14652-14785 IS THE RESISTANCE ZONE

 

14652-14785 IS THE RESISTANCE ZONE

 

WORLD MARKETS

 

On Tuesday, Dow fell 0.2% while S & P 500 and Nasdaq rose 0.3% and 1% respectively, after digesting March inflation report and news of a halt to the rollout of Johnson & Johnson vaccine.

 

U.S. FDA said it’s recommending a pause in the Johnson & Johnson Covid-19 vaccine after reported cases of blood clotting.

 

US consumer price index, rose 0.6% in March and increased 2.6% from the same period a year ago, slightly higher than expected figures of 0.5% and 2.5% respectively.

 

Yesterday, Dow rose 0.2% while S & P 500 and Nasdaq fell 0.4% and 1% respectively as pressure on tech offset optimism sparked by the first round of major corporate earnings that largely exceeded expectations.

 

Goldman Sachs rose 2% after blowing past analysts’ expectations with record first-quarter net profits and revenues. JPMorgan Chase also topped forecasts on the top and bottom lines.

 

Fed Chair Powell said the central bank will reduce its monthly bond purchases before it commits to an interest rate increase.

 

The yield on the benchmark 10-year Treasury note rose less than 1 basis point to 1.63%. Spot gold fell 0.5% to $1,736 per ounce.

 

Brent crude surged $2.91, or 4.6%, to $66.58 per barrel while WTI crude futures settled $2.97, or 4.94%, higher at $63.15 per barrel after a report from the International Energy Agency, followed by U.S. inventory data boosted optimism about returning demand for crude. U.S. crude inventories fell by 5.9 million barrels last week, exceeding forecasts for a 2.9 million-barrel drop. A report from International Energy Agency predicted global oil demand and supply were set to rebalance in the second half of the year and added that producers may then need to pump an additional 2 million bpd to meet the expected demand. The Organization of the Petroleum Exporting Countries on Tuesday raised its global demand forecast by 70,000 bpd from last month’s forecast and now expects global demand to rise by 5.95 million bpd in 2021.

 

In Europe, FTSE and CAC rose 0.7% and 0.4% respectively while DAX fell 0.2%. the European Commission announced a new deal with Pfizer and BioNTech to deliver 50 million additional doses of their shot in the second quarter. Euro zone industrial production fell 1% in February from the previous month, as against expectation of a 1.1% decline.

 

AT HOME

 

Benchmark indices surged 1.4% each, recouping nearly 40% of yesterday's mammoth losses. Sensex added 660 points to settle at 48544 while Nifty finished at 14504, up 194 points. Nifty mid-cap and small-cap indices rose 1.7% and 1.3% respectively. Except 2.6% and 2% lower IT and Teck indices respectively, all the BSE sectoral indices ended higher, with Auto and Metal indices leading the tally, up 4.3% and 3.5% respectively.

 

FIIs net sold stocks worth Rs 731 cr but net bought index futures and stock futures worth Rs 1995 cr and 1304 cr respectively. DIIs were net buyers to the tune of Rs 244 cr.

 

OUTLOOK

 

Today morning, Nikkei is up 0.3% while Hang Seng and Shanghai are down 0.5% and 0.8% respectively. SGX Nifty is trading Around 14650, suggesting around 100 points higher start when compared to Tuesday's close of Nifty futures.

 

In Tuesday's report we had said that 14248, the low made Monday, coincided with the downward sloping trnedline adjoining bottoms made on 26th February and 19th March and also roughly coincided with the 14264 bottom made in March making it an immediate support. We had also said that 14652-14785, the gap created by Monday's gap-down opening, would act as the resistance zone.

 

Nifty surged to touch a high of 14529 before closing at 14504. The benchmark is set to open near 14600 today.

 

14652-14785, the gap created by Monday's gap-down opening, continues to be resistance zone to eye.

 

14248, the bottom made Monday, continues to be important immediate support.