NIFTY FAILS 34-DMA TEST

NIFTY FAILS 34-DMA TEST

WORLD MARKETS                             

US indices ended mixed yesterday with Dow and S & P 500 losing 0.6% and 0.5% respectively while Nasdaq gained 0.2%

Weekly jobless claims rose slightly to 291,000 for the week ended March 14. The national current account deficit sharply widened in the fourth quarter to the largest level since 2012. The Philly Fed index showed a modest increase in manufacturing in March but indicated the lowest level of growth in more than a year. Leading indicators rose 0.2 percent, in-line with estimates.

Apple officially began trading as a member of the Dow Jones industrial average on Thursday, replacing AT&T in the index.

US dollar recovered from 97.67 to 99.02 as the euro fell from $1.084 to trade just above $1.06.

Nymex crude fell 70 cents or 1.57% to $43.96 a barrel after OPEC news renewed fears of oversupply. Gold rose $17.70 to $1169 an ounce.

European markets, except a modestly lower DAX, gained upto 1.1% with Italy leading the tally. A two-day European Union (EU) summit began yesterday, at which the Greek debt crisis is expected to top the agenda. Greek bond yields jumped on news that the European Central Bank was considering curbs on Greek bank purchases of government debt.

AT HOME

After gaining more than a percent in the initial trade, benchmark indices nosedived more than a percent and half from the top of the day to end lower by about half a percent. Sensex settled at 28470, down 152 points while Nifty finished at 8635, down 51 points. BSE mid-cap and small-cap indices lost 0.6% each. Except a 0.5% rise in BSE Consumer Durable index, all other sectoral indices ended in red with Bankex and Realty index leading the tally, giving away 1.8% and 1.5% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1429 cr, 171 cr and 448 cr respectively. DIIs were net buyers to the tune of Rs 53 cr.

Rupee appreciated 17 paise to end at 61.52/$.

Rajya Sabha had to defer the consideration of Mines and Minerals Bill and Coal bill due to opposition from Congress and Left on the issue that mines is a state subject and states have not been consulted on mines bill.

OUTLOOK

Today morning Asian markets are trading with modest cuts and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that after a gap up opening, Nifty would be close to the important 34-DMA resistance placed around 8770, a decisive crossover of which is required for the further upmove.

The benchmark touched a high of 8788 in the initial trade but could not sustain there and plunged all the way to end at 8635.

34-DMA, which has now moved to 8760, continues to be important hurdle, a close above which is required to put bulls in the dominating position. On the way down, 8540 and 8404, the 50% and 61.8% retracement levels of the 7961-9119 upmove, are the support levels to eye.

Traders can initiate fresh short positions once Nifty trades below 8612, the bottom made on Monday, with the stop loss of 8690, the immediate resistance on the hourly chart.

The Lok Sabha is likely to take up today the cabinet-approved anti-black-money bill that proposes a short window to overseas income tax assesses to declare assets, pay tax and penalty and avoid imprisonment.