NIFTY RETREATS AFTER ACHIEVING 22775; STAY LONG WITH THE STOP-LOSS OF 22450

 

NIFTY RETREATS AFTER ACHIEVING 22775; STAY LONG WITH THE STOP-LOSS OF 22450

 

WORLD MARKETS

 

U.S. indices nosedived 1.5%-2% on Tuesday after higher-than-expected wage data raised fresh inflation concerns ahead of the Federal Reserve’s rate decision on Wednesday. For the month, Dow lost 5% for its worst monthly performance since September 2022. The S&P 500 slid about 4.2% this month, and the Nasdaq lost 4.4%. The three major averages snapped five-month winning streaks.

 

The Labor Department said the employment cost index, a measure of wages and benefits, added 1.2% in the first quarter, above the 1% consensus estimate.

 

Yesterday, Dow inched up 0.2% after Federal Reserve Chair Jerome Powell largely ruled out that the central bank’s next move could be a hike, while S & P 500 and Nasdaq fell a third of a percent each, dragged down by losses from chipmakers.

 

The central bank held rates steady, citing a “lack of further progress” in bringing inflation back down toward its 2% goal. Starting in June, the central bank said it will slow the pace at which it allows maturing bond proceeds to roll off its balance sheet without reinvesting them.

 

Stocks tied to artificial intelligence struggled following disappointing reports from some top AI contenders.

 

The ADP Employment report showed that U.S. private payrolls increased more than expected in April while data for the prior month was revised higher. A U.S. Labor Department report, meanwhile, showed that job openings fell in March. Separately U.S. manufacturing contracted in April amid a decline in orders after briefly expanding in the prior month, while a measure of prices paid by for inputs approached a two-year high.

 

U.S. 10-year treasury yield fell 5 bps to 4.632%. Dollar index plunged 0.6% to 105.63. Gold jumped 1.5% to $2320 per ounce.

 

WTI crude futures tumbled 3.6% to $79 while Brent futures fell 3.4% to $83.44 a barrel.

 

In Europe, FTSE fell 0.3% while most European markets were closed for the May Day/Labor Day public holiday.

 

AT HOME

 

After rising more than half a percent, benchmark indices nosedived in last hour to end lower by a fifth of a percent each. Sensex settled at 74482, down 188 points while Nifty lost 38 points to finish at 22604. Nifty mid-cap index inched up 0.1% while small-cap index ended marginally in the red.  Nifty IT index was the top loser among the sectoral indices, down 1.1%, followed by 1% lower Media and Metal indices. Auto and Realty indices were the top gainers, up 1.8% and 1.4% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1072 cr, 4121 cr and 6866 cr respectively. DIIs were net buyers to the tune of Rs 1429 cr.

 

Rupee appreciated 4 paise to end at 83.42/$.

 

For the month, Nifty gained 1.2%, extending the winning streak to third consecutive month.

 

Auto companies reported mixed sales numbers for April. Maruti and Eicher Motors sales disappointed. TVS Motors sales surged 25%, beating estimates. Tata Motors' passenger sales came under pressure while commercial vehicle sales remained strong.

 

OUTLOOK

 

Today morning, Hang Seng is up half a percent while Nikkei and Shanghai are off 0.3% each. GIFT Nifty is suggesting a modestly higher start for our market.

 

In Tuesday's report we had said that 22775, the record high made on 10th April, continued to be next upside target while 22450-22400 is the immediate support zone, with the stop-loss of which, trading longs could be held on to.

 

Nifty, after touching a high of 22783, slipped to end at 22604.

 

22783, the top made on Tuesday, is the immediate hurdle, upon crossover of which, 22950, around which a rising trendline adjoining recent tops on daily chart is placed, would be the next upside target; 22450 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 50500 is the next major level to eye; 48600 is the immediate support, with the stop-loss of which, trading longs can be held on to.

 

Coal India and Adani Enterprises will report their quarterly earnings today.

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