NIFTY REBOUNDS AFTER HOLDING 7380 SUPPORT
US indices gained 0.2%-0.6%, helped by a rise in oil prices.
Energy sector led the gainers as Nymex oil jumped $1.8 or 5% to $38.29 a barrel, its highest settle since Dec. 4. Weekly crude inventories showed a rise of 3.9 mn barrels but a drop of 4.5 mn barrels in gasoline inventories. Statement by an Iraqi oil official that OPEC and non-OPEC members would meet in Moscow on March 20 to discuss an output freeze, also boosted the sentiment. Brent climbed 4% to $41.07 a barrel.
In economic news, US weekly mortgage application volume increased 0.2%. Wholesale inventories rose 0.3% in January, while sales declined 1.3%.
European markets ended higher by 0.2%-1.1%
After falling about three fourth of a percent in the initial trade, benchmark indices climbed nearly a percent and half from the bottom of the day to end higher by six tenth of a percent, with Nifty closing at the highest level since 1st February 2016. Sensex settled at 24794, up 135 points while Nifty added 46 points to finish at 7532. BSE mid-cap and small-cap indices gained 0.9% and 0.04% respectively. BSE Capital Goods and Realty indices climbed 1.6% and 1.5% respectively, becoming top gainers among the sectoral indices while Metal and Consumer Durable indices lost 0.8% each.
FIIs net bought stocks and index futures worth Rs 463 cr and 155 cr respectively but net sold stock futures worth Rs 1253 cr. DIIs were net sellers to the tune of Rs 824 cr.
Rupee appreciated 14 paise to end at 67.21/$.
China's February CPI has come in at 1.6% MoM Vs expectation of 1.9%.
Barring a 0.7% cut in Shanghai, other Asian markets are trading with gains of upto a percent with Nikkei leading the gains and SGX Nifty is suggesting about 20 points higher opening for our market.
In yesterday's report we had reiterated our view that 7540, the erstwhile support, would now act as the hurdle, a crossover of which is required for fresh upmove. We had also said that 7380, the lower level of the gap created by the gap up opening on Thursday, is the immediate support.
The benchmark, after touching a low of 7424 in the initial trade, rebounded smartly to end at 7532.
A higher opening today would take Nifty above 7540 hurdle. Upon sustained trading above 7540, 7600, which is the immediate previous top on the weekly chart would be the next target to eye. Upon a decisive crossover of 7600, next major target to eye would be 7840, where the 34-week moving average is placed.
Immediate support on the hourly chart has moved up to 7450, which should serve as the stop loss for trading longs.
Key event to watch out today would be ECB policy meeting. ECB President Mario Draghi, is expected to announce more stimulative measures, with hopes of expansion of the asset purchase program and a possible further cut to the already negative deposit rate.