DOLLAR INDEX TUMBLES TO FIVE MONTH LOW WHILE OIL CLIMBS TO 2016 HIGH; NIFTY FAILS TO TAKE OUT 7600 HURDLE

DOLLAR INDEX TUMBLES TO FIVE MONTH LOW WHILE OIL CLIMBS TO 2016 HIGH; NIFTY FAILS TO TAKE OUT 7600 HURDLE

WORLD MARKETS                             

US indices gained 0.2%-0.9% yesterday on the back of rising oil and a positive view of the Fed's Wednesday announcement. Materials, Industrials and Energy were the best performing sectors. Dow turned positive for the year, recouping 11% loss.

Nymex oil soared 4.5% to $40.20 a barrel for its highest settle of the year so far as the dollar weakened and talk continued about an April 17 meeting of OPEC and non-OPEC producers. Brent rose $1.21 to $41.54.

US weekly jobless claims came in at 265,000. The March Philly Fed index was 12.4 versus minus 2.8 for February. Fourth-quarter current account data showed a deficit of $125.3 billion. Leading indicators for February rose 0.1%.

In Europe, FTSE and Spain gained 0.4% and 0.2% respectively while CAC, DAX and Italy fell 0.4%, 0.9% and 0.7% respectively. The Bank of England voted 9-0 to keep the U.K. main interest rate at 0.5% — marking the seventh straight year of record-low interest rates. The central bank of Norway cut its key interest rate to an all-time low of 0.5% from 0.75% and raised the prospect of a move into negative territory.

Dollar index fell more than a percent and touched its lowest level since October 2015. Against the Yen, dollar hit the lowest level since October 2014. Gold climbed $35 to $1265 an ounce.

AT HOME

After Wednesday's dramatic recovery, yesterday was a day of dramatic fall as benchmark indices, after gaining more than a percent in the morning trade, gave away all the gains in the late noon sell-off to end near zero line. Sensex settled at 24677, down 5 points while Nifty managed to gain 14 points to finish at 7513. BSE mid-cap and small-cap indices gained 0.5% and 0.1% respectively. BSE Oil & Gas and Basic Material indices gained 2.3% and 1.3% respectively, becoming top gainers among the sectoral indices while Healthcare and Realty indices fell 1.2% and 0.9% respectively, becoming top losers.

FIIs net bought stocks, index futures and stock futures worth Rs 744 cr, 592 cr and 444 cr respectively. DIIs were net sellers to the tune of Rs 168 cr.

Rupee appreciated 48 paise to end at 66.75/$.

OUTLOOK

Today morning Nikkei is down more than a percent and half on the back of strengthening Yen. Other Asian markets are trading with modest gains and SGX Nifty is suggesting about 30 points higher opening for our market.

In yesterday's report we had clearly mentioned that after a gap up opening Nifty would be again close to important 7600 hurdle, a crossover of which is required for the fresh upmove. We had also advised waiting for the crossover of the top made in first hour for taking long positions.

The benchmark made a top of 7585 in the first hour of trade but could not cross it and plunged sharply in the late noon trade to end at 7513.

We reiterate the view that 7600 continues to be an important hurdle, a crossover of which is required for fresh upmove. On the way down, 7405, the bottom made on Wednesday, is the immediate support.