17400 CONTINUES TO BE IMMEDIATE SUPPORT

 

17400 CONTINUES TO BE IMMEDIATE SUPPORT

 

WORLD MARKETS

 

Dow ended marginally in the red while S & P 500 and Nasdaq rose 0.5% and 1.6% respectively on Friday as continued strength in earnings reports extended the tech-led rebound. Markets also weighed a much stronger-than-expected jobs report and its potential impact on U.S. monetary policy going forward.

 

Amazon jumped 13.5% on strong quarterly earnings and cloud revenue beats. Snap soared 59% and Pinterest rose 11.2%.

 

US economy added 476,000 jobs in January, much higher than the expected 150,000. Average hourly earnings also rose 0.7% last month, and 5.7% on a y-o-y basis.

 

US 10-year treasury yield jumped 9 bps to 1.918% and hit its highest level since December 2019. Dollar index inched up 0.1% to 95.48, snapping 4-day losing streak. Spot gold inched up 0.2% to $1,807.7 per ounce.

 

Brent crude climbed 2.4% to $93.27 per barrel and U.S. WTI crude settled 2.3% higher at $92.31 per barrel as geopolitical tensions and a winter storm in the US fuelled concerns over supply disruptions. Both hit seven-year highs.

 

European markets fell 0.2%-1.8%. Data showed new car sales in the U.K. last month were 23% lower than pre-pandemic levels. Eurozone retail sales fell 3% month-on-month, but gained 2% from a year earlier. German industrial orders grew 2.8% in December from a month earlier, whereas France saw its industrial output contract by 0.2% between November and December.

 

For the week, US indices gained 1.1%-2.4%, extending the winning streak to second straight week. In Europe, FTSE rose 0.7% but DAX and CAC fell 1.4% and 0.2% respectively. Asian markets gained 2.4%-4.3%. Oil extended the winning streak to seventh consecutive week mainly on supply concerns. US 10-year trreasury yield jumped 14 bps to 1.912%, hitting highest level in more than 2 years. Dollar index plunged 1.8% for its worst week since Nov. 2020

 

AT HOME

 

Benchmark indices ended lower by quarter of a percent after a choppy session, extending the losing streak to second straight day. Sensex settled at 58644, down 143 points while Nifty lost 44 points to finish at 17516. Nifty mid-cap and small-cap indices fell 0.8% and 0.9% respectively. BSE Realty index tumbled 2.8%, becoming top loser among the sectoral indices, followed by 1% lower Auto index. Metal and Basic Materials indices were the top gainers, up 1.3% and 0.5% respectively.

 

FIIs net sold stocks and stock futures worth Rs 2268 cr and 32 cr respectively but net bought index futures worth Rs 1829 cr. DIIs were net buyers to the tune of Rs 622 cr.

 

Rupee appreciated 16 paise to end at 74.69/$.

 

For the week, Sensex and Nifty gained 2.5% and 2.4% respectively, snapping 2-week losing streak.

 

OUTLOOK

 

Today morning, Shanghai, which has open after Lunar New Year holidays, is up 1.6%, while Nikkei and Hang Seng are down 0.8% and 0.5% respectively. SGX Nifty is suggesting around 60 points lower start for our market.

 

In Friday's report we had said that 17850 continued to be next upside level to eye for Nifty while 17400 continues to be immediate support on the hourly chart, with the stop-loss of which, trading longs could be held on to.

 

Nifty fell to 17462 before closing at 17516 and is set to open around Friday's low today.

 

17400 continues to be immediate support on the hourly chart upon breach of which, 17244, the low made on the budget day, would be the next level to eye.

 

17794, the top made last week, is the immediate hurdle.

 

Meanwhile, trading longs can be held on to with the stop-loss of 17400.

 

For Banknifty, 38500 is the immediate support on the hourly chart, upon breach of which, 37690, the bottom made on the budget day, would be the next downside level to eye; 39425, the top made during the week, is the immediate hurdle, upon crossover of which, 40160, the top made in November, would be the next upside target.