NIFTY BREAKS 7460 SUPPORT
US indices fell between 1.8%-2.2% on renewed declined in oil prices. The Nasdaq composite led the decline as Apple, biotechs and several major tech stocks fell.
Nymex oil fell $1.74 or 5.5% to $29.88 a barrel, weighed by concerns about demand and rising supply, as hopes for a deal between OPEC and Russia on output cuts diminished. Brent slid $1.79 or 5.2% to $32.43.
Auto sales for January came in at a 17.58 million annual rate, the strongest January since 2000.
European markets tumbled 1.8%-3% as low oil prices and earnings reports from BP and UBS weighed. Rating agency S & P cut its rating on Shell and BHP Billiton due to the poor outlook for commodities. BP plunged 8.7% after reprting an annual loss of $6.5 billion in 2015, its worst in 20 years. UBS reported earnings that topped forecasts, but warned that volatile markets, low interest rates and a strong Swiss franc would continue to present headwinds.
Sensex and Nifty ended with deep cuts of 1.2% and 1.3% respectively after an extremely choppy session. Sensex settled at 24539, down 286 points while Nifty lost 100 points to finish at 7456. BSE mid-cap and small-cap indices fell 1.7% and 1.2% respectively. Except a 0.4% rise in BSE Telecom index, all the sectoral indices ended in red with Metal and Energy indices leading the tally, down 4.3% and 2.7% respectively.
FIIs net sold stocks, index futures and stock futures worth Rs 113 cr, 51 cr and 393 cr respectively. DIIs were net sellers to the tune of Rs 323 cr.
Rupee depreciated 13 paise to end at 67.975/$.
At its first bi-monthly monetary policy meeting of 2016, the RBI left key rates unchanged as expected, saying it would want to wait for more inflation data and the Union Budget before taking action, even as it said it would continue to remain "accommodative".
The RBI added that it was on course to meet its January 2016 target of keeping consumer inflation below 6% though it upped its January 2017 target from 4.8% earlier to 5% (subject to upward risks arising out of Pay Commission rollout). For fiscal year 2016, the RBI said it expects growth to come in at 7.4% with downside risks. For the next fiscal, it said growth is expected to increase to 7.6%.
Today morning, Nikkei and Hang Seng are trading with deep cuts of more than 3%, other Asian markets are trading with cuts in the vicinity of a percent and SGX Nifty is suggesting about 75 points lower opening for our market.
After Nifty nearly achieved 7605-7620 target, we had advised booking some profit in trading longs and trailing the stop loss in remaining ones to 7460, which was the immediate support on the hourly chart.
The benchmark, after a flattish start, plunged sharply to 7428 before closing at 7455, breaking the 7460 support.
Next downside target to eye is 7380, which is the 61.8% retracement level of the recent 7240-7600 upmove. A sustained trading below 7380 would open up the possibility of retest of 7240 bottom.
Immediate hurdle on the hourly chart is placed at 7500, with the stop loss of which trading shorts can be held on to.