NIFTY TESTS 8880 SUPPORT; TRUMP SPEECH IN FOCUS

NIFTY TESTS 8880 SUPPORT ; TRUMP SPEECH IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 fell 0.1% and 0.3% respectively while Nasdaq tumbled 0.6%, with the Dow snapping a 12-day winning streak, awaiting a speech from President Trump at a joint Congress session for any clues or details regarding the administration's plans on tax reform and deregulation.

The second read on fourth-quarter U.S. GDP remained unchanged, but consumer spending was revised sharply higher to 3% from 2.5%. S&P/Case-Shiller U.S. National Home Price Index showed home prices rose 5.8% in December, up from November's 5.6% annual gain on the back of low inventory and mortgage rates. Consumer confidence for February hit its highest level since July 2001.

New York Fed President William Dudley said that the "case for monetary tightening has become more compelling.

The benchmark 10-year note yield traded near 2.39%. Dollar index gained about 0.2% to 101.37.

Main European markets ended with modest gains.

AT HOME

Repeating Monday's pattern, benchmark indices, after a flattish start, saw a sustained downward move through the session to end with modest cuts. Sensex lost 70 points to settle at 28743 while Nifty finished at 8880, down 17 points. BSE mid-cap and small-cap indices however again managed to close in green, putting on 0.1% and 0.6% respectively. BSE Oil & Gas and Energy indices tumbled 1.3% and 1% respectively, becoming top losers among the sectoral indices while Telecom and Realty indices were the top gainers, putting 1.7% and 1.4% respectively.

FIIs net bought stocks and stock futures worth Rs 1146 cr and 216 cr respectively but net sold index futures worth Rs 62 cr. DIIs were net buyers to the tune of Rs 268 cr.

Rupee appreciated 1 paise to end at 66.69/$.

Data released yesterday showed the Indian economy grew at a surprisingly fast 7% in October-December 2016, from 7.4% in the previous quarter and 7.2% expansion in third quarter 2015-16. The data, put out by the Central Statistics Office (CSO), also projected that Indian’s “real” or inflation-adjusted gross domestic product (GDP) will likely to grow at 7.1% in 2016-17, 0.8% points slower than the previous year’s 7.9% expansion. GVA, which is GDP minus net taxes, will slow down to 6.7% in 2016-17 or 1.1% points lower than 7.8% GVA growth in 2015-16.

OUTLOOK

China's February manufacturing PMI has come in at 51.6, up from 51.3 in January. Non-manufacturing PMI has come in at 54.2 as against 54.6. Caixin manufacturing PMI has come in at 51.7 V/S 51.

Asian markets are trading with gains of upto 0.6% and SGX Nifty is suggesting a marginally higher start for our market.

After failing to decisively cross 8970 hurdle, Nifty yesterday touched a low of 8867 before closing at 8880, which is the immediate support on the hourly chart. A breach of 8867, the low made yesterday, would confirm a sell on the hourly chart. 8800 where 20 DMA is placed, would be the immediate downside target if that happens, followed by 8710, the bottom made in mid-February.

Traders can go short on Nifty below 8867, keeping a stop-loss of 8970.

Auto companies will report February sales data today.