US EQUITIES SUFFER WORST FALL IN 5-MONTHS; NIFTY SET TO TEST 9045 SUPPORT

US EQUITIES SUFFER WORST FALL IN 5-MONTHS; NIFTY SET TO TEST 9045 SUPPORT

WORLD MARKETS                             

US indices plunged 1.1%-1.8%, posting their first 1% plus fall in 5 months as concerns over the fate of a healthcare reform bill weighed, banks struggled with falling yields and oil resumed decline.

House Republicans are expected to vote on repealing and replacing the Affordable Care Act on Thursday with the votes needed for passage in doubt. The Freedom Caucus, a key group of House Republicans, threatened to issue a formal statement of opposition to the Obamacare replacement bill, which would delay the vote, unless the language in the bill changes dramatically.

U.S. Treasury yields traded mixed, with the benchmark 10-year note yield holding around 2.42% and the short-term two-year note yield trading around 1.26%. Dollar index fell more than half a percent to 99.70. Gold gained little less than 1% to $1245 an ounce.

Retail stocks took a hit after Kevin Brady, the Republicans' chief tax writer in the House said that a border adjustment tax will probably appear in the final tax reform plan

Cleveland Federal Reserve President Loretta Mester said that if economic data holds up she would support a reduction in the Fed's $4.5 trillion balance sheet.

The American Petroleum Institute reported a 4.53 million barrels build in crude stocks at the end of last week, nearly double the expected gain. WTI crude fell 1.8% to $47.34 a barrel, its lowest since Nov. 29. Brent dropped 1.3% to $50.96.

European markets fell upto 0.8%. Basic resources stocks were the worst performers amid a slide in metal prices. U.K. inflation jumped to 2.3% in February, up from 1.8% in January.  

AT HOME

After a positive start, benchmark indices tumbled two third of a percent from the top of the day but recouped most of the losses in late noon trade to end just marginally lower. Sensex settled at 29485, down 33 points while Nifty lost 5 points to finish at 9121. BSE mid-cap and small-cap indices lost 0.4% and 0.2% respectively. BSE Healthcare index tumbled 1.4%, becoming top loser among the sectoral indices, followed by 0.6% cut in Telecom index and Bankex. Realty and FMCG indices were the top gainers, up 1.4% and 1% respectively.

FIIs net bought stocks worth Rs 1663 cr but net sold index futures and stock futures worth Rs 26 cr and 2391 cr respectively. DIIs were net sellers to the tune of Rs 799 cr.

Rupee appreciated 12 paise to end at 65.3075/$, it's highest in 17 months.

Dr Reddy plunged 4.6% on news that 13 observations it received from the US Food and Drug Administration on March 18 contained repeats from a 2015 warning letter.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-1.7% with Nikkei leading the losses and SGX Nifty is suggesting about 60 points lower start for our market.

After today's gap down opening, Nifty would be close to 9045, the level which we have been mentioning as the immediate support on the hourly chart. A breach of 9045 would generate a sell on the hourly chart and next downside target to eye in that case would be 8970, which earlier acted as a hurdle.

Traders are advised to keep stop-loss of 9045 in longs.