NIFTY ON TRACK TO ACHIEVE 7510-7540 TARGET; TRAIL STOP LOSS TO 7235
After falling more than half a percent in the initial trade, US indices saw a sustained upmove through rest of the session to end with gains of 0.2%-0.4%
Energy sector led the gains as Nymex oil, after hitting $35.17, its highest level since Jan 6, settled at $34.66, up 26 cents or 0.8%. The US oil inventory report showed a build in stockpiles but a continued decline in production, down 25000 to 9.077 million barrels a day. Media reports citing Venezuela's Oil Minister said more than 15 countries will attend an upcoming oil meeting to discuss an output freeze plan and possible further actions. Brent rose 12 cents to $36.93.
Fed's Beige Book said that economic activity increased in most regions. Consumer spending rose in most districts. The ADP employment report showed U.S. private employers added a more-than-expected 214,000 jobs in February. Treasury yields edged higher after the report.
European markets, except a 0.1% lower FTSE, gained 0.4%-1.8% as mining and bank shares rose.
Earlier Nikkei and Shanghai surged more than 4%, shaking off news Moody's lowered its China government bond rating outlook to "negative" from "stable".
Gold rose $11 to $1242 an ounce.
Bull march continued as benchmark indices, after soaring three and a half percent on Tuesday, added another 2% yesterday to close at the highest level since 8th February. Sensex settled at 24243, up 464 points while Nifty surged 147 points to finish at 7369. BSE mid-cap and small-cap indices gained 1.9% and 2.2% respectively. Except a 0.1% cut in BSE FMCG index, all the sectoral indices ended in green with Realty index and Bankex leading the tally, up 5% and 4.9% respectively.
Banking stocks soared after RBI's decision to relax capital rules for banks to help meet Basel-III norms that will provide additional capital to banking sector.
FIIs net bought stocks, index futures and stock futures worth Rs 1437 cr, 1189 cr and 966 cr respectively. DIIs were net sellers to the tune of Rs 593 cr.
Rupee rose 31 paise to end at 67.54/$.
China's February Caixin Services PMI has come in at 51.2, down from 52.4 registered in previous month.
Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 50 points higher opening for our market.
Readers would recall that in Tuesday's report we had advised going long above 7090 for target of 7252 which was the top made on 22nd February. In yesterday's report we had mentioned that once Nifty takes out 7252-7280 resistance area, where 7280 was the 34-DMA, the next meaningful target would be 7510-7540 region where 7512 is the top made on 8th February and 7540 is where Nifty had made double bottom in September and December 2015.
The benchmark soared 147 yesterday to end at 7369 and is set to open with a gap up even today and is on course to achieve 7512-7540 target.
7235, the lower end of the gap created by yesterday's gap up opening, would now serve as the immediate support on the way down, with the stop loss of which trading longs should be held on to.