585, it will initially slide towards the recent low of 9,043. A move beyond this level can extend the upswing to 9700 level, where there seems to be confluence of resistance points.

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Resistance: 9500, 9700

Support: 9000, 8800