NIFTY REBOUNDS FROM 8800 SUPPORT; 9390 CONTINUES TO BE NEXT UPSIDE TARGET

NIFTY REBOUNDS FROM 8800 SUPPORT; 9390 CONTINUES TO BE NEXT UPSIDE TARGET

WORLD MARKETS

Dow and S & P 500 rose 0.1% and 0.6% respectively while Nasdaq climbed 1.7% as dismal economic data was overshadowed by gains in technology and healthcare stocks and optimism that Covid-19 infections may soon begin to slow in the United States.

More than 5.2 million Americans filed first-time jobless claims during the week ending April 11, bringing the total number of U.S. job losses during the coronavirus crisis up to 22 million.

President Donald Trump said that “our experts say the curve has flattened and the peak … is behind us.” He also issued guidelines to open up parts of the U.S.

WTI crude settled unchanged at $19.87 per barrel while Brent rose 13 cents to $27.82 per barrel.

In Europe, FTSE and DAX rose 0.6% and 0.2% respectively while CAC fell 0.1%. Euro zone industrial production dipped by 0.1% month-on-month and 1.9% year-on-year in February.

AT HOME

After falling more than a percent in the initial trade, benchmark indices saw a sustained northward move through the session to end higher by three fourth of a percent, breaking two-day losing streak. Sensex settled at 30602, up 222 points while Nifty added 67 points to finish at 8992. BSE mid-cap and small-cap indices gained 1.4% and 1.7% respectively. BSE Power and Utilities indices rose 2.8% each, becoming top gainers among the sectoral indices while IT index was the top loser, down 1.8%, followed by 1.7% lower Teck and Telecom indices.

FIIs net sold stocks worth Rs 2920 cr but net bought index futures and stock futures worth Rs 360 cr and 644 cr respectively. DIIs were net buyers to the tune of Rs 1321 cr.

Rupee depreciated 42 paise to end at 76.86/$, hitting fresh record low.

TCS results were a mixed bag as revenues missed estimate while margin was better than estimates. The management said that future is challenging but it expects to get back to original trajectory from Q3 FY21. The company also maintained original margin guidance of 26-28%.

OUTLOOK

Today morning, US futures are up 2%-3.5% and Asian markets are trading with gains of 0.7%-3% on news that a Gilead Sciences drug in the US was showing effectiveness in treating the coronavirus. Better-than-expected economic data from China is also aiding sentiment. China Q1 GDP data is showing contraction of 6.8% y-o-y, which is better than the expected fall of 8.3%. March industrial output is down 1.1% y-o-y as against expectation of  7.5 fall. SGX Nifty is suggesting more than 200 points higher start for our market.

At the risk of repeating, we had advised going long on Nifty after 8678 hurdle was taken out on 7th April and have been advising holding on to long positions with a trailing stop-loss.

In yesterday's report we had said that the immediate support on the hourly chart had moved higher to 8800, with the stop-loss of which, trading longs can be held on to.

Nifty, after touching a low of 8821 in the initial trade, rebounded smartly to end at 8992 and is set to open near 9200 today.

9390, the the 38.2% retracement level of the entire 12430-7511 fall, continues to be  next target/ resistance to eye. Above 9390, 34-DMA, placed around 9500, would be the next important target/resistance.

8800 continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

RBI governor will address the media at 10 am today.