RISK ON TRADE TAKES EQUITIES, OIL HIGHER; NIFTY MOVES CLOSER TO 7240 RESISTANCE

RISK ON TRADE TAKES EQUITIES, OIL HIGHER; NIFTY MOVES CLOSER TO 7240 RESISTANCE

WORLD MARKETS                             

US indices, helped by rise in oil prices and stabilization in China, soared nearly a percent and half yesterday.

US crude March future gained $1.84 or 6.2% to $31.48 a barrel. Brent rose $1.75 or 5.3% to $34.76 a barrel. The International Energy Agency, in its medium-term outlook, said that U.S. shale oil production was expected to fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017.

Earlier Shanghai Composite jumped more than 2% to lead gains in Asian equities.

The flash read on Markit US Manufacturing PMI for February came in at 51.0, down from the final January print of 52.4 and hitting its lowest since October 2012.

Dollar index gained about 0.8%. Gold April futures fell $21 to $1210 an ounce.

European markets gained 1.5%-3.5%. Pound sterling hit a seven-year low after popular London Mayor Boris Johnson said he would campaign for Britain to leave the European Union ahead of a June 23 referendum.

Australian mining giant BHP Billiton reported a net loss of $5.67 billion for the first half of the 2016 financial year and cut its interim dividend by 75 percent to 16 cents

AT HOME

Benchmark indices ended higher by a third of a percent after a choppy trade, extending the winning streak to fourth straight day. Sensex settled at 23789, up 80 points while Nifty added 24 points to finish at 7234. BSE mid-cap and small-cap indices gained 0.8% and 0.5% respectively. BSE Energy and Healthcare indices climbed 1.4% and 1.1% respectively, becoming top gainers among the sectoral indices while Utilities and Power indices lost 0.6% and 0.3% respectively.

FIIs net sold stocks and index futures worth Rs 657 cr and 378 cr respectively but net bought stock futures worth Rs 354 cr. DIIs were net buyers to the tune of Rs 598 cr.

Rupee fell 14 paise to end at fresh 30-month low of 68.60/$.

Effective from April 1, Cairn, PNB and Vedanta will move out of Nifty and Aurobindo, Bharti Infratel, Eicher Motors and Tata Motors DVR will move in, taking the number of stocks in Nifty benchmark index to 51.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting a flattish start for our market.

Yesterday was one more day when Nifty moved closer to 7240 but could not cross it decisively. As we have been mentioning a sustained trading above 7240 would pave the way for the further upside till about 34-DMA, which is now placed around 7380.

Immediate support on the hourly chart has moved up to 7140, with the stop loss of which existing longs can be held on to.

Budget session of Parliament starts today and is expected to be a stormy one as the opposition has said that it wants debate on JNU issue first. Railway budget will be presented on Thursday and Union Budget on Monday.

Government will offload its 5% stake in NTPC via OFS. The floor price has been set at Rs 122 per share which will fetch around Rs 5000 cr. Institutional book will open today while Retail book will be auctioned on Wednesday.