NIFTY RETREATS FROM IMPORTANT HURDLE; STAY SHORT WITH STOP-LOSS OF 8410

NIFTY RETREATS FROM IMPORTANT HURDLE; STAY SHORT WITH STOP-LOSS OF 8410

WORLD MARKETS                             

US indices gained 0.3%-0.5%, with the Dow snapping a five-day losing streak.

Donald Trump took a protectionist tone in his first speech as president by saying that "We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs," and added that "We will follow two simple rules: Buy American and hire American.”

Trump signed his first executive order on shortly after his inaugural parade ended, directing agencies to ease the regulatory burdens associated with Obamacare. A special session of the US Congress will soon be held to "repeal and replace" Obamacare.

Trump also spelled out his priorities for trade policies, Security and job creation through White House website in which he said that he is committed to renegotiate NAFTA and should the partners refuse negotiation, US will withdraw from NAFTA. Personal and Corporate tax rates are also likely to go down.

U.S. Treasury yields gave back some gains after Trump's speech, with the benchmark 10-year note yield trading around 2.489% and the two-year note yield near 1.19%. Dollar index fell about 0.3% to 100.81.0

GE posted in-line adjusted earnings per share while revenue came slightly below estimates. P&G's results topped estimates on both the top and bottom lines.

European markets, except a 0.1% lower FTSE and marginally lower Italy, gained upto 0.3%.

For the week, US indices fell 0.2%-0.3%. In Europe, FTSE and CAC tumbled 1.9% and 1.5% respectively but DAX ended flat. In Asia, Nikkei fell 0.8%, Hang Seng was down 0.2% but Shanghai gained 0.3%.

AT HOME

After a modestly lower start, benchmark indices traded in a narrow range in the morning session but saw a sharp plunge in the noon trade to end with deep cuts of 1%, marking the biggest single day fall in a month. Sensex slumped 274 points to settle at 27034 while Nifty ended at 8349, down 86 points. BSE mid-cap and small-cap indices tumbled 1.5% and 1.3% respectively.

FIIs net sold stocks and stock futures worth Rs 26 cr and 656 cr respectively but net bought index futures worth Rs 437 cr. DIIs were net sellers to the tune of Rs 437 cr.

Rupee depreciated 6 paise to end at 68.18/$.

For the week, Sensex and Nifty lost 0.7% and 0.6% respectively, breaking the three-week winning streak.

Ultratech reported better-than-expected 5% rise in net profit at Rs 594 cr. Topline was down 2% at Rs 8372 cr. Operating profit margin improved to 17.5% from 17.1%.

OUTLOOK

Today morning Nikkei is down a percent, other Asian markets are trading and SGX Nifty is suggesting a flattish start for our market.

For couple of session we had been cautioning that a decisive crossover of 34-week moving average, placed around 8435, is required for a fresh upmove. Nifty, after hovering around this level for five-sessions, plunged on Friday to end at 8349, vindicating our caution.

We had also said that 8370 is the immediate support on the hourly chart, upon breach of which 8300-8275, where 200 DMA and the top made in December are placed, would be the downside target area to eye.

As mentioned above, Nifty, on Friday touched a low of 8341 and is set to open flat today. 8300-8275 continues to be immediate support, below which 8244, the 38.2% retracement level of the recent 7894-8461 upmove, would be the next support to eye.

Meanwhile, immediate hurdle on the hourly chart is placed around 8410, with the stop-loss of which trading shorts can be held on to.

HUL and Asian Paints will report their quarterly earnings today.