NIFTY RETREATS AFTER ACHIEVING 11760 TARGET; 11600 IS THE IMMEDIATE SUPPORT

NIFTY RETREATS AFTER ACHIEVING 11760 TARGET; 11600 IS THE IMMEDIATE SUPPORT

WORLD MARKETS

Dow and S & P 500 rose 0.2% each while Nasdaq gained 0.6%, cheering a nearing trade deal between the U.S. and China. However, weaker-than-expected economic data kept gains in check.

The ISM non-manufacturing index dipped to 56.1 last month, its softest read since August 2017. Private payrolls increased by 129,000 in March, well below estimate of 173,000.

WTI crude settled 12 cents lower at $62.46 a barrel and Brent eased 6 cents to $69.31. Data from the Energy Information Administration showed U.S. commercial crude inventories surged by 7.2 million barrels in the week through March 29.

European markets gained 0.4%-1.7% with DAX on the top. IHS Markit’s Euro Zone Composite Final PMI — widely seen as an indicator of overall economic health — stood at 51.6 in March, down from 51.9 in February. U.K. Prime Minister Theresa May has said she will ask the EU for an extension to the Brexit deadline in order to “break the logjam” in Parliament.

AT HOME

After opening higher, benchmark indices nosedived nearly a percent from the top of the day to end with cuts of about half a percent. This was the first red day after four consecutive up days. Sensex settled at 38877, down 180 points while Nifty lost 69 points to finish at 11644. BSE mid-cap and small-cap indices fell 0.8% and 0.9% respectively. All the BSE sectoral indices ended in red with Oil & Gas and Telecom indices leading the losses, down 2.1% and 1.6% respectively.

FIIs net sold stocks worth Rs 1040 cr but net bought index futures and stock futures worth Rs 92 cr and 1356 cr respectively. DIIs were net sellers to the tune of Rs 81 cr.

Rupee appreciated 32 paise to end at 68.42/$.

OUTLOOK

Today morning, Hang Seng is flat while Nikkei and Shanghai are up 0.2% and 0.5% respectively. SGX Nifty is suggesting a marginally higher start for our market.

At the risk of repeating, we had been working with the target of 11760 after Nifty took out 11572 hurdle.

The benchmark yesterday touched a high of 11761, achieving this target and vindicating our view. From there, it slipped sharply to end at 11644 and is set to open around 11650 today.

11600 continues to be immediate support, a breach of which will generate a "sell" on the hourly chart and would pave the way for further correction. 11480 and 11460, the 61.8% and 67% retracement levels of the recent 11311-11761 upmove, would be the next support levels to eye if that happens.

11760 continues to be important immediate hurdle, a crossover of which is required for a fresh upmove.

RBI's monetary policy committee will deliver it's first policy decision of the new fiscal today. A 25 bps repo rate cut is widely expected while the street is divided on whether the MPC will change its stance from "Neutral" to "Accomodative".