STAY LIGHT TILL 8650-8900 RANGE IS BROKEN

STAY LIGHT TILL 8650-8900 RANGE IS BROKEN

WORLD MARKETS

US indices gained between 0.1%-0.5% yesterday, with the Dow and S & P 500 touching record intraday high as Fed Chair Janet Yellen's congressional testimony indicated that a rate hike would likely come later rather than sooner.

Yellen's prepared remarks said no rate hike is expected for the next few FOMC meetings. She later said in a question-and-answer session that the Fed would not raise rates before it found confidence in the economic recovery, overcoming current concerns about the labor market, below-objective inflation and the decline in energy prices.

On the data front, the S&P/Case-Shiller composite index of home prices in 20 cities increased by 4.5 percent in December from the same period last year. Markit's services PMI rose to 57 in February from 54.2 in January, indicating that the U.S. services sector expanded in February at its fastest pace since October. U.S. consumer confidence fell more than expected in February, pulling back from a multi-year high according to a private sector report.

Nymex oill fell 17 cents to $49.28 a barrel.

European markets gained between 0.5%-0.8% after the group of euro country finance ministers announced that it had approved Greece's reform plans, thereby giving the go-ahead for the four-month extension of the bailout program. FTSE closed at record high.

                                                             

AT HOME

Benchmark indices ended marginally higher after a choppy trading session, breaking two-day losing streak. Sensex settled at 28975, up 30 points while Nifty gained 7 points to end at 8762. BSE mid-cap and small-cap indices however lost 0.2% and 0.8% respectively. BSE FMCG and Capital Goods indices gained 1.4% and 1.1% respectively, becoming top gainers among the sectoral indices while Oil & Gas and Metal indices were the top losers, giving away 1.2% and 1.1% respectively.

FIIs net bought stocks and stock futures worth Rs 697 cr and 447 cr respectively but net sold index futures worth Rs 252 cr. DIIs were net sellers to the tune of Rs 147 cr.

Rupee appreciated 13 paise to end at 62.195/$.

Laying the ground work for fresh fiscal relations between the Centre and the states, the 14th Finance Commission report was tabled by finance minister in Lok Sabha yesterday, recommended devolution of 42 percent of central taxes to states.

The contentious Bill on land acquisition was introduced in the Lok Sabha yesterday amid a walkout by the entire Opposition. Another Bill on mining ​was also introduced and faced strong protests by the Opposition, especially the Biju Janata Dal (BJD), which said its provisions “infringed upon the Constitutional rights of the States.”

OUTLOOK

China's HSBC flash manufacturing PMI for February has come in at a four-month high of 50.1 as against 49.7 in January.

Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 20 points higher opening for our market.

Broadly, Nifty continues to be in a consolidation mode after big up move in January, followed by a steep fall in early February. On the way down, 34-DMA, placed around 8650, is the immediate support, where the trendline adjoining recent bottoms on the daily chart is also placed.

On the way up, 8900, where the trendline adjoining recent tops on the daily chart is placed, is the resistance, a breach of which would mark the breakout from this consolidation.

Traders are advised to keep trading volumes low till this 8650-8900 range is broken on either side.

Trading short should carry a strict stop loss of 8830, which is the immediate resistance on the hourly chart.