NIFTY ACHIEVES 34-DMA TARGET; 7810 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 34-DMA TARGET; 7810 IS THE IMMEDIATE HURDLE

 

WORLD MARKETS                             

 

Dragged down by energy and materials, Dow and S & P 500 fell 0.6% each while Nasdaq lost 0.8% yesterday.

 

ISM non-manufacturing for April was 55.7, above expectations and rising from March's 54.5 print. The employment index rose to 53.0 from 50.3 the prior month. The final April read on Markit services PMI rose to 52.8 from 51.3 in March. Factory orders rose a more-than-expected 1.1% in March. ADP employment report for April missed expectations with a decline from the prior month to 156,000. March trade deficit was $40.4 billion. First quarter productivity declined at an annual rate of 1%. Weekly mortgage application volume fell 3.4%.

 

US oil ended up 13 cents or 0.3% at $43.75 a barrel but Brent settled 0.8% down at $44.62 after an EIA report showed a rise of 2.8 million barrels.

 

Dollar index gained about 0.3%. Two Fed speakers hinted at a possible rate hike in June. Gold fell $17 to $1274 an ounce. Copper ended lower by 1.1% and Iron ore declined about 2.5%.

 

Except a modest 0.2% cut in Italy, rest of European markets, weighed down by sharp decline in mining stocks and renewed pressure in oil, lost 1%-1.3%.

 

AT HOME

 

Benchmark indices fell half a percent today, extending the losing streak to third straight day and closing at the lowest level since 11th April. Sensex lost 128 points to settle at 25102 while Nifty finished at 7707, down 40 points. BSE mid-cap and small-cap indices lost 1.2% and 1% respectively. Except a 0.2% rise in IT index, all the BSE sectoral indices ended in red with Metal and industrial indices leading the tally, down 3.5% and 2.8% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 66 cr, 1278 cr and 627 cr respectively. DIIs were net sellers to the tune of Rs 79 cr.

 

Rupee appreciated 13 paise to end at 66.55/$.

 

Adani Port nosedived 12% on lower-than-expected 2% cargo growth and jump in loans and advances.

 

Tata Motors plunged 6.5% after JLR April US sales fell 2% y-o-y.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting a flattish opening for our market.

 

Readers would recall that we had recommended going short on Nifty after a sell on hourly chart was generated below 7865 and since then have been working with downside target of about 7700, where 34-DMA was placed.

 

The benchmark touched a low of 7697 yesterday before closing at 7707, achieving the target mentioned above and vindicating our view.

 

A sustained trading below 7700 can take Nifty to around 7630, where a trendline adjoining bottoms made on 16th March and 11th April lands a support.

 

In yesterday's report we had advised booking some profit in short positions as 7700 approaches. Remaining positions should carry a stop loss of 7810, which is now the immediate hurdle on the hourly chart.

 

Hero Moto Corp and Eicher Motors will report their quarterly earnings today.