MOODY’S UPGRADES INDIA’S RATING OUTLOOK; NIFTY ON TRACK TO ACHIEVE 8800 TARGET

MOODY’S UPGRADES INDIA’S RATING OUTLOOK; NIFTY ON TRACK TO ACHIEVE 8800 TARGET

WORLD MARKETS                             

Dow and S & P 500 gained about 0.2% each while Nasdaq climbed 0.8% yesterday in the backdrop of dovish Fed minutes and plunging oil.

The Federal Reserve Open Market Committee released the minutes of its March meeting, revealing that central bank policy makers were divided over the timing of an interest rate hike. The minutes showed only one policymaker saw inflation from wage growth.

Brent crude plunged 5.5% to below $55 a barrel and Nymex fell $3.56 or 6.6% to $50.42 a barrel after the U.S. Energy Information Administration said weekly crude inventories rose by 10.9 million barrels, nearly a 14-year high and more than expected. Earlier, data from the American Petroleum Institute (API) showed U.S. crude stocks surged 12.2 million barrels last week against analyst expectations for an increase of 3.4 million barrels.

Total mortgage application volume rose 0.4 percent week-to-week

European markets lost 0.4%-0.7%. Shares of BG Group closed 27% higher after Royal Dutch Shell confirmed that it was in advanced talks to buy BG in a £47 billion ($69 billion) cash-and-shares offer. This would be the first major oil company takeover deal since Chevron bought Texaco for $36 billion in 2000.

AT HOME

After a gap up opening, benchmark indices added some more gains through rest of the session and finally ended higher by nearly two third of a percent, extending the rising streak to fourth straight day and closing at the highest level since 12th March. Sensex gained 191 points to settle at 28708 while Nifty finished at 8714, up 54 points. BSE mid-cap and small-cap indices gained 0.6% and 1.8% respectively. Except a 0.3% cut in Bankex, all the sectoral indices ended higher with IT and Teck indices leading the tally, putting on 2% and 1.7% respectively.

FIIs net sold stocks and stock futures worth Rs 479 cr and 258 cr respectively but net bought index futures worth Rs 1174 cr. DIIs were net buyers to the tune of Rs 383 cr.

Rupee appreciated 1 paise to end at 62.24/$.

OUTLOOK

Rating agency Moody's has affirmed India's Baa3 rating and has upgraded the outlook to positive from stable. “There is an increasing probability that actions by policy makers will enhance the country’s economic strength and, in turn, the sovereign’s financial strength over coming years,” Moody’s said.

Today morning Asian markets SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that after the crossover of 34-DMA placed around 8705, next target to eye would be 8800, which is the 61.8% retracement level of the entire 9119-8269 fall. The benchmark closed at 8714 yesterday and is set to open with a gap up today, moving towards the 8800 target.

"Hold on to trading longs with a trailing stop loss" continues to be the advice. Immediate support on the hourly chart has moved up to 8600, which should serve as that stop loss.