NIFTY TUMBLES AFTER BEING RESISTED NEAR 7600, VINDICATES OUR VIEW
While Dow managed to end 0.1% higher, S & P 500 and Nasdaq, led lower by healthcare stocks, closed 0.2% and 0.4% lower yesterday ahead of the conclusion of the Federal Reserve meeting.
Nymex oil fell 2.3% to $36.34 a barrel, extending the decline to second straight day to settle at the lowest level since March 4. Brent ended down 79 cents at $38.74.
US retail sales fell a less-than-expected 0.1% in February, but January's figure was revised down to show a 0.4% decline versus the previously reported 0.2% increase. Producer prices fell 0.2% in February, but were unchanged over the last 12 months. That marked the first time since January 2015 that the year-on-year PPI did not decline. NAHB Housing Market Index held steady at 58 in March.
European markets fell 0.6%-1.7%. Basic resources was the worst performing sector as weak earnings and a fall in metal prices weighed on the sector.
Gold lost $14 to close at $1231 an ounce.
Earlier the Bank of Japan kept rates unchanged, as expected, but gave a gloomier view on the economy and exports in particular than it did in January.
After a flattish start, benchmark indices saw a sustained downward move through the session to end a percent lower. Sensex lost 253 points to settle at 24551 while Nifty finished at 7461, down 78 points. BSE mid-cap and small-cap indices lost 0.8% and 0.6% respectively. BSE Healthcare index plunged 3%, becoming top loser among the sectoral indices, followed by 1.5% cut in FMCG index. Bankex and Oil & Gas indices gained 0.4% and 0.3% respectively.
FIIs net sold stocks and stock futures worth Rs 54 cr and 684 cr respectively but net bought index futures worth Rs 554 cr. DIIs were net sellers to the tune of Rs 302 cr.
Rupee depreciated 27 paise to end at 67.38/$.
India's trade deficit fell from USD 7.64 bn in January to USD 6.54 bn in February. Exports fell 5.66% to USD 20.74 while imports fell 5.03% to USD 28.71 bn.
Today morning, barring a half a percent lower Nikkei, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 25 points higher opening for our market.
For past couple of days we have been cautioning that 7540-7600 is the important resistance area, a crossover of which is required for further upmove. We had also advised booking profits in trading longs as this resistance area approaches.
The benchmark, after touching a high of 7584 on Monday, slipped sharply in yesterday's trade to end at 7460, vindicating our view.
In yesterday's report we had also mentioned that 7460 is the immediate support on the hourly chart, a a sustained trading below which will generate a sell on the hourly chart and can take the benchmark to around 7300, where 34-DMA is placed.
That continues to be the view. 7460-7425 is the region where multiple bottoms on the hourly chart are placed. Once this support area is taken out, traders can initiate short positions with the stop loss of 7500, which is the immediate hurdle on the hourly chart.
Crossover of 7600 should be awaited for taking fresh longs.
Key event to watch out today would be the Federal Open Market Committee decision in the US. The US central bank is widely expected to keep the interest rate unchanged but market will closely watch out for the wordings of the committee's statement for cues on the direction ahead.