NIFTY RETREATS AFTER ACHIEVING 7975 TARGET; 7800-7840 IS THE SUPPORT AREA

NIFTY RETREATS AFTER ACHIEVING 7975 TARGET; 7800-7840 IS THE SUPPORT AREA

WORLD MARKETS                             

Dow and S & P 500 fell about half a percent while Nasdaq ended little changed yesterday with telecoms leading declines amid the latest batch of earnings.

United, Travelers and Verizon reacted negatively to the earnings- the latter closed 3.3% lower as one of the greatest contributors to declines in the Dow.

Nymex oil fell $1 or 2.3% while Brent gave away 2.8% after market intelligence firm Genscape suggested a build-up of more than 840,000 barrels in U.S. crude at the Cushing, Oklahoma, delivery point in the four days to April 19.  Reports that Russia and Iran said they were ready to raise oil production further also weighed.

The Philly Fed Index was minus 1.6 in April. Weekly jobless claims came in at 247,000, the lowest since 1973. FHFA Housing Price Index showed a 0.4% rise in February, after a downwardly revised 0.4% rise in January. Leading indicators in March rose 0.2%.

European markets ended mixed. FTSE and CAC lost 0.4% and 0.2% respectively while DAX and Italy rose 0.1% and 0.4% respectively.

European Central Bank kept rates unchanged. During the following press conference, Draghi said he expects rates to remain at present or lower levels for an extended period and warned that euro zone inflation might turn negative again in coming months. He also stressed in the conference that the central bank hadn't talked about helicopter money.

Euro climbed against the dollar following the ECB decision and during the press conference, but fell back afterwards following Draghi's hawkish comments on helicopter money.

AT HOME

After gaining about eight tenth of a percent in the initial trade, benchmark indices saw a sustained downward move through the session to end little changed. Sensex settled at 25880, up 36 points while Nifty lost 3 points to finish at 7912, breaking 6-day winning streak. BSE mid-cap and small-cap indices lost half a percent each. BSE Bankex and Finance index gained 2% and 1.2% respectively, becoming top gainers among the sectoral indices while IT and Teck indices fell 1.5% each, becoming top losers.

FIIs net bought stocks and stock futures worth Rs 805 cr and 995 cr respectively but net sold index futures worth Rs 74 cr. DIIs were net buyers to the tune of Rs 66 cr.

Rupee closed at 66.39/$, depreciating 17 paise compared to previous close.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.8% and SGX Nifty is suggesting a marginally lower opening for our market.

In yesterday's report we had reiterated the view that 7970-7980, where previous two tops made in December 2015 and January 2016 are placed; continue to be the target as well as the hurdle area, a decisive crossover of which is required for further upmove.

Yesterday, the benchmark, after touching a high of 7978, reversed to end at 7912.

7980 continues to be important hurdle, a decisive crossover of which is required for fresh upmove.

7800-7840 is the support zone on the way down, a breach of which will generate a sell on the hourly chart and would pave the way for the further fall.

Traders are advised to wait for the crossover of 7980-7800 levels on either side for taking a fresh view.

RIL, HDFC Bank and Cairn will report their quarterly earnings today. HDFC Bank is expected to report NII growth of 19.3% at Rs. 7173 cr. Net profit is likely to rise 20.6% to Rs. 3385 cr. Reliance Industries is expected to show a lower profit of Rs 7000 cr as against Rs 7218 cr in the previous quarter. GRM is expected to fall to $10.8/bbl from $11.5.