NIFTY SET TO ACHIEVE 34-DMA TARGET AND VINDICATE OUR VIEW
US indices fell 0.8%-1.1% on decline in oil and renewed concerns over global growth following weaker-than-expected Chinese manufacturing data. Nasdaq closed at its lowest level since March 14.
China's Caixin manufacturing PMI for April came in below forecast at 49.4, down from March's 49.7 and shrinking for a 14th straight month.
Energy stock led the laggards as US crude fell $1.13 or 2.5% to $43.65 a barrel and Brent settled down 2% to $44.97. Goldman Sachs was the top heavyweight loser while Apple gained 1.6% to snap its first eight-day losing streak since 1998.
Dollar index, after touching a low of 91.91 reversed to close at 93.06, the previous close being 92.58. Australian dollar hit its lowest against the dollar in nearly a month, and fell to its lowest against the yen since Feb. 12 after Reserve Bank of Australia unexpectedly cut rates.
European markets tumbled 0.9%-2.8% as earnings from leading banks disappointed and a sharp decline in mining and autos stocks weighed on sentiment. The UK Markit/CIPS manufacturing PMI fell to 49.2 in April, falling below the critical 50.0 level for the first time since March 2013.
After gaining nearly a percent in the initial trade, benchmark indices nosedived little less than two percent from the top of the day to end lower by about eight tenth of a percent. Sensex lost 207 points to settle at 25230 while Nifty finished at 7747, down 59 points. BSE mid-cap and small-cap indices lost 0.8% and 0.3% respectively. Except a 2.1% and 0.3% rise in BSE Telecom and Realty indices respectively, all the sectoral indices ended in red with IT and Metal indices leading the tally, down 1.6% and 1.3% respectively.
FIIs net sold stocks, index futures and stock futures worth Rs 755 cr, 984 cr and 401 cr respectively. DIIs were net buyer to the tune of Rs 485 cr.
Rupee appreciated 3 paise to end at 66.42/$.
Adani Port and SEZ reported a 38% jump in consolidated net profit at Rs 914 cr. Total income rose 18% to Rs 2162 cr.
Today morning Asian markets are trading with cuts of 0.2%-1% and SGX Nifty is suggesting about 20 points lower opening for our market.
In yesterday's report we had reiterated the downside target of 34-DMA for Nifty, which was placed around 7710. We had also advised holding on to short positions with the stop loss of 7900, which was the immediate hurdle on the hourly chart. The benchmark, after touching a high of 7890 in the initial trade, plunged to close at 7747 and is set to open lower today.
This will achieve our downside target of 34-DMA, which is now placed around 7715.
Traders can book some profit in short positions around 7715 and trail stop loss in remaining ones to 7860, which is now the immediate hurdle on the hourly chart.
Below 7715, you have got 7700, the 61.8% retracement level of the recent 7517-7992 upmove as the next support. If 7700 is breached, the possibility of retest of 7517 bottom will open up.