Let’s explore the reason for fall in Dow Jones
- Yesterday covid-19 cases crossed 1 million mark with half million deaths around the world.
- Rising cases in US is matter of concern for the administrations there, with threat to further reopening of economies of various states.
- Governors of various states in US are hinting of putting some restrictions on re-opening the economy.
- Markets are not taking positive note out of all this and US markets tumbled on Friday.
- This can put brakes on reviving economical data coming from last few weeks.
- Stocks in Wall street ends in negative territory in which Dow lost 730.05 points, S&P closed negatively with 74.71 points and Nasdaq closed with lost 259.78 points.
- Asian markets are trading with negative biased this morning (7.00 a.m.).
- SGX Nifty is in negative note this morning (7.00 a.m.).
Why recent rally is under threat on re-surging Covid-19 cases around the world?
- A sudden spike in covid 19 cases can be seen all around the world with cases crossing one million mark and half million deaths. No nation has the potential now to lock down their economies again. As already the World economy is now weak and unemployment graph at peak. People are now dying with poverty and stand still economy need a push to be on track to economical recovery.
- US is in tough spot as cases are rising at a fast pace. This is threatening for further re-opening of their economy and also markets are getting hints from various Governors of US for further tightening of the economy. This will put brakes on good economical data coming from various parts of the world and US at large.
- This is the reason why US markets tumbled on Friday and reason for weak opening of Asian markets too.
- U.S. states like Texas, California, Florida and other states have seen sudden spike of corona virus cases. This can be seen by sudden spike in hospitalization rates.
- Dow Jones Industrial Average decreased by 730.05 points, or -2.84%, close at 25,015.55.
- The S&P 500 lost 74.71 points, or 2.42%, ends at 3,009.05.
- Nasdaq Composite Index fallen by 259.78 points, or 2.59%, close at 9,757.22.
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- India is seeing a sudden spike in corona virus cases with new 17000 to 18000 cases registered on an average. The worst hit states are Maharashtra, Delhi, Gujarat and Rajasthan. The worst part is the cases are expecting to increase further and Delhi can see cases at around half million by the end of July, prediction made by medical practitioners.
- SGX Nifty is suggesting a cut of 0.55% at present time (7.00 a.m.). Indian Markets will start at around 10,300 level. With this covid-19, the risk of downside has opened in near future in Indian Markets too.
- Today strategy should be “Buy on dip” at around 10200 level and in case of any strength gathers there then traders can go long with a target of 10300. Do not trade at opening and lets the market settle at around 10200 and then trade. Traders should not short the market as technical texture of the market is not weak.
Written By: Akhil Mahajan, M.D. Mutual Fund Advisory, 9906357069, ww.mutualfundadvisory.co.in
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