WATCH OUT FOR FIRST-HOUR LOW

 

WATCH OUT FOR FIRST-HOUR LOW

 

WORLD MARKETS

 

US indices nosedived 3.6%-4.7%, with the Dow falling the most since June 2020  and closing at its lowest since March 2021, after quarterly reports from big retailers stoked concern of rising inflation biting into corporate profits.

 

Quarterly earnings from Target and Walmart showed higher fuel costs and restrained consumer demand hurting performance amid the hottest inflation in decades.

 

US 10-year trasury yield fell 10 bps to 2.89%. Dollar index rose 0.6% to 103.90. Gold was flat at $1816 per ounce.

 

Brent crude fell $2.41 cents, or 2.4%, to $109.52 a barrel, while WTI crude fell $2.5 cents, or 2.2%, to $109.85 a barrel.

 

European markets fell 1.1%-1.3%. U.K. inflation soared to a 40-year high of 9% in April as food and energy prices spiraled.

 

AT HOME

 

After rising just under a percent in the initial trade, benchmark indices gave away all the gains through the session to end marginally in the red. Sensex settled at 54208, down 110 points while Nifty lost 19 points to finish at 16240. Nifty mid-cap and small-cap indices fell 0.2% and 0.4% respectively. BSE Realty and Telecom indices slipped 1.8% and 1% respectively, becoming top losers among the sectoral indices while FMCG and Healthcare indices were the top gainers, up 1.2% and 0.5% respectively.

 

FIIs net sold stocks worth Rs 1255 cr but net bought index futures and stock futures worth Rs 62 cr and 926 cr respectively. DIIs were net buyers to the tune of Rs 376 cr.

 

Rupee depreciated 1 paise to end at 77.58/$.

 

ITC reported mild beat across parameters. Lupin disappointed.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.8%-3% with Hang Seng leading the losses and SGX Nifty is suggesting around 300 points lower start for our market.

 

In yesterday's report we had said that 16484, the lower end of the gap created by gap-down opening on 6th May, is the next upside target and had advised holding on to long positions with the stop-loss of 15985.

 

Nifty, after touching a high of 16400, slipped to end at 16240 and is set to open near 16000 today.

 

15985 continues to be immediate support on the hourly chart, upon sustained trading below which (we will watch out for first-hour low for that), would open up the possibility of retest of recent 15735 bottom;

16484, the lower end of the gap created by gap-down opening on 6th May, continues to be upside level to eye.

 

33800 is immediate support for Banknifty, upon sustained trading below which, 33000, the low made Monday, would be the next downside level to eye; 34800 is immediate hurdle.