NIFTY SET TO TEST 20-DMA SUPPORT

 

NIFTY SET TO TEST 20-DMA SUPPORT

 

WORLD MARKETS

 

US indices fell 0.7%-1.1% as treasury yield firmed above 3% ahead of May’s consumer price index reading due on Friday.

 

Mortgage applications fell to their lowest level in more than two decades. The Atlanta Fed’s GDPNow tracker indicated an annualized gain in GDP of just 0.9% for the quarter.

 

US 10-year Treasury yield increased by 6 bps to 3.033%. Dollar index rose 0.2% to 102.54. Spot gold rose marginally higher to $1,852.25 per ounce.

 

Oil prices rose to a 13-week high. Brent futures rose $2.77, or 2.3%, to $123.34 a barrel and WTI crude rose $2.70, or 2.3%, to $122.11.

 

In Europe, FTSE eased 0.1% while DAX and CAC slipped 0.8% each.

 

AT HOME

 

Benchmark indices ended lower by four tenth of a percent each after a volatile session, extending the losing streak to fourth consecutive day. Sensex settled at 54892, down 215 points while Nifty lost 60 points to finish at 16356. Nifty mid-cap and small-cap indices fell 0.5% and 0.3% respectively. BSE Telecom index tumbled 1.6%, becoming top loser among the sectoral indices, followed by 1% lower FMCG index. Realty index was the top gainer, up 1.9%, followed by half a percent higher Metal index.

 

FIIs net sold stocks and index futures worth Rs 2484 cr and 735 cr respectively but net bought stock futures worth Rs 58 cr. DIIs were net buyers to the tune of Rs 1904 cr.

 

Rupee depreciated 2 paise to end at 77.73/$.

 

RBI's Monetary Policy Committee unanimously voted to increase repo rate by 50 bps to 4.90%. The MPC also voted unanimously to remain focused on the withdrawal of accommodation to ensure that inflation remains within range going forward, while supporting growth. While the real GDP growth forecast for FY23 has been retained at 7.2%, the inflation projection for the year has been increased to 6.7% from 5.7%.

 

OUTLOOK

 

Today morning, Asian markets are little changed and SGX Nifty is suggesting around 80 points lower start for our market.

 

In yesterday's report we had said that 20-DMA, placed around 16250, continued to be immediate support while 16610, the top made Monday, was the immediate hurdle on the hourly chart.

 

Nifty, after touching a high of 16514, slipped to end at 16356. The benchmark is set to open below 16300 today.

 

20-DMA, placed around 16250, continues to be immediate support, upon breach of which, 16140 and 15960, the 61.8% and 78.6% retracement levels of the recent 15735-16794 upmove, would be the next downside levels to eye; 16610, the top made Monday, continues to be immediate hurdle.

 

For Banknifty, 20-DMA, placed around 34650, is the immediate support, below which 34100-34200 would be the next support zone; 35450, the top made yesterday, is the immediate hurdle, above which, 36084 the top made last week, which also coincided with the upper band of daily bollinger band, would be the bigger hurdle to eye.