NIFTY EXTENDS VOLATILE CONSOLIDATION

NIFTY EXTENDS VOLATILE CONSOLIDATION

WORLD MARKETS

US indices soared 3.8%-4.5% as major victories for former Vice President Joe Biden during Super Tuesday sparked a massive rally within the health-care sector and economic data boosted sentiment.

Biden scored key primary victories in states including North Carolina, Texas and Arkansas, increasing his odds of being the Democratic Party’s presidential nominee. Many investors applaud Biden for his middle-of-the-road tack in contrast to other candidates in the Presidential race including Sanders.

U.S. services sector expanded at a faster-than-expected pace in February while private payrolls jumped by 183,000 last month, topping expectations. Lawmakers also struck a deal on more than $8 billion in emergency coronavirus funding.

The Fed’s “Beige Book” report on Wednesday showed the U.S. economic activity expanded at a “modest to moderate” rate over the past week, citing coronavirus as a risk to the outlook.

WTI crude fell 40 cents, or 0.8%, to settle at $46.78 per barrel while Brent crude was unchanged at $51.86 per barrel.

European markets gained 0.9%-1.4%. The final composite PMI for the euro zone came in at 51.6 in February, but the underlying surveys showed export demand falling and disruptions to supply chains beginning to take effect.

The International Monetary Fund (IMF) also announced a $50 billion aid package on Wednesday to combat the impact of the coronavirus.

AT HOME

It was a day of volatile consolidation as benchmark indices ended lower by nearly half a percent after oscillating in a 2.5% intraday range. Sensex settled at 38409, down 214 points while Nifty lost 52 points to finish at 11251. BSE mid-cap and small-cap indices fell 1.6% each. Except 0.8% and 0.4% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Bankex and Realty indices leading the losses, down 2.9% and 2.6% respectively.

FIIs net sold stocks and index futures worth Rs 878 cr and 1554 cr respectively but net bought stock futures worth Rs 583 cr. DIIs were net buyers to the tune of Rs 764 cr.

Rupee appreciated 5 paise to end at 73.20/$.

India February Services PMI jumped to 57.5 from 55.5, hitting its highest level since January 2013 and Composite PMI rose to 57.6 from 56.3.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.1% while SGX Nifty is suggesting a marginally lower start for our market.

In yesterday's report we had reiterated the view that 10975, where 34-month moving average is placed, continues to be crucial support while 11537, which is the upper end of the gap created by Friday's gap down opening, continues to be immediate upside hurdle.

Nifty, after touching a low of 11082, rebounded to end at 11251 and is set to open with modest cuts today.

11537, the upper end of the gap created by Friday's gap down opening, continues to be immediate upside hurdle. 10975, where 34-month moving average is placed, continues to be crucial support.