NIFTY NEARLY ACHIEVES 10033 TARGET; 10300 IS THE IMMEDIATE HURDLE

NIFTY NEARLY ACHIEVES 10033 TARGET; 10300 IS THE IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 0.2%-0.5% as the Federal Reserve started a two-day monetary policy meeting, with most market participants expecting a rate hike.

Dollar index gained about half a percent to settle at 90.42, a three-week high. Treasury yields rose with the benchmark 10-year note yield at 2.885% and the short-term two-year yield at 2.341%.

WTI oil surged 2.2% to $63.40/barrel, its highest levels in three weeks on concerns about Saudi-Iranian tensions and falling Venezuela output. Brent rose 2.1% to $67.41.

European markets rose 0.2%-0.7%.

AT HOME

Sensex and Nifty ended higher by 0.2% and and 0.3% respectively after a choppy trade to break four-day losing streak. Sensex settled at 32997, up 74 points while Nifty finished 30 points higher at 10124.  BSE mid-cap index gained 0.2% but small-cap index fell 0.2%. BSE IT and Teck indices climbed 1.3% and 1.2% respectively, becoming top gainers among sectoral indices while Oil & Gas and Energy indices were the top losers, down 0.8% and 0.7% respectively.

FIIs net bought stocks and stock futures worth Rs 344 cr and 797 cr respectively but net sold index futures worth Rs 1516 cr. DIIs were net buyers to the tune of Rs 731 cr.

Rupee depreciated 3 paise to end at 65.20/$.

OUTLOOK

Today, Nikkei is shut while Hang Seng and Shanghai are up 1% and 0.3% respectively. SGX Nifty is suggesting about 15 points higher start for our market.

Readers would recall that we had given downside targets of 10140 followed by 10033 after immediate support of 10270 was taken out. Nifty yesterday touched a low of 10049, nearly achieving the second target and vindicating our view.

10033, the bottom made in December 2017, from where a big, rally till 11171 happened in less than two months, continue to be important support to eye. Upon decisive breach of 10033, next meaningful support will come only around 9800, where a trendline adjoining bottoms made in February and December 2016, is placed.

On the way up, 10300 is the immediate hurdle, a crossover of which is required for a fresh upmove. 10490, the top made last week, would be the next target if that happens.

Fed, at the end of its two-day policy meeting, is widely expected to raise rates by 25 bps today. Markets will also look for clues about whether the central bank will stay on track to hike three times this year or if it expects to further tighten policy.