NIFTY REBOUNDS FROM THE VICINITY OF 10583 SUPPORT; 10825 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 10583 SUPPORT; 10825 IS THE IMMEDIATE HURDLE

WORLD MARKETS

US indices climbed 0.6%-1.7% on Friday amid increasing hopes for a U.S.-China trade deal.

Economic data was mixed. Industrial production for January fell 0.6% as against expectation of an increase of 0.3%. Consumer sentiment data for February, meanwhile, topped expectations.

US crude rose $1.18 or 2.2% to 3-month high of $55.59 and Brent climbed $1.68 or 2.6% to $66.25, its highest this year, bolstered by OPEC-led supply cuts and the announcement of a higher-than-expected cut by Saudi Arabia.

European markets gained 0.6%-1.9%.

Earlier, Chinese inflation data for January missed expectations, coming in at 1.7% y-o-y, lower than expected 1.9%, which was also the figure for December.

For the week, Dow and Nasdaq gained 3.1% and 2% respectively, extending the winning streak to eighth consecutive week. S & P 500 rose for the seventh week out of eight, up 2.5%. European markets gained 2.3%-3.9%.

U.S. President Trump, speaking at a White House news conference, said Washington was closer than ever before to "having a real trade deal" with Beijing and that he would be "honored" to remove tariffs if an agreement can be reached. He added, however, that the talks were "very complicated." Trump also reiterated the possibility of extending the Mar. 1 deadline.

AT HOME

After plunging a percent and fifth in the first half, benchmark indices rebounded a percent from the bottom of the day in second half to end with cuts of a fifth of a percent. Sensex settled at 35808, down 67 points while Nifty lost 21 points to finish at 10724. BSE Mid-cap and small-cap indices fell 1.2% and 0.8% respectively. BSE Metal and Healthcare indices tumbled 2.3% each, becoming top losers among the sectoral indices while Utilities and Power indices were the top gainers, up 2.6% and 2.2% respectively.

FIIs net sold stocks and index futures worth Rs 966 cr and 1055 cr respectively but net bought stock futures worth Rs 131 cr. DIIs were net buyers to the tune of Rs 853 cr.

Rupee depreciated 6 paise to end at 71.22/$.

For the week, Sensex and Nifty fell 2% each, breaking two-week winning streak.

India’s trade deficit in January widened to $14.73 billion from $13.08 bn in December.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.6%-1.6% and SGX Nifty is suggesting about 25 points higher start for our market.

At the risk of repeating, we have been negative on Nifty after immediate support of 10930 was breached on 8th February. After downside target of 10855-10833 was achieved, we had said that 10700, where an upward sloping trendline adjoining bottoms made in December and January was place, was the next support below which, 10583, the low made in January, would be the next target to eye.

Nifty, on Friday, after achieving the 10700 level, plunged all the way to 10620, from where it rebounded sharply to end at 10724.

10825 is now the immediate hurdle on the hourly chart, a crossover of which is required to take a positive view on the benchmark.

10583, the bottom made in January, continues to be important support to eye.