NIFTY REBOUNDS FROM IMPORTANT SUPPORT; 14900 IS IMMEDIATE HURDLE

 

NIFTY REBOUNDS FROM IMPORTANT SUPPORT; 14900 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

On Friday, Dow and S & P 500 fell 0.7% and 0.1% respectively while Nasdaq rose 0.8% after the Federal Reserve’s decision to not extend a pandemic-era capital break for banks stoked a rise in bond yields and a sell-off in financial stocks.

 

The measure allowed banks to hold less capital against treasuries and other holdings and was implemented to calm the bond market during the crisis and encourage banks to lend. The yield on the benchmark 10-year Treasury note rose to 1.732% while that on the 30-year bond rose to 2.451%.

 

Brent crude settled 2% higher at $64.53 per barrel while WTI crude rose 2.4% to settle at $61.42 per barrel.

 

Spot gold rose 0.3% to $1,742.14 per ounce.

 

In Europe, FTSE, CAC and DAX, all fell a percent each. France imposed a new four-week lockdown from Friday in 16 regions badly hit by the health crisis. Meanwhile, many European countries, including Germany and France resumed the rollout of the AstraZeneca-University of Oxford Covid-19 vaccine, after British and European medicines regulators recommended it continue to be used following concerns over a small number of recipients developing blood clots. On the data front, British consumer sentiment notched a one-year high in March, according to a GfK survey.

 

For the week, Dow and the S&P 500 lost 0.5% and 0.8% respectively, breaking their two-week win streak. Nasdaq declined 0.8%, posting its fourth negative week in five. In Europe, FTSE and CAC fell 0.8% each while DAX rose 0.8%. In Asia, Nifty and Shanghai slipped 1.9% and 1.4% respectively whereas Hang Seng and Nikkei were up 0.9% and 0.2% respectively.

 

WTI crude oil plunged 6.3% for the week on the back of a stronger dollar, a further increase in U.S. crude and fuel inventories and a slowdown in some vaccination programmes and the prospect of more restrictions to control the coronavirus. Gold rose 1.1% to $1745 an ounce. Dollar index climbed 0.6%.

 

AT HOME

 

After falling nearly a percent and half in the initial trade, benchmark indices soared more than 2.5% from the bottom of the day to end higher by 1.3% each, snapping 5-day losing streak. Sensex settled at 49858, up 641 points while Nifty added 186 points to finish at 14744. Nifty mid-cap and small-cap indices rose 1.2% and 0.7% respectively. Except 0.6% and 0.05% lower Realty and Capital Goods indices respectively, all the BSE sectoral indices ended in green, with Power and Utilities indices leading the tally, up 3.2% and 3% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1418 cr, 1507 cr and 1496 cr respectively. DIIs were net buyers to the tune of Rs 560 cr.

 

Rupee appreciated 2 paise to close at 72.51/$.

 

For the week, Sensex and Nifty lost 1.8% and 1.9% respectively, snapping two-week winning streak.

 

OUTLOOK

 

Today morning, Nikkei is down nearly 2% while Hang Seng and Shanghai are up 0.2% and 1% respectively. SGX Nifty is suggesting a flattish start for our market.

 

At the risk of repeating, we had turned our view on Nifty negative after 15060 was breached and have been advising holding on to short positions with a trailing stop-loss.

 

In Friday's report we had said that 14467, the bottom made on 26th February was the immediate support below which, 14336, the lower end of the gap created by gap-up opening on 2nd February, would be the next downside level to eye.

 

Nifty, after touching a low of 14350, rebounded to end at 14744.

 

14350, the bottom made Friday, coincides with the lower end of the gap created by gap-up opening on 2nd February (the day following the union budget day) along with the trendline adjoining bottoms made in May and September 2020. This makes 14350 an important immediate support.

 

On the way up, 14870-14900 is the immediate resistance zone on the hourly chart, upon crossover of which, 15051 and 15336, the tops made last week and the week before that respectively, will be the next upside targets to eye.

 

Meanwhile, trading shorts can be held on to with the stop-loss of 14900.