20-DMA LANDS SUPPORT AROUND 8850; 8970 CONTINUES TO BE MAJOR HURDLE

20-DMA LANDS SUPPORT AROUND 8850; 8970 CONTINUES TO BE MAJOR HURDLE

WORLD MARKETS                             

US indices ended flat to modestly higher on Friday.

Federal Reserve head Janet Yellen, at a speech, emphasized the possibility of a rate hike this month.

IHS Markit sevices PMI hit a five-month low and the ISM nonmanufacturing index came in at 57.6 for February.

Dollar index tumbled 0.8% to 101.34. WTI crude rose 1.4% to $53.33 a barrel while Brent added 1.5% to $55.90.

In Europe, FTSE and DAX fell 0.1% and 0.3% respectively while CAC and Italy added 0.6% and 1.2% respectively. Euro zone composite PMI for February was unchanged at 56.0, up from 54.4 in January. However, retail sales data for the bloc showed a decline of 0.1 percent on the month.

For the week, US indices gained 0.4%-0.7%. In Europe, France soared 3.1%, followed by 1.9% higher DAX and 1.8% up FTSE. In Asia, Nikkei gained 1% but Shanghai and Hang Seng lost 1.1% and 1.7% respectively.

AT HOME

Benchmark indices ended little changed after trading in a narrow range through the session. Sensex settled at 28832, down 7 points while Nifty lost 2 points to finish at 8898. BSE mid-cap and small-cap indices however managed to gain 0.2% and 0.3% respectively. BSE Telecom index gained 1.2%, becoming top gainer among the sectoral indices, followed by 1.1% rise in Oil & Gas and Energy indices.

FIIs net bought stocks and stock futures worth Rs 1529 cr and 4 cr respectively but net sold index futures worth Rs 1338 cr. DIIs were net sellers to the tune of Rs 737 cr.

Rupee depreciated 10 paise to end at 66.81/$.

India's Nikkei/IHS Markit Services PMI rose to 50.3 in February from 48.7 in January. This was the first reading above 50 mark in 4 months, which separates growth from contraction.

For the week, Sensex and Nifty lost 0.2% and 0.5% respectively, breaking five-week winning streak.

GST Council on Saturday cleared the crucial Central GST (CGST) and Integrated GST bills (IGST) bills. Next meeting on March 14-15 will take up approval of Union Territory GST (UTGST) and the State GST (SGST) laws, which will then complete the legislative exercise

OUTLOOK

At the beginning of the annual meeting of parliament yesterday, Chinese Premier Li Keqiang sounded a cautious note and said that China would expand its economy by around 6.5%, compared to the growth target of 6.5 to 7 percent set last year.

North Korea today fired 4 missiles off its east coast, 3 out of which landed inside Japan’s exclusive economic zone.

Today, Nikkei is down about half a percent while Hang Seng and Shanghai are up 0.4% and 0.1% respectively. SGX Nifty is suggesting about 10 points higher start for our market.

Nifty, after touching a low of 8860 on Friday, rebounded to end at 8898. While a "Sell" has been confirmed on the hourly chart, on daily chart, an important support in the form of 20-DMA is placed around 8850. Below that, next support will come in the form of 8787-8804 gap.

8970 continues to be major hurdle, a decisive crossover of which is required for a fresh upmove.