Key Highlights reasons for Surged Nasdaq
- Nasdaq closed new highs- a story of V-Shape recovery from its low recorded on 23 March 2020
- Federal Reserve expecting a contraction 6.5% in 2020 and 5% expansion in 2021. Keeps interest rate near 0% to support economical activities.
- A sudden spike in corona virus cases in Texas can result in second wave of infection.
- Mix closing of US markets on the back of weak economical recovery.
- Most of the Asian markets are trading with negative biased.
- SGX Nifty in negative territory.
Why Federal Reserve Keeps interest rate near 0% ?
- Federal Reserve is expecting a contraction of 6.5% in the US economy in 2020 before recovering to 5% in 2021. Also keeps interest rate to near 0% to support the economical activities.
- The key risk to U.S. economy is too fast opening can result in second wave of infection. Texas has seen a sudden rise in hospitalization in corona virus cases in last three days. It is among the states that has opened the economy too fast.
- Nasdaq has seen remarkable recovery from its low on the back of re-opened economical activities in U.S. Investors have seen V-Shape recovery and start of new uptrend.
- Yesterday after U.S. Federal Reserve announcement about U.S. economy outlook, Dow Jones and S&P closed in red territory.
- Dow Jones Industrial Average decreased by 282.31 points, or -1.04%, close at 26,989.99.
- The S&P 500 fallen by 17.04 points, or -0.53%, ends at 3,109.14.
- Nasdaq Composite Index increased by 66.59 points, or 0.67%, close at 10,020.35.
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- SGX Nifty is suggesting that Indian Markets will start at around 10,100 level. Nifty is in range bound from last few days and trading in the zone of 9900-10300. Instead of Nifty we are suggesting to trade in stocks.
- Buy IBULHSGFIN: Target Rs 180 and Stop loss Rs 143.
- Buy UJJIVAN: Target Rs 235 and Stop loss Rs 190
- Buy SPARC: Target Rs 170 and Stop loss Rs 145
- Buy TATAELXI: Target Rs 950 and Stop loss Rs 830
For long term portfolio, Read this article.