16824-17415 CONTINUES TO BE BROAD RANGE

 

16824-17415 CONTINUES TO BE BROAD RANGE

 

WORLD MARKETS

 

US indices nosedived 2.8%-4.2% on Friday, with Nasdaq leading the losses, weighed down by rising yields and post result plunge in tech stocks.

 

Amazon nosedived 14% — its biggest drop since 2006 — after reporting a surprise loss and issuing weak revenue guidance for the second quarter. Apple fell 3.7% after management said supply chain constraints could hinder fiscal third-quarter revenue. Intel fell 6.9% after the company issued weak guidance for its fiscal second quarter.

 

The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — rose 5.2% from a year ago.

 

US 10-year treasury yield rose 11 bps to 2.939%. Dollar index fell 0.4% to 103.21. Gold, after rising to $1920, eased to end flat at $1896 per ounce.

 

Brent crude futures settled 1.6% higher at $109.34 per barrel and WTI crude settled 0.6% lower at $104.69 per barrel.

 

European markets gained 0.5%-0.8%. Euro zone inflation hit a record high for the sixth consecutive month in April, notching an annual 7.5% following March’s 7.4% figure. Euro zone GDP grew 0.2% in the first quarter and 5% y-o-y as the war in Ukraine curtailed economic growth across the bloc. French economy was unchanged following growth of 0.8% in the final quarter of 2021.

 

For the week, US indices fell 2.5%-3.9%. In Europe, FTSE inched up 0.3% while DAX and CAC fell 0.3% and 0.7% respectively. In Asia, Hang Seng was up 2.7% while Shanghai, Nikkei and Nifty fell 1.3%, 0.7% and 0.4% respectively. Dollar index climbed 2.3% to 103.21. Gold slipped 1.8% to $1897 per ounce. WTI crude rose 2.3% while Brent inched up 0.4%.

 

For the month, Nasdaq plunged 13.3% for its worst performance since October 2008. S & P 500 lost 8.8%, its worst month since March 2020 and Dow gave away 4.9%. US 10-year treasury yield jumped 25%. Dollar index surged 5%. Yen tumbled against the dollar after the Bank of Japan (BOJ) doubled-down on its super-low yield policy by offering to buy endless amounts of bonds every session as needed.

 

AT HOME

 

After rising nearly three fourth of a percent, benchmark indices nosedived a percent and half in late noon trade to end lower by 0.8% each. Sensex lost 460 points to settle at 57060 while Nifty finished at 17102, down 142 points. Nifty mid-cap and small-cap indices fell 0.8% and 1.2% respectively. All the BSE sectoral indices ended in red, with Oil & Gas and Energy indices leading the losses, down 2.6% and 2.4% respectively.

 

FIIs net sold stocks and stock futures worth Rs 3648 cr and 358 cr respectively but net bought index futures worth Rs 441 cr. DIIs were net buyers to the tune of Rs 3490 cr.

 

Rupee appreciated 6 paise to end at 76.42/$.

 

For the week, Sensex and Nifty fell 0.2% and 0.4% respectively, extending the losing streak to third straight week.

 

Tata Motors' April sales beat estimate while that of Maruti, Hero MotoCorp and Eicher were below estimate.

 

Wipro's quarterly numbers and guidance were below market expectation while Indusind Bank reported all round improvement in performance parameters.

 

OUTLOOK

 

China's official manufacturing PMI for April declined to 47.4, a second straight month of contraction following March’s reading of 49.5. Caixin/Markit manufacturing PMI came in at 46, declining from the previous month’s reading of 48.1.

 

Markets in Hong Kong, mainland China, Singapore and Taiwan are closed today for a holiday. Nikkei is down 0.6% and SGX Nifty is suggesting more than 200 points lower start for our market.

 

In Friday's report we had said that upon crossover of 17323, 20-DMA placed around 17440 would be the next upside target and that 16950 was the immediate support, upon breach of which, 16824, would be the next downside level to eye.

 

Nifty, after touching a high of 17377, plunged to 17102 and is set to open below 17900 today.

 

16824, the low made in April, is the next support, upon breach of which,  16600 and 16200, the 61.8% and 78.6% retracement levels of the entire 15671-18115 upmove, would be next downside levels to eye; 17415, the top made last to last week, which roughly coincides with 20-DMA, is the immediate hurdle.

 

For Banknifty, 35511, the low made last week, is the immediate support, upon breach of which, 35016, the bottom made on 28th March would be the next downside level to eye; 36719, the top mad last week, is the immediate hurdle.

 

HDFC and Britannia will report their quarterly earnings today.