STAY LONG WITH THE STOP-LOSS OF 9000
US indices climbed 0.5%-0.8% after the Federal Reserve raised rates but took a less aggressive stance than expected.
The Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 0.75% to 1% and indicated that it still expects three moves, as each Fed members' expectations for where rates will be in coming years changed little from the last meeting.
Treasury yields and Dollar fell after the statement. The 2-year yield, after touching 1.401%, its highest level since June 11, 2009, dropped to 1.30%, its lowest in a about week. The 10-year yield traded around 2.50%, also its lowest in roughly a week. Dollar index tumbled more than a percent to 101.68 from 100.52
WTI crude reversed seven-day losing streak to end 2.1% higher at $48.86 a barrel after weekly crude inventory data showed a drawdown in stockpiles. The International Energy Agency (IEA) also suggested that the Organization of Petroleum Exporting countries output cuts could create a crude deficit in the first half of 2017
In economic news, the consumer price index rose 0.1% in February for a 2.7% increase over the last 12 months, the biggest year-on-year gain since March 2012. Ex-food and energy costs, the core CPI rose 2.2%. Retail sales posted a 0.1% rise last month, the weakest print since August. Excluding automobiles, gasoline, building materials and food services, the ore retail sales rose 0.1% after an upwardly revised 0.8% jump in January. The Empire State Manufacturing Index edged lower to 16.4 for March. The new orders index climbed eight points to 21.3, its highest level since 2009. A separate report showed home builder sentiment hit 71 in March, its highest in 12 years.
European markets gained 0.2%-1.2% with Italy leading the tally. Basic resources led the gains after China's iron ore and steel prices soared on infrastructure spending. Employment in the euro zone increased 0.3% on a quarterly basis in the last quarter of 2016.
Benchmark indices ended marginally lower after a rangebound but choppy session. Sensex lost 45 points to settle at 29398 while Nifty finished at 9085, down 2 points. BSE mid-cap and small-cap indices however gained 1.1% and 0.7% respectively. BSE IT and Teck indices tumbled 1.8% and 1.2% respectively, becoming top losers among the sectoral indices while Telecom index climbed 1.8%, becoming top gainer, followed by 0.7% rise in Auto and Realty indices.
FIIs net bought stocks worth Rs 1141 cr but net sold index futures and stock futures worth Rs 237 cr and 379 cr respectively. DIIs were net buyers to the tune of Rs 127 cr.
Rupee appreciated 15 paise to end at 65.8175/$, hitting a 16-month high.
India's exports rose 17.5% y-o-y in February to $24.49 bn and imports rose 21.8% to $33.39 bn. Trade deficit narrowed to $8.8 bn from $9.8 billion in January, 2017.
Today morning, except a marginally lower Nikkei, other Asian markets are trading with gains of 0.2%-1.3% and SGX Nifty is suggesting about 70 points higher start for our market.
In yesterday's report we had reiterated the view that upon decisive crossover of 8970, next major target to eye is 10000 and one should hold on to long positions with the stop-loss of 8970.
After today's gap-up opening, immediate support on the hourly chart would shift to 9000, which should serve as the fresh stop-loss for trading longs.