NIFTY ACHIEVES FIRST DOWNSIDE TARGET, ON TRACK FOR SECOND

NIFTY ACHIEVES FIRST DOWNSIDE TARGET, ON TRACK FOR SECOND

WORLD MARKETS                             

Dow and Nasdaq plunged 1.5% each while S & P 500 lost 1.1% on Friday on mounting tensions over Greece debt negotiations and the put trading rules in China.

Chinese futures tumbled over news of coming government regulation to expand short-selling and limit over-the-counter margin trading.

Consumer price index showed an increase of 0.2% in March, below expectations of 0.3%. Core CPI, excluding food and energy, came in slightly above expectations at 0.2%, the same level as in February. Consumer sentiment rose more than expected in April.

European markets fell between 1%-2.6%. Greek stocks closed around 3% lower. Euro zone finance ministers are due to meet on April 24 to discuss Greece making economic and political reforms in return for aid. Some officials, like German Finance Minister Wolfgang Schaeuble, are skeptical the meeting will yield results.

German bund yields dipped below 0.05%. Italian, Spanish and Portuguese 10-year bond yields jumped more than 5 percent.

Nymex crude fell 97 cents or 1.7% to $55.74 a barrel but posted gains for the fifth week in a row.

For the week, US markets fell between 1%-1.3%. European markets plunged between 1.3%-5.5% with DAX leading the tally.

China, on Sunday, lowered the reserve requirement ratio for all banks by 100 basis points. This marked the second cut in two months as the world's second-biggest economy attempted to combat slowing growth.

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end deep in the red, extending the losing streak to third straight day. Sensex lost 0.8% or 224 points to settle at 28442 while Nifty finished at 8606, down 101 points or 1.2%. BSE mid-cap and small-cap indices tumbled 1.2% and 2% respectively. Except a 1.1% rise in BSE Metal index, all other sectoral indices ended in red with Healthcare and IT indices leading the tally, giving away 3% and 2% respectively.

FIIs net sold stocks and stock futures worth Rs 676 cr and 893 cr respectively but net bought index futures worth rs 409 cr. DIIs were net buyers to the tune of Rs 73 cr.

Rupee depreciated 6 paise to end at 62.36/$.

For the week, Sensex and Nifty lost 1.5% and 2% respectively, breaking the two-week winning streak.

India's trade deficit in March widened to a 4-month high of $11.79 bn as imports rose to $35.74 bn from $28.39 bn while exports stood at $23.95 bn vs $21.55 bn. Gold imports surged to $4.95 bn from $1.98 bn.

Reliance Industries reported better-than-estimated 22.8% rise in fourth quarter net profit at Rs 6243 cr driven by strong operational performance in refining business. Revenues however were down 30.1% to Rs 56043 cr. Gross refining margin (GRM) also topped expectations at USD 10.1 a barrel against USD 7.3 a barrel in the December quarter.

OUTLOOK

Today morning, barring a modestly higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

After advising booking profits in 8800-8860 region, we turned our bias on Nifty negative when immediate support of 8722 was breached. We had given downside targets of 8625, 8560 and 8490, which were the 38.2%, 50% and 61.8% retracement levels of the 8269-8845 upmove.

The benchmark has since fallen to 8597, vindicating our negative bias. Oscillators on the hourly chart are suggesting some more downside and 8560 followed by 8490 would continue to be the downside targets to eye.

Immediate resistance on the hourly chart is placed at 8740, with the stop loss of which short positions can be held on to.

The second part of budget session of Parliament starts today and will conclude on 8th May.