ASIA TRADES LOWER ON GEOPOLITICAL WORRIES; 9160 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

ASIA TRADES LOWER ON GEOPOLITICAL WORRIES; 9160 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

WORLD MARKETS                             

US indices gained 0.1%-0.2% yesterday, but were well off session highs after Trump said he's willing to act alone on North Korea if China does not step up.

Trump also signaled he seeks to remove Bashar Assad from power in Syria, following a suspected chemical attack the White House has blamed on the Syrian government.

Markets also kept an eye on the two-day meeting between Chinese President Xi Jinping and Trump that was set to begin yesterday. The two leaders are expected to discuss a series of issues, including trade and North Korea. Speaking to the media before a dinner with the Chinese president, Trump alluded to positive relations between the two countries.

Weekly jobless claims fell to 234,000, well below an expected print of 250,000.

European markets, except a 0.4% lower FTSE, gained 0.1%-0.6%.

AT HOME

After falling about half a percent, benchmark indices recouped most of the losses post RBI policy announcement to end just marginally lower. Sensex settled at 29927, down 47 points while Nifty lost 3 points to finish at 9262. BSE mid-cap index gained 0.2% but the small-cap index fell 0.2%. BSE Realty and Oil & Gas indices gained 2% and 0.9% respectively, becoming top gainers among the sectoral indices while FMCG index was the top loser, down 0.8%, followed by 0.6% cut in Healthcare, Telecom and Consumer Durable indices.

FIIs net bought stocks worth Rs 143 cr but net sold index futures and stock futures worth Rs 928 cr and 168 cr respectively. DIIs were net sellers to the tune of Rs 206 cr.

Rupee appreciated 37 paise to end at 20-month high of 64.7275/$.

The RBI's Monetary Policy Committee kept the repo rate, the rate at which RBI lends short term funds to banks, unchanged at 6.25%, but hiked the reverse repo rate, the rate at which RBI borrows from banks, by 25 basis points to 6%. It hiked its outlook for GDP growth to 7.4% in this fiscal from 6.7% last year. Inflation is expected to average around 4.5% in the first half and 5% in the second half.

Real estate stocks gained after RBI allowed banks to invest in real estate investment trusts (REITs) as well as infrastructure investment trusts (InvITs).

Parliament yesterday passed four legislations to pave the way for roll out of the historic Goods and Services Tax (GST) from the target date of July 1.

India's Nikkei Services Purchasing Managers’ Index (PMI) rose to a five-month high of 51.5 points in March, compared to 50.3 in Feb.

OUTLOOK

As per the latest development, the U.S. military has launched more than 50 missiles against targets in Syria.

Asian markets, except a modestly higher Nikkei, are trading with cuts of upto 0.8%. US futures are down about a fourth of a percent and SGX Nifty is suggesting about 40 points lower start for our market.

After Nifty achieved the immediate target of 9218, we have been working with the next target of 9400. In yesterday's report we had mentioned that 9180-9160 is the immediate support area, with the stop-loss of which trading longs should be held on to.

The benchmark, after touching a low of 9219, recovered to end at 9262 but is set to open lower today.

9180-9160 continues to be immediate support area, with the stop-loss of which trading longs should be held on to.