17255 IS NEXT SUPPORT; 17600-17650 IS THE RESISTANCE ZONE

 

17255 IS NEXT SUPPORT; 17600-17650 IS THE RESISTANCE ZONE

 

WORLD MARKETS

 

US indices plunged 1.1%-1.8% on Friday as regulators took control of Silicon Valley Bank after it struggled to find another company to buy it.

 

This marked the biggest bank failure since the global financial crisis and fueled concern over whether the contagion spreads beyond SVB.

 

February nonfarm payrolls rose more than expected, but the wage growth grew less than expected and unemployment ticked higher.

 

US 10-year treasury yield plunged 20 bps to 3.703%. Dollar index fell 0.6% to 104.64. Gold surged 2.1% to $1867 per ounce.

 

Brent crude rose 1.5% to $82.78 a barrel and WTI rose 1.3% to $76.68.

 

In Europe, FTSE tumbled 1.7% while DAX and CAC fell 1.3% each. British economy grew 0.3% and managed to avoid a recession.

 

For the week, Dow fell 4.4% to post its worst weekly performance since June. S&P dropped 4.6%, while the Nasdaq lost 4.7%.

 

AT HOME

 

Sensex and Nifty nosedived 1.1% and 1% respectively, extending yesterday's 0.9% dip. Sensex settled at 59135, down 671 points while Nifty lost 177 points to finish at 17413. Nifty mid-cap and small-cap indices fell 0.8% and 0.9% respectively. Except 0.3% and 0.2% higher Consumer Durables and FMCG indices respectively, all the NSE sectoral indices ended in red, with Nifty Bank and Financial Services indices leading the losses, down 1.9% and 1.8% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2061 cr, 1603 cr and 2401 cr respectively. DIIs were net buyers to the tune of Rs 1350 cr.

 

Rupee depreciated 6 paise to end at 82.04/$.

 

For the week, Sensex and Nifty fell 1.1% and 1% respectively and registered lowest weekly close in five months.

 

OUTLOOK

 

Today morning, US futures are up 1%-1.3% as U.S. regulators announced plans to backstop both depositors and financial institutions associated with Silicon Valley Bank, seen as a move to stem further systemic risk. Hang Seng and Shanghai are up 1% and 0.25% respectively but Nikkei is down 1.6%. SGX Nifty is suggesting around 40 points lower start for our market.

 

In Friday's report we had said that 17430 was the immediate support, upon breach of which, 17300-17250 would be next support zone.

 

Nifty plunged all the way to 17324 before closing at 17413.

 

17255, the low made in February, which also coincided with lower band of weekly bollinger band as well as 20-month moving average, is the important immediate support to eye; On the way up, 17600-17650 is the immediate resistance zone on the hourly chart, above which, 17800, the top made during the week, would be next hurdle to negotiate.

 

For Banknifty, 39600 is the bottom made in late February, 39530 is where 200-DMA is placed and 39420 is the bottom made in January. This makes 39600-39420 important support area.  On the way up, 41200 is the immediate hurdle on the hourly chart, upon crossover of which, 41671, the top made during the week, would be next resistance to eye.