8970-8860 CONTINUES TO BE THE RANGE; US DATA, ASSEMBLY ELECTION RESULTS TO BE WATCHED

8970-8860 CONTINUES TO BE THE RANGE; US DATA, ASSEMBLY ELECTION RESULTS TO BE WATCHED

WORLD MARKETS                             

US indices ended marginally higher ahead of Friday's crucial jobs report which will provide hints as to whether the Federal Reserve will raise rates at its meeting next week.

Initial jobless claims bounced back from 44-year lows, with import prices rising 0.2%.

US treasuries extended losses with the benchmark 10-year note yiedl climbing above 2.6%.

Brent crude fell 1.7% to $52.19 a barrel, while US crude eased 2% to $49.28.

The European Central Bank (ECB) kept its benchmark interest rate unchanged and said it would keep its massive asset-buying program.

It removed a reference to using all available measures to induce growth and inflation "because the sense of urgency is not there," ECB President Mario Draghi said. ECB also revised its inflation forecasts upwards from 1.5% at the end of 2018 compared to 1.6%. In terms of growth, the bank has also revised its forecasts upwards for this year from 1.7% to 1.8%.

The euro surged after Draghi's comments, above the $1.06 level before slipping to $1.0575.

European markets, except a 0.3% lower FTSE, gained upto 0.5%. Basic resources slumped on soft consumer price data in China and a weakening of the yuan. Oil and gas sector was also down after another drop in oil prices. Greece's unemployment rate fell to 23.1% in December from 24.1% for the same time in 2015.

AT HOME

Benchmark indices ended marginally in the green after a trading in a narrow range through the session. Sensex gained 27 points to settle at 28929 while Nifty finished at 8927, up 3 points. BSE mid-cap and small-cap indices however fell 0.2% and 0.1% respectively. BSE Auto and Consumer Discretionary Goods & Services indices gained 0.6% and 0.4% respectively, becoming top gainers among the sectoral indices while Oil & Gas, Metal and Healthcare indices fell 0.6% each, becoming top losers.

FIIs net bought stocks worth Rs 488 cr but net sold index futures and stock futures worth Rs 617 cr and 525 cr. DIIs were net buyers to the tune of Rs 11 cr.

Rupee depreciated 2 paise to end at 66.71/$.

Dr Reddy nosedived 5.1% after the US Food and Drug Administration (FDA) issued 13 observations for its Duvvuda oncology formulation facility.

Exit polls released yesterday evening predicted BJP cruising through in Uttar Pradesh. AAP has emerged topper in Punjab, but Congress is close behind. BJP is seen snatching the rule from Congress in Uttarakhand. In Goa, BJP is likely to be the single largest party but might fall short of majority. In Manipur, Congress and BJP are neck-to-neck.

OUTLOOK

Today morning, Nikkei is up more than a percent, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 20 points higher start for our market.

As we have been mentioning, a decisive crossover of 8970-8860 range, on either side, is required for taking a fresh directional view. After today's modestly higher start, Nifty would be close to 8950 mark and one would still watch out for 8970 hurdle. So it seems markets would wait for actual results of the assembly elections before making up their mind.

The actual results of UP election will be out on Saturday and markets will react to it on Tuesday with Monday being an off on account of Holi.

Traders would do well to wait for the decisive crossover of above mentioned range for taking a fresh call on Nifty.

Also in focus would be US nonfarm payroll data for February where addition of 190,000 jobs is expected.