7450-7350 CONTINUES TO BE CRUCIAL SUPPORT AREA; 7620 CONTINUES TO BE IMMEDIATE HURDLE

7450-7350 CONTINUES TO BE CRUCIAL SUPPORT AREA; 7620 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices soared 1.4%-2% yesterday, helped by some recovery in oil prices and comments from Fed policymakers that indicated possibility of an even more gradual pace of tightening.

Energy closed up nearly 4.5% to lead all sectors of S & P 500 higher as Nymex oil rose 72 cents or 2.36% to $31.20 a barrel. Brent settled up 2.38% at $31.03.

JPMorgan Chase rose 1.5% after the banking giant reported net income of $5.4 billion, earnings per share of $1.32, on revenue of $23.7 billion, beating estimates.

St. Louis Federal Reserve President James Bullard said that a continued decline in inflation expectations may change his outlook for further Fed rate hikes.

In economic news, weekly jobless claims rose to 284,000. December import prices fell 1.2%, for a sixth-straight month of declines as the cost of petroleum and a range of other goods fell further, suggesting a tame inflation environment could persist in the near term

Dollar index gained about 0.2%. Gold fell $13.50 to $1074 an ounce.

European markets fell 0.7%-1.8%. Renault tumbled as much as 19% before closing 10.3% down, after confirming its offices were searched last week regarding a fraud investigation.

Minutes from the European Central Bank (ECB) showed some policymakers wanted a bigger interest rate cut on its deposit facility in December.

AT HOME

After plunging a percent and half in the opening trade, benchmark indices recouped most of the losses through the session to end lower by a third of a percent. Sensex settled at 24773, down 81 points while Nifty lost 26 points to finish at 7537. BSE mid-cap and small-cap indices however ended with deep cuts of 1% and 1.3% respectively. BSE IT and Teck indices soared 1.9% and 1.5% respectively, becoming top gainers among the sectoral indices while Capital Goods index and Bankex were the top losers, down 1.8% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 1222 cr and 105 cr respectively but net bought stock futures worth Rs 376 cr. DIIs were net buyers to the tune of Rs 1526 cr.

Rupee tumbled 45 paise to end at 67.29/$, the lowest level since 2013.

Infosys beat expectations with sequential dollar revenue growth of 0.6% at USD 2407 mn for the October-December quarter. Consolidated profit rose 1.94% to Rs 3465 cr and revenue rose 1.7% to Rs 15902 cr. The company also revised dollar revenue growth guidance upwards to 8.9-9.3% from 6.4-8.4% earlier and revenue guidance to 12.8-13.2% in constant currency from 10-12% earlier.

OUTLOOK

Today morning, Shanghai and Hang Seng have opened with modest cuts while other Asian markets are trading with gains of upto half a percent. SGX Nifty is suggesting about 10 points higher opening for our market.

Yesterday was yet another day of volatile consolidation as Nifty, after plunging to 7444 in the initial trade, rebounded sharply to end at 7537.

As we have been mentioning, 7450-7350 continues to be crucial support zone where 7450 is the lower band of monthly bollinger and 7350 is the 34-month average.

On the upside, 7620 continues to be immediate hurdle, a sustained trading above which will generate a buy on the hourly chart and would pave the way for the further upside till about 7760, where the 34-day moving average is placed.

HUL and ZEEL will report their quarterly earnings today.