9160-9180 IS THE IMMEDIATE SUPPORT AREA; XI-TRUMP MEETING, RBI POLICY IN FOCUS
US indices ended with cuts of 0.2%-0.6%, reversing earlier gains made following a solid employment data from ADP, after the Federal Reserve released the minutes from its March meeting.
The minutes showed Fed officials' intention to unwind the central bank's balance sheet later in the year if economic data continues to hold up. The Fed currently holds $4.5 trillion in bonds and actions to trim the balance sheet could have a major impact on markets given its magnitude. Fed Chair Janet Yellen indicated that such a move would be akin to a rate hike. The minutes also showed the central bank was concerned the stock market may be overvalued.
Markets also digested remarks from House Speaker Paul Ryan that tax reform will take longer to accomplish than repealing and replacing Obamacare would.
Data from ADP showed private payrolls rose by 263,000 last month, well above a consensus estimate of 185,000. The February number was revised significantly lower, however, from the originally reported 298,000. ISM non-manufacturing index came in at 55.2, below an expected read of 57.
The U.S. 10-year note yield traded lower, near 2.333%, after hitting 2.38% earlier in the session. Dollar index fell 0.1%.
WTI crude added 0.2% to $51.15 while Brent settled up 0.4% at $54.36 a barrel.
European markets, except a 0.1% higher FTSE, lost upto half a percent with DAX leading the losses. Eurozone services PMI jumped to 56.4 last month from 56 in February. UK services PMI improved to 55 from 53.3.
Sensex and Nifty gained 0.2% and 0.3% respectively, with both the indices closing at fresh record high and Sensex touching the 30000 mark for the first time after March 2015. Sensex settled at 29974, up 64 points while Nifty added 27 points to finish at 9265. BSE mid-cap and small-cap indices gained 0.5% and 1.1% respectively. BSE Realty index soared 2.4%, becoming top gainer among the sectoral indices, followed by 2.4% rise in Consumer Durable index. IT and Teck indices were the top losers, down 0.8% and 0.2% respectively.
FIIs net bought stocks and index futures worth Rs 340 cr and 635 cr respectively but net sold stock futures worth Rs 291 cr. DIIs were net sellers to the tune of Rs 194 cr.
Rupee appreciated 14 paise to end at 65.0925/$.
Today morning, except a marginally higher Shanghai, other Asian markets are trading with cuts of 0.4%-1% and SGX Nifty is suggesting about 40 points lower start for our market.
Just to reiterate, we had given targets of 9218 followed by 9400 after immediate hurdle of 9130 was taken out. Nifty achieved 9218 target on Monday and moved further higher to 9265 yesterday but is slated to open with a gap-down today.
9160-9180 is the immediate support area, with the stop-loss of which trading longs should be held on to. 9400-9420 continues to be upside target to eye.
The Monetary Policy Committee, headed by RBI Governor Urjit Patel, is likely to leave the rates unchanged at the end of its 2-day meeting today in view of hardening inflation. The language on inflation however will be closely watched for cues to future rate direction.
Chinese President Xi Jinping meets Trump in Florida today. Topping the agenda will be U.S.-China trade ties and U.S. requests for China to help rein in its nuclear-armed neighbor North Korea.