STAY LONG WITH THE STOP-LOSS OF 17850

 

STAY LONG WITH THE STOP-LOSS OF 17850

 

WORLD MARKETS

 

US indices slipped 1.3%-1.8% as hot inflation report, decline in jobless claims and hawkish comments from Fed officials raised rate hike fears.

 

January’s producer price index bounced to 0.7%, higher than both consensus forecast of 0.4% and the December number, which showed a drop 0.2%. Jobless claims came in at 194,000, compared with expectations of 200,000.

 

St. Louis Fed President James Bullard said he backed a 50 bps interest rate hike at the central bank’s previous meeting and that he would not rule out a rate increase of that magnitude at the March meeting.

 

US 10-year treasury yield rose 6 bps to 3.865%. Dollar index rose 0.3% to 104.10. Gold was flat at $1836 per ounce.

 

Brent crude futures settled at $85.14 a barrel, losing 24 cents and WTI settled at $78.49 a barrel, shedding 10 cents.

 

In Europe, FTSE and DAX inched up 0.2% while CAC gained 0.9%.

 

AT HOME

 

After rising nearly two-third of a percent in the initial trade, benchmark indices gave away most of the gains to end just 0.1% higher. Sensex settled at 61319, up 44 points while Nifty added 20 points to finish at 18035. Nifty mid-cap and small-cap indices however saw decent gains of 0.7% and 1% respectively. Nifty IT and Realty indices were the top gainers among the sectoral indices, up 1.6% and 1.3% respectively while Financial Services index was the top loser, down 0.3%, followed by 0.2% lower Bank and Auto indices.

 

FIIs net bought stocks and stock futures worth Rs 1571 cr and 873 cr respectively but net sold index futures worth Rs 351 cr. DIIs were net buyers to the tune of Rs 1577 cr.

 

Rupee appreciated 8 paise to end at 82.72/$.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are down half a percent each while Shanghai is up 0.3%. SGX Nifty is suggesting around 90 points lower start for our market.

 

In yesterday's report we had said that 18200, the top made on 24th January, continued to be next upside target to eye and that 17850 was the immediate support on the hourly chart, with the stop-loss of which, trading longs could be held on to.

 

Nifty, after touching a high of 18135, reversed to end at 18035. The benchmark is set to open below 18000 today.

 

18135, the top made yesterday, which coincided with a trendline adjoining tops made on 30th December and 24th January, is the immediate hurdle, upon crossover of which, 18200-18250 would be next target area; 17850 continues to be immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 42015 continues to be important immediate hurdle, upon crossover of which, 43078, the top made on 24th January, would be next upside level to eye; On the way down, 41300-41200 is the immediate support area on the hourly chart.