21912 IS THE NEXT TARGET; STAY LONG WITH THE STOP-LOSS OF 21450

 

21912 IS THE NEXT TARGET; STAY LONG WITH THE STOP-LOSS OF 21450

 

WORLD MARKETS

 

U.S. indices surged 1%-1.3%, recovering from Wednesday's sell-off that happened after Fed signaled that a March rate cut is unlikely.

 

U.S. fourth quarter worker productivity grew faster than expected, while initial claims for state unemployment benefits increased in the latest week. ISM manufacturing index notched a reading of 49.1 in January, slightly above estimate of 47.2.

 

U.S. 10-year treasury yield fell 3 bps to 3.882%. Dollar index fell 0.4% to 103.07. Gold rose 0.8% to $2055 per ounce.

 

WTI crude futures fell 2.7% to settle at $73.82 a barrel and Brent future fell 2.30% to $78.70 a barrel.

 

European markets fell 0.1%-0.9%. The Bank of England left interest rates unchanged in a largely expected move. Eurozone headline inflation eased slightly in January while core figures declined less than expected and services inflation held steady.

 

AT HOME

 

Benchmark indices ended modestly lower after a relatively quiet interim budget session. Sensex settled at 71645, down 106 points while Nifty lost 28 points to finish at 21697. Nifty mid-cap index fell 0.6% while small-cap index rose 0.6%, hitting fresh record highs. Nifty PSU Bank index soared 3.1%, becoming top gainer among the sectoral indices, followed by 0.5% higher Auto index. Media and Metal indices were the top losers, down 1.1% and 1% respectively.

 

FIIs net sold stocks and stock futures worth Rs 1880 cr and 2076 cr respectively but net bought index futures worth Rs 832 cr. DIIs were net buyers to the tune of Rs 872 cr.

 

Rupee appreciated 8 paise to end at 82.96/$.

 

Interim Budget presented by FM Nirmala Sitharaman pegged FY25 nominal GDP growth at 10.5% while projecting a fiscal deficit of 5.1% of GDP as against revised FY24 target of 5.8%. Net and Gross market borrowings are expected to be Rs. 11.75 lk cr and Rs. 14.1 lk cr respectively. FY25 capex outlay has been increased by 11.1% to Rs. 11.1 lakh cr, which comes to 3.5% of GDP. Defense spend, v/s FY24 revised estimate, is little changed at Rs. 4.54 lh cr. Allocation for PM Awas Yojana has been increased by 49% to Rs. 80671 cr while Fertiliser subsidy has been cut by 13.2% to Rs. 1.64 lk cr. Food subsidy is down by 3.3% at Rs. 2.05 lk cr. Outlay for MGNAREGA is unchanged at Rs. 86000 cr. The budget did not propose any changes related to tax rates. The budget proposed to convert 40000 rail bogies to Vande Bharat standards and also expand electric vehicle ecosystem. Government also proposes to launch new housing scheme for middle class. 

 

OUTLOOK

 

Today morning, Hang Seng and Nikkei are up 2% and 1.1% respectively while Shanghai is up 0.2%. GIFT Nifty is suggesting around 150 points gap-up start for our market.

 

In yesterday's report we had said that 21912, the 78.6% retracement level of the recent fall from all-time high, continued to be next upside target while 21449, the low made Wednesday, was the immediate support.

 

Nifty, after touching a high of 21832, eased to end at 21697. The benchmark is set to open above 21800 today.

 

21912, the 78.6% retracement level of the recent fall from all-time high, continues to be next upside target, upon crossover of which, 22124, the top made in January, would be next upside level to eye; 21449, the low made Wednesday, continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 46580, the top made last week, continues to be upside level to eye above which, 47812-48000, the gap created by gap-down opening on 17th January, would be next target zone; 45100 is immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

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