NIFTY MAKES A NEW RECORD; 8970 IS THE IMMEDIATE SUPPORT

NIFTY MAKES A NEW RECORD; 8970 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices lost 0.2%-0.3% yesterday amid fall in energy stocks and awaiting Fed decision.

U.S. oil hit a fresh three-month low before settling 69 cents lower at $47.72 a barrel after OPEC said oil inventories had continued to rise and Saudi Arabia surprisingly self-reported a jump in production, despite the start of a global deal to cut supply.

US Producer Price Index (PPI) rose 0.3% last month. In the 12 months through February, the PPI jumped 2.2%, the biggest advance since March 2012 and ahead of the 2% gain forecast. The National Federation of Independent Business (NFIB) said its small business optimism index fell 0.6 points to 105.3 last month.

European markets ended with cuts of upto 0.9%. Eurozone industrial production rose 0.9% in January from its previous month, lower than the expected 1.4% rise.

AT HOME

After a big gap-up opening, benchmark indices traded in a narrow range through the session to end higher by 1.7% each with Nifty hitting a record intraday as well as closing high. Sensex settled at 29443, up 496 points while Nifty finished at 9087, up 152 points. BSE mid-cap and small-cap indices gained 1.4% and 1.2% respectively. Except a 0.6% and 0.3% cut in BSE Telecom and Metal indices respectively, all the BSE sectoral indices ended in green with Capital Goods and Realty indices leading the tally, up 3.1% and 2.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 4088 cr, 1837 cr and 499 cr respectively. DIIs were net sellers to the tune of Rs 1520 cr.

Rupee appreciated 76 paise to end at 65.9650/$.

Inflation based on wholesale price shot up to 39-month high of 6.55% in February because of costlier food and fuel items. Retail inflation, measured by CPI, rose to 3.65% from 3.17%.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.6% and SGX Nifty is suggesting a marginally higher start for our market.

Nifty yesterday opened with a big gap and touched a high of 9123, crossing the 9119 top made in March 2015, but witnessed some profit booking and finally settled at 9087.

We had said in yesterday's report that a small phase of consolidation, after a big gap up opening cannot be ruled out but the a decisive crossover of 8970 would mark a major breakout from a two-year consolidation, major target of which comes to 10000.

That continues to be the view.

Meanwhile, 8970, the erstwhile resistance, would now act as the support, with the stop-loss of which trading longs can be held on to.

The Federal Open Market Committee kicked off its two-day meeting Tuesday and is expected to announce a rate increase at the meeting's Wednesday afternoon conclusion. The focus however would be on how many more rate hikes are projected in rest of the year.