21550 CONTINUES TO BE IMMEDIATE HURDLE

 

21550 CONTINUES TO BE IMMEDIATE HURDLE

 

WORLD MARKETS

 

Dow fell 0.3% while S & P 500 and Nasdaq rose 0.1% and 0.4% respectively, extending the winning streak to fifth straight session as Netflix led a broader rally among technology names.

 

Netflix shares surged more than 10% after earnings beat and its total subscriber count hit an all-time high of 260.8 million. Dow was hurt by declines of more than 2% in Verizon and 3M a day after each reported earnings.

 

Data showed U.S. business activity picked up in January and a measure of inflation eased.

 

U.S. 10-year treasury yield rose 5 bps to 4.18%. Dollar index fell 0.3% to 103.25. Gold fell 0.8% to $2013 per ounce.

 

WTI contract for March gained 1% to settle at $75.09 a barrel and Brent futures March contract gained 0.6% to settle at $80.04 a barrel.

 

European markets gained 0.6%-1.6%. PMI) surveys showed the euro zone economy’s downturn eased somewhat in January, although it remained sluggish. U.K. PMI figures rose in January to their highest level in seven months.

 

China’s central bank announced a deep cut to bank reserves, in a move that will inject about $140 billion of cash into the banking system.

 

AT HOME

 

Benchmark indices surged a percent each, snapping a 2-day losing streak and recouping two-third of yesterday's hefty losses. Sensex settled at 71060, up 690 points while Nifty added 215 points to finish at 21453. Nifty mid-cap and small-cap indices climbed 1.8% and 1.7% respectively. Except 0.2% lower Private Bank index, all the NSE sectoral indices ended higher, with Media and Metal indices being the top gainers, up 3% each.

 

FIIs net sold stocks worth Rs 6935 cr but net bought index futures and stock futures worth Rs 884 cr and 6282 cr respectively. DIIs were net buyers to the tune of Rs 6013 cr.

 

Rupee appreciated 3 paise to end at 83.12/$.

 

Bajaj Auto and TVS Motors delivered strong earnings in third quarter. Tata Steel's operational performance beat estimates. Tech Mahindra's revenue growth beat estimates.

 

OUTLOOK

 

Today morning, Nikkei is down 0.8% while Hang Seng and Shanghai are up 0.3% and 0.8% respectively. GIFT Nifty is suggesting a modestly lower start for our market.

 

In yesterday's report we had said that 20870, the 38.2% retracement level of the 18837-22124 upmove seen since late October, is the next downside level to eye while 21550 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

Nifty, after touching a low of 21137, rebounded to end at 21453.

 

21550 continues to be immediate hurdle on the hourly chart, a crossover of which, is required for a fresh upmove. If that happens, 21750-21850 would be next target area. On the way down, 21137, the low made yesterday, is the immediate support, upon breach of which, 20870, the 38.2% retracement level of the 18837-22124 upmove seen since late October, would be the next downside level to eye.

 

For Banknifty, 44490, the low made yesterday, which roughly coincided with 200-DMA, is the immediate support to eye; 45800 is immediate hurdle.

 

ACC and JSW Steel will report their quarterly earnings today.

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