17400 CONTINUES TO BE IMMEDIATE SUPPORT

 

17400 CONTINUES TO BE IMMEDIATE SUPPORT

 

WORLD MARKETS

 

US indices nosedived 1.4%-3.7%, with Nasdaq Composite posting its worst day after September 2020 as a disappointing earnings report from Facebook parent Meta sent the mega-cap tech stock lower. The S&P 500 had its worst day in nearly a year.

 

U.S. jobless claims came in at 238,000 last week, slightly fewer than the 245000 estimate.

 

US 10-year treasury yield rose nearly 4 bps to 1.83%. Dollar index tumbled two third of a percent to 95.35, extending the losing streak to fourth straight day. Gold inched marginally lower to $1804 per ounce.

 

In after-hours trade, several technology stocks, including Amazon, Pinterest and Snap, posted huge gains following strong quarterly results.

 

WTI crude gained more than 2% to trade as high as $90.23 per barrel and hit highest level since October 2014. Brent crude rose 1.7% to trade at $91.

 

European markets fell 0.7%-1.8%.  The Bank of England raised interest rates by 25 bps to 0.5% — the first back-to-back rate hike since 2004 — and began the process of quantitative tightening. The central bank also warned inflation would top 7% in April, up from an earlier projection of 6%. European Central Bank on the other hand opted to hold interest rates steady, defying growing pressure to curb stimulus plans. Meanwhile, inflation in the euro zone rose to 5.1% in January, as against expectations for a sharp drop to 4.4%.

 

AT HOME

 

Sensex and Nifty plunged 1.3% and 1.24% respectively, snapping 3-day winning streak. Sensex lost 770 points to settle at 58788 while Nifty finished at 17560, down 220 points. Nifty mid-cap and small-cap indices fell 1% and 0.3% respectively. Except 0.4% and 0.3% higher Auto and Consumer Durables indices, all the BSE sectoral indices ended in red with IT and Teck indices falling the most, down 2% and 1.8% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 1598 cr, 1185 cr and 1287 cr respectively. DIIs were net sellers to the tune of Rs 371 cr.

 

Rupee depreciated 2 paise to end at 74.86/$.

 

India’s January Services PMI fell to 51.5 from 55.5 month-on-month while Composite PMI fell to 53 from 56.4.

 

OUTLOOK

 

Hang Seng has opened 1.6% higher after holidays while Shanghai continues to be shut. Nikkei is half a percent lower. SGX Nifty is suggesting around 15 points higher start for our market.

 

In yesterday's report we had said that 17850 was the next upside levels to eye and had advised trailing stop-loss in long positions to 17400.

 

Nifty plunged all the way to 17511 before closing at 17560.

 

17850, the 67% retracement level of the 18350-16836 fall, continues to be next upside level to eye; 17400 continues to be immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

40160 continues to be next upside level for Banknifty; Immediate support on the hourly chart has moved up to 38500, with the stop-loss of which, trading longs can be held on to.

 

Tata Steel will report its quarterly earnings today.