TRAIL STOP-LOSS TO 14700

 

TRAIL STOP-LOSS TO 14700

 

WORLD MARKETS

 

US indices gained 0.3%-0.6% to hit record highs on signs of progress towards more economic stimulus and after digesting January jobs report.

 

The Senate passed a budget resolution early Friday, as Democrats moved forward with the process to pass a $1.9 trillion coronavirus relief bill without Republican votes. President Biden warned that Republican efforts to pass a smaller bill would only prolong the economy’s path to recovery.

 

U.S. added 49,000 jobs in January, slightly below the 50,000 payrolls expected by economists. The unemployment rate fell to 6.3%, better than projections of 6.7%. December’s numbers were revised to show a loss of 227,000 jobs from the initial reading of 140,000 jobs lost.

 

Brent crude settled 0.85% higher at $59.34 per barrel while WTI crude settled 1.1% higher at $56.85 per barrel, both hitting their highest level in a year.

 

10-year and 30-year Treasury yield rose to 1.15% and 1.95% respectively. The dollar retreated 0.6% to 91.04. Spot Gold climbed 1% to $1,810.26 per ounce.

 

In Europe, FTSE fell 0.2%, DAX was little changed while CAC and FTSE MIB rose 0.9% and 0.8% respectively.

 

For the week, US indices rose 3.9%-6% for their best week since November. Bent rose more than 6% for tis best week since October. OPEC+, stuck to their supply tightening policy at a meeting on Wednesday a weekly supply report showed a drop in U.S. crude inventories to their lowest since March. gold is down 1.9%, its biggest decline since the week ended Jan. 8 in part due to higher U.S. Treasury yields

 

AT HOME

 

After rising around eight tenth of a percent in the initial trade, benchmark indices gave three fourth of the gains to end higher by a fifth of a percent, extending the winning streak to fifth straight day and hitting fresh record highs. Sensex settled at 50731, up 117 points while Nifty added 28 point to finish at 14924. Nifty small-cap index rose 0.3% while nifty mid-cap index ended lower by 1.1%. BSE Telecom and Teck indices slipped 2.4% and 1.3% respectively, becoming top losers among the sectoral indices while Realty index and Bankex were the top gainers, up 0.9% and 0.9% respectively.

 

FIIs net bought stocks worth Rs 1462 cr but net sold index futures and stock futures worth Rs 461 cr and 35 cr respectively. DIIs were net sellers to the tune of Rs 1419 cr.

 

Rupee appreciated 3 paise to end at 72.92/$.

 

Monetary Policy Committee voted unanimously to keep the repo rate unchanged at 4% and maintained an accommodative stance. RBI decided to reverse the CRR cut announced in March 2020 in two phases and said that normalisation of CRR will leave space for the central bank to put other liquidity management tools to work. It projected FY22 GDP growth at 10.5% and revised CPI inflation expectation to 5.2% in Q4 FY21, 5.2-5.0% in the first half of FY22 and 4.3% in Q3 Fy22.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 2% and 1% respectively while Shanghai is little changed. SGX Nifty is suggesting around 90 points higher start for our market.

 

We have been positive on Nifty after 14075 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss. On Friday, we had said that 15000-15050, around which a trendline adjoining tops made in 2010 and 2015 is placed, continues to be next major target/resistance to eye and had advised trailing the stop-loss in long positions to 14469.

 

Nifty surged to touch a high of 15014 before closing at 14924 and is set to open above 15000 today.

 

15014, the top made last week, is the immediate hurdle to eye, upon crossover of which 15500 would be the next upside levels to eye. Immediate support on the hourly chart is placed around 14700 with the stop-loss of which, long positions can be held on to.