Market Ahead, February 20: Top factors that could guide markets today

An uptick in stock markets globally supported by a fall in coornavirus cases and expectations of more Chinese stimulus is likely to keep the Dalal Street's mood upbeat today. China reported a dramatic drop in new cases in the province at the heart of the coronavirus outbreak, while scientists reported the new virus may spread even more easily than previously believed. China’s central Hubei province had 349 new confirmed cases on Wednesday, the lowest since January 25.

Besides, telecom stocks will continue to remain in focus. According to a Business Standard report, the chairmen of Bharti Airtel and Vodafone Idea  met Finance Minister Nirmala Sitharaman yesterday and proposed creating a telecom fund to give soft loans to the service providers and extending the AGR payment timeline. 

Foreign fund flow, the Rupee's trajectory, and the oil price movement will also influence investor sentiment.

US and European equity indexes scaled fresh peaks on Wednesday after China reported another decline in new coronavirus cases. The Dow Jones Industrial Average rose 0.4 per cent. The S&P 500 gained 0.5 per cent, and the Nasdaq Composite added 0.87 per cent. Asian stocks, too, edged up on Thursday. 

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.1 per cent. Japan’s Nikkei rallied 1.5 per cent while markets in Australia and New Zealand minted record highs. The SGX Nifty, though, suggested a flat to negative start for the Sensex and Nifty today. 

In commodities, crude prices rose more than 2 per cent as demand worries eased. Brent advanced $1.37 to settle at $59.12 a barrel. 

Back home, indices snapped their four-day losing streak yesterday. The S&P BSE Sensex closed 429 points up at 41,323, while Nifty ended 133 points higher at 12,126.

According to analysts, the Nifty is witnessing firm support in sub -12,100 zone. The level of 12,100 will act as major support level for weekly expiry while 12,200 will act as resistance. However, if the Nifty breaches 12,200, we can witness short-covering move along with addition of fresh position. Therefore, traders should try to buy any dip keeping close eye on 12,100.

And, in the end, here's a stock idea by CapitalVia Global Research which recommends buying Indraprastha Gas Limited above Rs 481 for the target of Rs. 506 with stop-loss at Rs. 461.