10638-10398 IS THE IMMEDIATE RANGE

10638-10398 IS THE IMMEDIATE RANGE

WORLD MARKETS

US indices gained 0.2%-0.4%, extending the winning streak to third straight day.

Treasury yields slipped from Monday's four-year highs to trade at 2.831% ahead of the release of heavily anticipated U.S. inflation data on Wednesday.

Dollar index fell about half a percent to 89.73.

European markets fell 0.1%-1.4% with Italy leading the losses.

US oil fell 10 cents to settle at $59.19.

AT HOME

Benchmark indices ended with gains of about eight tenth of a percent after a choppy trade. Sensex added 295 points to settle at 34300 while Nifty finished at 10540, up 85 points. BSE mid-cap and small-cap indices surged 1.3% and 1.6% respectively, extending their outperformance. Except 0.4% and 0.3% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Power and Realty indices leading the tally, up 1.9% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 814 cr and 1481 cr respectively but net bought stock futures worth Rs 38 cr. DIIs were net buyers to the tune of Rs 1343 cr.

Rupee appreciated 8 paise to end at 64.32/$.

CPI, a measure of retail inflation, fell to 5.07% in January, from 5.21% in December. IIP, a measure of factory output, stood at 7.1% in December as compared to 8.8% in November.

The Reserve Bank of India has released a new overarching framework for bad loan resolution, to be used across the Indian banking sector. The new rules put an end to a series of stressed asset schemes which had been introduced over the past few years. Instead, a strict 180-day timeline has been prescribed over which banks must agree on a resolution plan. And if they fail to do so, large stressed accounts must be immediately referred for resolution under the Insolvency and Bankruptcy Code (IBC).

OUTLOOK

Today morning, except a marginally lower Nikkei, other Asian markets are trading with gains of 0.3%-1%. SGX Nifty is trading around 10550, suggesting a marginally higher start as compared to Monday's close of Nifty futures.

Last week, Nifty, after making a bottom of 10276 on Tuesday, rebounded to touch a high of 10638 on Thursday and has been in a consolidation mode for last two days.

10638 is the immediate hurdle, above which 10725, the 50% retracement level of the recent 11171-10276 fall, would be the next target to eye. On the way down, 10398, the bottom made on Friday, is the immediate support below which 10276 would be the crucial support to eye.