NIFTY RETREATS AFTER HITTING 7510-7540 TARGET AREA

NIFTY RETREATS AFTER HITTING 7510-7540 TARGET AREA

WORLD MARKETS                             

US indices fell 0.6%-1.3% yesterday as oil prices reversed and weaker-than-expected Chinese trade data renewed concerns about global growth.

Energy sector led the losers as Nymex oil fell $1.40 or 3.7% to $36.50 a barrel. Brent settled down 3% at $39.65 a barrel.

China's trade data showed that exports fell 25.4% in February in U.S. dollar terms, while imports fell 13.8%, with both declines wider than expectations. The drop in exports was the largest on-year drop since 2009. Several industrial metals including copper, nickel and aluminum saw a sharp drop following the data.

European markets lost 0.2%-1% with basic resources stocks taking the biggest hit.

AT HOME

After gaining about half a percent in the initial trade, benchmark indices gave away all the gains though rest of the session to end flat, extending the consolidation to second day. Sensex settled at 24659, up 13 points while Nifty remained unchanged at 7485. BSE mid-cap index lost 0.2% while the small-cap index gained 0.2%. BSE Metal and Oil & Gas indices gained 1.7% and 1.5% respectively, becoming top gainers among the sectoral indices while Bankex tumbled 1.3%, becoming top loser, followed by 0.6% cut in finance index.

FIIs net bought stocks, index futures and stock futures worth Rs 775 cr, 803 cr and 349 cr respectively. DIIs were net sellers to the tune of Rs 1342 cr.

Rupee depreciated 28 paise to end at 67.36/$.

OUTLOOK

Today morning Asian markets are trading with cuts of upto 2% with Shanghai leading the losses and SGX Nifty is suggesting about 20 points lower opening for our market.

Readers would recall that we had been working with target area of 7512-7540 ever since 7250 hurdle was taken out. We had also advised booking profit in trading longs in this region considering steep run-up over past couple of sessions.

The benchmark touched a high of 7527 yesterday, hitting this target area, and retreated from there to close at 7485.

7540, as we have been mentioning, is the erstwhile double bottom made in September and December 2015 respectively which would now act as a hurdle. A decisive breach of this hurdle is required for the fresh upmove.

7380, the lower level of the gap created by the gap up opening on Thursday, is the immediate support on the way down, a breach of which can take the benchmark to around 7280, where the 34-DMA is placed.