Is it Just a Deceleration or a Reversal

Is it worse than SARS or not won’t matter for now as it’s still contagious & spreading, that is a concern for the market, and how markets behave could change in the process to fight the virus?

The coronavirus, a highly contagious, pneumonia-causing illness that infects the respiratory tract, was responsible for 213 deaths in China as of late Thursday and 9,692 infections worldwide, according to figures from China’s National Health Commission.

SARS had a fatality rate of 9.6% compared to the fatality rate of 2.2% for the coronavirus. Still makes coronavirus a contagious,It has an incubation period of up to two weeks, which enables the virus to spread through person-to-person contact.

WHO says Novel Corona-Virus outbreak a global health emergency. It has so far spread to 22 countries, posing a possible threat of restricting global trade and travels. A major global concern currently. S&P 500 VIX surges to 18.6, 40% up in a week.

Multiple negative divergence has formed & fear of Corona-Virus outbreaks playing major roles for the correction.

In the midst of earnings season, the market is affected by the epidemic Corona-virus outbreak which keeps sparking fear that led crude oil price fell this week and gold price above 1580 also global meltdown.

Apart from the fear, in this budget, key factor will be rural reforms for farmers, as govt targeted to double the farmer income by 2022.
Expects to increase the budget for MNREGA scheme.
Expects some tax relief from LTCG.
Expects some infra spending, as centre to provide funding of up to Rs1 trillion.
Expects some tax exemption on housing loan.

FM is forced to ask more dividends to help finance the budget. Sourced.

CEA sees recovery to 6% to 6.5% which contradicts other rating agencies & organizations.
Govt may bring reforms for increasing the tax revenue as it’s already expected that due to slashing corporate taxes, govt will miss the target of Rs 16.5 trillion tax revenue target.

Tax cut in LTCG will be positive for the market, if govt cuts the taxes in DDT then it’ll be positive for MNCs, IT sector, Auto, metal, oil & gas.

Any positive moves in the rural and farming sector will be positive for consumption & Agri related stocks like Escorts, Hero, TVS, Bajaj-Auto, HUL, Colgate, Dabur, Emami, and other peering companies.

Any move to increase the infra spending will be positive for the infrastructure-related companies, logistics, even for the cement sector and for the market.

NIFTY

In this Chart, Negative divergence has formed, retracing toward 11850 to 11800 level.
If budget fails to satisfy the investor & traders, then correction toward .50% retracement confirms with resistance near 12256.

NIFTYBANK

In this chart, Negative divergence has formed, retracing towards .50% level near 30k.
In rest of the charts we can see negative divergence and short term break out for correction.
In gold chart, trend is continuing towards the level of 1600, for short term possible target of 1620.

DAX

DOWJONES

GOLD FUTURES

NIKKEI 225

S&P VIX 500