EQUITIES GET A STIMULUS BOOST; OIL TUMBLES ON SUPPLY CONCERNS

EQUITIES GET A STIMULUS BOOST; OIL TUMBLES ON SUPPLY CONCERNS

WORLD MARKETS

US indices soared nearly 1.3% each, cheering a fall in dollar and eyeing Wednesday's key Fed meeting.

The US dollar index fell nearly 1% yesterday to trade below 100. Nymex oil fell 96 cents to $43.88 a barrel, its lowest in six years. Brent tumbled $1.23 to $53.44.

Industrial production rose 0.1% in February, below expectations, with capacity utilization slightly lower at 78.9%. The Empire State Index posted 6.90 for March, below February's 7.78.  Home builder confidence fell two points to 53 in March, down from a high of 59 last September.

European markets surged between 1%-2.2% with DAX leading the tally and hitting a record, as extra liquidity provided by the European Central Bank (ECB) in the region continued to boost the sentiment.

Earlier Shanghai equities surged to five-year highs with China's Premier Li Keqiang suggesting more stimulus.

AT HOME

Benchmark indices ended lower by about a fifth of a percent after a rangebound but choppy trading session, closing at fresh one-month low. Sensex lost 66 points to settle at 28438 while Nifty finished at 8633, down 15 points. BSE mid-cap and small-cap indices lost 0.3% and 0.9% respectively. BSE Metal and FMCG indices lost 1.5% and 1% respectively, becoming top losers among the sectoral indices while IT and Realty indices were the top gainers, putting on 1.2% respectively.

Inflation, as measured by the wholesale price index fell to a steep -2.06% in February, marking the fourth straight month of deflation. The figure for December was revised to -0.5% from 0.11%. FIIs net sold stocks and index futures worth Rs 763 cr and 140 cr respectively but net bought stock futures worth Rs 277 cr. DIIs were net buyers to the tune of Rs 159 cr.

Rupee appreciated 16 paise to end at 62.80/$.

Advance tax numbers for the January-March quarter figures have shown a healthy growth for Banks. SBI, ICICI Bank and Yes Bank have paid 20%, 32% and 30% jump respectively. On the flip side L & T and M & M have paid 41% and 36% less. Reliance Industries has seeen 17% rise. TCS has seen a near-flat deposit.

OUTLOOK

Today morning Asian markets are trading with gain ranging from 0.2%-1.2% and SGX Nifty is suggesting about 50 points higher opening for our market.

While Nifty is set to open higher today, it has many hurdles to negotiate on the way up. Immediate resistance on the hourly chart is placed at 8720 above which 34-DMA, placed around 8785 would be the next hurdle to eye.

On the way down, lower band of bollinger, placed around 8600, is providing a floor to the benchmark. A breach of this would open up the space for further correction till about 8540 and then to 8403, which are 50% and 61.8% retracement levels of the 7961-9119 upmove.

The Federal Open Market Committee holds its March meeting over the next two days, with the release of its statement on Wednesday. Investors are watching to see if the key word "patient" remains in the statement, an indication of when short-term interest rates might go up.