WORLD EQUITIES START MARCH WITH A BANG; NIFTY SET TO ACHIEVE 7250 TARGET AND MORE

WORLD EQUITIES START MARCH WITH A BANG; NIFTY SET TO ACHIEVE 7250 TARGET AND MORE

WORLD MARKETS                             

US indices, supported by a rise in oil prices and a better-than-expected ISM manufacturing report, soared 2.1%-2.9% yesterday, marking the best start to a month in more than three years.

Nymex oil reversed an intraday dip to end higher by 65 cents or 2% at $34.40 a barrel.

February ISM manufacturing came in at 49.5, about 1 point above expectations and topping January's 48.2 print. Construction spending rose 1.5% in January to its highest level since 2007. The Markit manufacturing PMI for February came in at 51.3, up from the flash 51.0 print but down from January's final 52.4 read.

European markets gained 1%-2.3%. ECB President Mario Draghi said that euro area inflation trends are weaker than expected and the ECB's policy review in March has to "be seen against the background of increased downside risks to the earlier outlook."

AT HOME

It was a spectacular beginning to March month as benchmark indices soared nearly three and half percent with Nifty registering the biggest percentage gain since 19th September 2013. Sensex surged 777 points to settle at 23779 while Nifty finished at 7222, up 235 points. BSE mid-cap and small-cap indices gained 3% and 3.2% respectively. All the BSE sectoral indices ended in green with FMCG and Consumer Durable indices leading the tally, up 4.9% and 4.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1761 cr, 706 cr and 495 cr respectively. DIIs were net buyers to the tune of Rs 317 cr.

Rupee appreciated 57 paise to end at 67.86/$.

Maruti reported 0.9% y-o-y dip in February sales at 1.17 lac units. Eicher reported 63% surge in Royal Enfield sales at 49156 units. Ashok Leyland sold 25% higher vehicles at 13403 units. M & M too reported healthy growth of 16% at 44002 units.  Hero Motocorp reported 13.6% growth.

OUTLOOK

Today morning Nikkei is up more than 3%, other Asian markets are up and SGX Nifty is suggesting nearly 100 points higher opening for our market.

In yesterday's report we had mentioned that 7090, the 61.8% retracement level of the recent 7252-6826 fall, which also coincides with the top made on budget day, is the immediate hurdle, upon sustained trading above which 7252 would be the next target to eye.

Nifty crossed this hurdle in first half an hour itself and surged all the way to 7235 before closing at 7222.

A big gap up opening would see the benchmark achieving 7250 target and going much beyond it.

7250 is the immediate previous top on the daily chart made on 22nd February and 34-DMA is placed around 7280 which makes 7250-7280 immediate resistance area. If Nifty is able to sustain above 7280 on closing basis, it would have crossed 34-DMA resistance after nearly 2 months. Upon happening that, next resistance zone or target area would be 7510-7540 where 7512 is the top made on 8th February and 7540 is where Nifty had made double bottom in September and December 2015.

7130 is the immediate support on 15 minute chart with the stop loss of which trading longs should be held on to.