34-DMA LANDS SUPPORT AROUND 21650

 

34-DMA LANDS SUPPORT AROUND 21650

 

WORLD MARKETS

 

U.S. indices recovered from intraday lows to end modestly higher. S & P 500 hit 5000 mark for the first time and closed just below it.

 

Disney surged 11.5% after beating quarterly earnings estimates and raising its guidance. Chipmaker and designer Arm soared 48% after reporting stronger-than-expected earnings and providing an upbeat profit forecast.

 

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 218,000 for the week ended Feb. 3, less than the 220,000 forecast.

 

U.S. 10-year treasury yield rose 3 bps to 4.154%. Dollar index inched up 0.1% to 104.14. Gold was flat at $2034 per ounce.

 

Oil rose for the fourth day in a row after the U.S. killed a militant commander in Iraq and Israel rejected a ceasefire proposal by Hamas. WTI futures rose 3.2% to settle at $76.22 a barrel and Brent gained 3.1% to trade at $81.63 a barrel.

 

In Europe, FTSE fell 0.4% while DAX and CAC gained 0.2% and 0.7% respectively.

 

China’s PPI fell 2.5% y-o-y in January, slightly better than expectations for a 2.6% decline. CPI fell 0.8%, more than the median estimate for a 0.5% decline. This was its fourth straight decline and its biggest drop since 2009.

 

AT HOME

 

Benchmark indices plunged 1% each for their worst day this month so far and closed at one-week low. Sensex settled at 71428, down 723 points while Nifty lost 212 points to finish at 21717. Nifty mid-cap and small-cap indices fell 0.05% and 0.4% respectively. Nifty Private Bank and FMCG indices were the top losers among the sectoral indices, down 2.6% and 2.1% respectively while PSU Bank and Media indices were the top gainers, up 2% each.

 

FIIs net sold stocks, index futures and stock futures worth Rs 4934 cr, 1205 cr and 6202 cr respectively. DIIs were net buyers to the tune of Rs 5512 cr.

 

Rupee appreciated 1 paise to end at 82.96/$.

 

Monetary Policy Committee held repo rate unchanged at 6.5% and also maintained withdrawal of accommodation stance. RBI maintained FY24 CPI projection unchanged at 5.4% while pegged FY25 number at 4.5%. The apex bank projected FY25 real GDP growth to be 7%.

 

OUTLOOK

 

China, South Korea and Taiwan’s markets are shut today owing to Lunar New Year holiday, while Singapore and Hong Kong will see a half day of trading. Nikkei is up 0.3% today morning while Hang Seng is down 2%. GIFT Nifty is suggesting around 50 points lower start for our market.

 

In yesterday's trade we had said that 22126, the top made last week, continued to be immediate hurdle, while 20 and 34-DMAs were placed around 21700 and 21630 respectively, making 21700-21630 important immediate support area.

 

Nifty plunged all the way to 21665 before closing at 21717.

 

34-DMA placed around 21650, is the important immediate support to eye, upon breach of which 21515 and 21350, the 61.8% and 78.6% retracement levels of the recent 21137-22126 upmove, would be next downside levels to eye; 22126 continues to be important immediate hurdle.

 

For Banknifty, 44429, the low made in January, is the next support; 45900 is immediate hurdle.

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