NIFTY HEADED TO KEY 34-DMA HURDLE; FED IN FOCUS

NIFTY HEADED TO KEY 34-DMA HURDLE; FED IN FOCUS

WORLD MARKETS

US indices ended mixed with Dow and S & P 500 losing 0.7% and 0.4% respectively while Nasdaq gained 0.2% ahead of the Federal Open Market Committee's statement that could shed light on the timing of an interest rate hike.

Housing starts fell 17% in February to the lowest level in a year as harsh winter weather took its toll. More encouragingly, building permits rose 3% and January housing starts were revised slightly higher to 1.08 million.

Nymex crude fell 42 cents to $43.46 a barrel, the lowest since March 2009. Dollar index continued to ease, falling about 1% while the Euro briefly edged above $1.06.

European markets, except a half a percent higher FTSE, fell between 06%-1.5%. Closely watched economic sentiment figure from the ZEW institute for Germany came in at 54.8 in March, which was the highest reading since February 2014, but below forecasts for a reading of 58.2. Eurozone inflation for February was confirmed at -0.3% y-o-y.

AT HOME

After gaining more than a percent in the morning trade, benchmark indices plunged to trade flat at one point of time, but recouped all the lost ground in lat hour of trade to end higher by a percent. Sensex soared 299 points to settle at 28736 while Nifty finished at 8723, up 90 points. BSE mid-cap and small-cap indices gained 0.6% and 0.2% respectively. Except a 0.3% and 0.2% cut in BSE IT and Teck indices respectively, all other sectoral indices ended higher with Healthcare and Capital Goods indices leading the tally, putting on 1.8% and 1.7% respectively.

Jindal Steel plunged after media reports suggested that the government is expected to reject two bids from the company for Gare Palma and Tara coal blocks citing "very low" bids and talk of cartelization. 

FIIs net bought stocks and stock futures worth Rs 266 cr and 799 cr respectively but net sold index futures worth Rs 487 cr. DIIs were net sellers to the tune of Rs 244 cr.

Rupee appreciated 10 paise to end at 62.70/$.

OUTLOOK

Today morning, Hang Seng and Taiwan are higher by about a percent, other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that immediate hurdle on the hourly chart is placed at 8720 above which 34-DMA, placed around 8780 would be the next hurdle to eye.

The benchmark yesterday ended at 8723, taking out the first hurdle and is now headed to tougher one at 8780. A crossover of 8780 can then pave the way for the further upside till about 8925, which is the 61.8% retracement level of the 9117-8612 fall.

On the way down, 8600, the bottom made on Monday is the important support to eye.

The FOMC's two-day meeting kicked off Tuesday, with its highly anticipated statement and press conference expected on Wednesday afternoon. Investors are looking at whether or not "patient" remains in the text as an indication of when short-term interest rates might go up.