NIFTY SET TO ACHIEVE 16200; TRAIL STOP-LOSS TO 16850

 

NIFTY SET TO ACHIEVE 16200; TRAIL STOP-LOSS TO 16850

 

WORLD MARKETS

 

On Friday, US indices fell 0.3%-1.4% as renewed rise in treasury yield weighed on the sentiment.

 

Nonfarm payrolls grew by 428,000 for April, coming in ahead of estimates of 400,000. The unemployment rate was expected to fall to 3.5% but stood at 3.6% and average hourly earnings slowed down a little bit. Consumer Crdit showed a rise of $52.4 billion in March, more than double what economists expected.

 

US 10-year treasury yield jumped nearly 10 bps to 3.136%. Dollar index inched up 0.1% to 103.66. Gold inched up a third of a percent to $1883 per ounce.

 

Oil prices climbed for a third straight session. Brent futures rose 1.75%, or $1.94, to $112.83 per barrel, while WTI crude advanced 1.83% to $110.24 per barrel.

 

European markets fell 1.2%-1.7%.

 

Dow finished down 0.24% for its sixth consecutive negative week. The S&P 500 and Nasdaq finished with losses of 0.21% and 1.54% respectively, for their fifth straight losing week. Main European markets fell between 2.1%-4.2%. Asian markets, except a flat Nikkei, slipped 1.4%-5.1% with Hang Seng leading the losses.

 

In other asset classes, US 10-year treasury yield jumped 6.7% week-on-week to 3.136%. Dollar index rose 0.4% for its fifth consecutive up week. Gold fell 0.7% for its third consecutive weekly loss. Oil prices surged, shrugging off concerns about global economic growth as impending European Union sanctions on Russian oil raised the prospect of tighter supply. Brent and WTI both rose 6.1% each to $113 and $110.50 per barrel respectively.

 

AT HOME

 

Benchmark indices nosedived 1.6% each, closing in red for the fourth session in last five and closing at the lowest level after 9th March. Sensex settled at 54835, down 866 points while Nifty lost 271 points to finish at 16411. Nifty mid-cap and small-cap indices tumbled 1.8% and 2.5% respectively. Except 0.6% each higher Power and Utilities indices, all the BSE sectoral indices ended in red, with Realty and Basic Materials indices leading the losses, down 3.5% and 2.8% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 5517 cr, 2490 cr and 268 cr respectively. DIIs were net buyers to the tune of Rs 3015 cr.

 

Rupee depreciated 66 paise to end at 76.91/$.

 

For the week, Sensex and Nifty nosedived 3.9% and 4% respectively, extending the losing streak to fourth consecutive week and suffering the biggest weekly cut after the week ended 26th November 2021.

 

OUTLOOK

 

Hang Seng is shut today while Nikkei is down 2% and Shanghai is up 0.3%. SGX Nifty is suggesting nearly 200 points lower start for our market.

 

In Friday's reprot we had said that 16200, the 78.6% retracement level of 15671-18115 upmove, was the next downside level to eye and had advised trailing stop-loss in short positions to 17000.

 

Nifty, after touching a low of 16340, closed at 16411 and is set to open below 16250 today.

 

16200, the 78.6% retracement level of the entire 15671-18115 upmove, continues to be next support to eye, upon breach of which, next meaningful support will come only at 15671, the bottom made in March.

 

Immediate support, after today's gap-down, would move lower to 16850, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 33570, the 78.6% retracement level of the 32155-38765 upmove, is the next downside level to eye; 35600 is immediate hurdle.