DOVISH YELLEN LIFTS WORLD EQUITIES; 7670 IS THE IMMEDIATE HURDLE FOR NIFTY

DOVISH YELLEN LIFTS WORLD EQUITIES; 7670 IS THE IMMEDIATE HURDLE FOR NIFTY

WORLD MARKETS                             

US indices gained 0.6%-1.7% yesterday with tech stocks leading the gains after remarks from Federal Reserve chair Janet Yellen appeared dovish enough to assuage concerns about a near-term interest rate hike. Both S & P 500 and Dow closed at their highest levels of the year so far.

Yellen, in her prepared remarks at the Economic Club of New York said that economic readings are mixed and it is appropriate to proceed cautiously in adjusting policy.

Following the comments, Dollar index fell more than 0.8% for its worst day since March 17. Gold gained $16 to $1236 an ounce, for its first positive day in four.

Nymex oil fell $1.11 to $38.28 a barrel and Brent fell $1.13 to $39.14 after the decision by Kuwait and Saudi Arabia to resume oil production at the jointly operated 300,000-barrel-per-day Khafji field.

In economic news, the S&P/Case-Shiller 20-City Composite Index for January showed a 5.7% rise from the previous year.

European markets gained upto 0.8% with DAX leading the gains.

AT HOME

Benchmark indices ended lower by a fourth of a percent after a choppy trade, extending the losing streak to second straight day. Sensex settled at 24900, down 66 points while Nifty lost 18 points to finish at 7597. BSE mid-cap and small-cap indices lost 0.2% and 0.3% respectively. BSE Healthcare index tumbled 2.6%, becoming top loser among the sectoral indices, followed by 1% cut in Capital Goods index.

FIIs net bought stocks and index futures worth Rs 513 cr and 208 cr respectively but net sold stock futures worth Rs 756 cr. DIIs were net sellers to the tune of Rs 557 cr.

Rupee appreciated 3 paise to end at 66.54/$.

Lupin plunged 6% after reports that the company's Mandideep unit in Madhya Pradesh has received observations from the US Foods and Drug Administration.

OUTLOOK

Today morning, Nikkei is trading with modest cuts while Shanghai Composite and Hang Seng are up about a percent and half. SGX Nifty is suggesting about 50 points higher opening for our market.

Nifty, after breaking 7600 support in intraday trade on Monday, closed below this level yesterday. While the benchmark is in "Buy" mode on the daily chart, hourly chart is in "Sell" mode. Short term traders should hold short positions with the stop loss of 7670, which is the immediate hurdle on the hourly chart.

7400, the 38.2% retracement of the 6825-7750 upmove, continues to be the major downside target.