NIFTY REBOUNDS SHARPLY FROM THE VICINITY OF 34-DMA SUPPORT

NIFTY REBOUNDS SHARPLY FROM THE VICINITY OF 34-DMA SUPPORT

WORLD MARKETS                             

US indices fell 0.1%-0.4% yesterday, paring gains of nearly a percent made in the initial trade.

Nymex oil rose 64 cents or 1.6% to $40.36 a barrel, its highest close since Dec. 3 ahead of the April 17 meeting of oil producers in Doha, Qatar, aimed at freezing current output levels. Brent gained 2.1% to settle at $42.83 a barrel. Dollar index ended slightly lower. Gold jumped $14 to $1258 an ounce.

European markets, except a 0.1% lower FTSE, gained 0.2%-1.2% with Italy on the top as fresh reports supported hopes the Italian government will soon form a plan to set up a state-backed fund that will buy bad loans held by the country's banks. Basic Resources was one of Europe's top-performing sectors as several metal prices ticked higher.

Earlier Shanghai composite jumped more 1.6% amid some encouraging inflation data. Producer prices declined a less-than-expected 4.3% in March from a year earlier while consumer prices were unchanged from February's rate with a 2.3% rise last month.

AT HOME

After falling about half a percent, benchmark indices saw a dramatic reversal in the late noon trade to end with hefty gains of a percent and half. Sensex soared 348 points to settle at 25022 while Nifty ended at 7671, up 116 points. BSE mid-cap and small-cap indices gained 1.1% and 0.6% respectively. All the BSE sectoral indices closed in green with Telecom and Teck indices leading the tally, up 3.9% and 2.2% respectively.

FIIs net bought stocks worth Rs 107 cr but net sold index futures and stock futures worth Rs 29 cr and 374 cr respectively. DIIs were net buyers to the tune of Rs 304 cr.

Rupee appreciated 5 paise to end at 66.43/$.

Private weather forecaster Skymet yesterday said that monsoon this year is likely to remain at 105% level of the long-period average (LPA). After two years of below average rainfall, monsoon this year are extremely important for revival of rural economy

OUTLOOK

Today morning, Nikkei is up more than a percent, Shanghai and Hang Seng are marginally in the red, other Asian markets are trading with modest gains while SGX Nifty is suggesting a marginally lower start for our market.

For past couple of sessions we have been saying that Nifty, after a hefty run-up, should see a correction till about 34-DMA. 34-DMA, which itself is upward moving, was placed around 7470 yesterday. The benchmark, after touching a low of 7517 yesterday, rebounded sharply to end at 7671, taking out the immediate hurdle of 7650.

7778, the top made in March, is the next upside target to eye. 7590 is the immediate support on the hourly chart with the stop loss of which long positions can be held on to.

India’s March CPI and February IIP data will be out today. CPI is expected to show a reading of 5.05-5.18. In February CPI had dipped to a four-month low of 5.18%. IIP is expected to show a growth of 1.5% as against a contraction of 1.5% in January.