TRAIL STOP-LOSS TO 17825

 

TRAIL STOP-LOSS TO 17825

 

WORLD MARKETS

 

Yesterday, US indices ended flat to marginally lower, following JP Morgan's takeover of troubled First Republic Bank.

 

JPMorgan Chase won the weekend auction for troubled First Republic Bank. As part of the agreement, JPMorgan acquired all of the regional bank’s deposits and a “substantial majority of assets.”

 

Treasury Secretary Janet Yellen warned the U.S. may run out of measures to pay its debts as early as June 1 if the debt ceiling is not raised.

 

ISM manufacturing PMI rose to 47.1 last month from 46.3 in March, which was the lowest reading since May 2020. Construction spending increased more than expected in March, boosted by investment in nonresidential structures, but single-family homebuilding remained depressed amid higher mortgage rates.

 

US 10-year treasury yield jumped 15 bps to 3.574%. Dollar index rose 0.4% to 102.12. Gold fell 0.4% to $1982 per ounce.

 

Brent crude fell 1.3%, to $79.31 a barrel, while WTI crude slid 1.5%, to $75.66.

 

Main European markets gained 0.1%-0.8%.

 

China’s manufacturing PMI declined to 49.2 from 51.9 in March, slipping below the 50-point mark that separates expansion and contraction.

 

On Friday, Dow and S & P 500 gained 0.8% each while Nasdaq rose 0.7%.

 

The personal consumption expenditures (PCE) price index edged 0.1% higher in March after rising 0.3% in February. Y-o-Y rise stood at 4.2%, down from 5.1% in February. Excluding the volatile food and energy components, the PCE price index inched up 0.3% after increasing at the same rate in February. On a year-on-year basis, it rose 4.6% in March after rising 4.7% in February. Meanwhile, the final University of Michigan consumer sentiment index stood at 63.5 in April, up from a three-month low 62 in March.

 

Shares of troubled First Republic Bank plunged more than 43% on reports that the most likely outcome for the regional bank is the Federal Deposit Insurance Corporation taking receivership.

 

US 10-year treasury yield fell 10 bps to 3.428%. Dollar index rose 0.2% to 101.67. Gold inched up 0.1% to $1990 per ounce.

 

Brent futures for June delivery rose 1.5% to $79.50 a barrel. The more actively traded July contract was up 2.8% at $80.40. WTI crude settled up 2.7% at $76.78 a barrel.

 

Main European markets gained 0.1%-0.8%. Preliminary figures showed the euro zone economy grew by 0.1% in the first quarter, below expectation of a 0.2% growh, as Germany’s GDP flat lined over the period.

 

Earlier, Bank of Japan kept its monetary policy unchanged in the first monetary policy meeting chaired by new governor Kazuo Ueda.

 

For the week, Dow and S & P 500 rose 0.9% while Nasdaq climbed 1.3%. In Europe, FTSE and CAC fell 0.6% and 1.1% respectively but DAX rose 0.3%. In Asia, Hang Seng fell 0.9% but Shanghai, Nikkei and Nifty gained 0.7%, 1% and 2.4% respectively.

 

For the month, Dow and S & P 500 rose 2.5% and 1.5% respectively while Nasdaq was little changed.

 

AT HOME

 

Sensex and Nifty surged 0.8% each to close at the highest level after 16th January and 24th February respectively. Sensex settled at 61112, up 463 points while Nifty added 150 points to finish at 18065. Nifty mid-cap and small-cap indices gained 1.2% and 0.8% respectively to close at the highest level after 3^RD January 2023 and 13^th January respectively. Except 0.3% lower Consumer Durables index, all the NSE sectoral indices ended higher, with PSU Bank and Media indices being the top gainers, up 2.4% and 1.8% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 264 cr, 184 cr and 211 cr respectively. DIIs were net buyers to the tune of Rs 3304 cr.

 

Rupee appreciated 1 paise to end at 81.83/$.

 

For the week, Sensex and Nifty gained 2.4% and 2.5% respectively. For the month, Sensex and Nifty gained 3.6% and 4.1% respectively.

 

GST collection rose 12% to an all-time high of Rs. 1.87 lakh cr. in April.

 

Kotak Mahindra Bank reported strong set of numbers with ROA at 3%, NII growth at 35% and Net Profit growth at 26%.

 

OUTLOOK

 

Today morning, Nikkei is marginally in the red while Hang Seng is marginally higher. Shanghai is shut for a holiday. SGX Nifty is trading around 18240, suggesting nearly 130 points higher start when compared to Friday's close of Nifty futures.

 

In Friday's report we had said that 18135, the top made in February, was the next upside target to eye while immediate support on the hourly chart had moved up to 17750, with the stop-loss of which, trading longs could be held on to.

 

Nifty surged to 18089 before closing at 18065 and is set to open above 18150 today.

 

18252, the top made in January, is the next upside target, above which, 18447, the 78.6% retracement level of the entire 18887-16828 fall, would be the next big target; Immediate support on the hourly chart has moved up to 17825, with the stop-loss of which trading longs can be held on to.

 

For Banknifty, 43578, followed by 44151, the tops made in January 2023 and December 2022 respectively, are the next upside levels to eye. 42800-42700 is the immediate support zone, with the stop-loss of which, trading longs can be held on to.