10915, 10942 ARE THE UPSIDE TARGETS/HURDLES; 10729 IMMEDIATE SUPPORT

10915, 10942 ARE THE UPSIDE TARGETS/HURDLES; 10729 IMMEDIATE SUPPORT

WORLD MARKETS

US indices fell 0.1% each after digesting the release of weaker-than-expected Home Depot earnings, mixed economic data and testimony from the top-ranked Federal Reserve official.

Housing starts fell 11.2% in December and reached their lowest level since September 2016. The S&P Case-Shiller index showed home prices rose in December at their slowest pace since August 2015.  On the flip side, Conference Board's consumer confidence index surged to 131.4 in February, easily topping an estimate of 124 and January reading of 121.7.

Fed Chair Powell delivered his testimony to a U.S. Senate committee, where he noted the U.S. economic outlook was "generally favorable" but warned of headwinds from overseas.

US crude rose 2 cents to $55.50 a barrel while Brent rose 45 cents to $65.21.

European markets, except 0.4% lower FTSE, gained 0.1%-0.3%. In UK, May confirmed that lawmakers will be able to vote on her Brexit deal a second time by March 12. If that fails, Parliament will vote on ruling out a no-deal by March 13; and then a possible vote to extend Article 50 by March 14. Sterling rose 0.6% against the dollar as the possibility of a no-deal Brexit was reduced slightly.

AT HOME

After falling nearly a percent and half in the initial trade on the news of airstrike by India on Jaish-E-Mohammed camps, Sensex and Nifty recouped more than half of the losses through the session to end lower by 0.7% and 0.4% respectively. Snesex settled at 35973, down 240 points while Nifty lost 44 points to finish at 10835. BSE mid-cap and small-cap indices fell 0.3% and 0.5% respectively. BSE Realty index tumbled 1.6%, becoming top loser among the sectoral indices, followed by 1% lower Finance index. BSE Auto and Oil & Gas indices were the top gainers, up 0.3% and 0.2% respectively.

FIIs net bought stocks and stock futures worth Rs 1674 and 562 cr respectively but net sold index futures worth Rs 698 cr. DIIs were net sellers to the tune of Rs 720 cr.

Rupee depreciated 8 paise to end at 71.06/$.

India's April-January fiscal gap stood at 7.708 lakh cr which is 121.5% of Rs 6.344 lakh cr FY19 target.

RBI removed Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from prompt corrective action framework.

OUTLOOK

Today morning, Shanghai is flat while Hang Seng and Nikkei are up 0.2% and 0.4% respectively. SGX Nifty is suggesting about 40 points higher start for our market.

In yesterday's report we had said that immediate support on the hourly chart had moved up to 10750, which should serve as the stop-loss for trading longs.

Nifty, after a gap down opening, touched a low of 10729, but did not sustain there and rebounded smartly to 10888 before closing at 10835 and is set to open around yesterday's high.

10915 followed by 10942, which are 61.8% and 67% retracement levels of the entire 11118-10585 fall respectively, continue to be upside targets/hurdles to eye.

10729, the low made yesterday, is the immediate support below which 10585, the low made last week, would be the crucial support to eye.