NIFTY TAKES OUT 34-DMA HURDLE; 10420 NEXT

NIFTY TAKES OUT 34-DMA HURDLE; 10420 NEXT

WORLD MARKETS

US indices gained 0.5%-1%, extending previous days mammoth rebound and stretching winning streak to third straight day, on easing trade war fears.

Weekly jobless claims totaled 242,000, more than the expected 225,000.

European markets surged 2.4%-2.9%. German new manufacturing orders came in lower than expected, seeing a rise of 0.3% on the previous month.

AT HOME

After opening with a gap up on the back of positive global cues, benchmark indices got additional boost from dovish monetary policy which helped them close with mammoth gains of just under 2%. Sensex soared 577 points to settle at 33596 while Nifty finished 196 points higher at 10325. BSE mid-cap and small-cap indices gained 1.9% each. All the BSE sectoral indices ended in green with Metal and Basic Material indices leading the tally, up 4.1% and 3.2% respectively.

FIIs net sold stocks worth Rs 108 cr but net bought index futures and stock futures worth Rs 1195 cr and 1379 cr respectively. DIIs were net buyers to the tune of Rs 615 cr.

Rupee appreciated 19 paise to end at 64.96/.

While Monetary Policy Committee kept key rates unchanged and maintained its stance neutral, it unexpectedly cut the inflation forecast for first half to 4.7%-5.1% from 5.1%-5.6% and for second half to 4.4% from 4.5%-4.6%. It however noted that there are upside risks to its inflation forecast. MPC sees FY19 real GDP growth at 7.4%, up from 6.6% in FY18.

The 10-year bond yield ended at 7.127%, down 16.60 basis points compared to its previous close of 7.294%

India's Nikkei services PMI improved from 47.8 in February to 50.3 in March. Composite PMI rose from 49.7 in February to 50.8 in March.

OUTLOOK

Trump said late on Thursday during U.S. hours that he has told U.S. trade officials to consider $100 billion in extra tariffs against China adding that the move would be appropriate given China's "unfair retaliation," although he left the door open for negotiation.

US futures are down about 1.5% on these comments. Shanghai is shut today while Hang Seng is up nearly a percent but Nikkei is a tad lower. SGX Nifty is suggesting about 30 points lower start for our market.

Nifty yesterday soared 196 points to close at 10325, taking out the 34-DMA resistance placed around 10310. 10420, the 38.2% retracement level of the entire 11171-9951 fall, is the next upside target to eye. 10200 is the immediate support on the hourly chart, with the stop-loss of which, existing longs should be held on to.

US March nonfarm payrolls data will be out today and is expected to show an addition of 193,000 jobs.