NIFTY ACHIEVES 10340 TARGET; 10500 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 10340 TARGET; 10500 IS THE IMMEDIATE HURDLE

WORLD MARKETS

US indices climbed 1%-1.4%, breaking four-day losing streak, as worries about a potential trade war waned.

Trump yesterday appeared to signal the tariffs he announced could be open to negotiation, tweeting that "Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed". Also, House Speaker Paul Ryan said he was "extremely worried" about Trump's trade plan.

WTI crude surged 2.2% to $62.57 and Brent rose 1.8% to $65.54 a barrel

European markets, except 0.4% lower Italy, gained 0.6%-1.5%. Italy fell after the country's voters opted to shun mainstream politics for anti-establishment parties.

AT HOME

Benchmark indices nosedived nearly a percent in today's trade, extending the losing streak to fourth straight day. Sensex lost 300 points to settle at 33746 while Nifty finished at 10358, down 100 points. BSE mid-cap and small-cap indices fell 1% and 1.1% respectively. BSE Metal index tumbled 3.3%, becoming top loser among sectoral indices, followed by 2.2% lower Energy index. IT and Consumer Durable indices were the top gainers, up 0.4% and 0.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 367 cr, 1488 cr and 473 cr respectively. DIIs were net sellers to the tune of Rs 154 cr.

Rupee appreciated 6 paise to end at 65.10/$.

India's Nikkei/IHS Markit Services Purchasing Managers’ Index fell to a six-month low of 47.8 in February, compared with January’s 51.7. Composite PMI, which includes both manufacturing and services, plunged to 49.7, its lowest since August, from 52.5 in January.

OUTLOOK

Today morning, Nikkei is up more than 2%, Hang Seng is up more than a percent and half and Shanghai is up 0.3%. SGX Nifty is suggesting about 60 points higher start for our market.

Readers would recall that after Nifty broke 10500 support, we had given downside targets of 10410 followed by 10340. Nifty yesterday plunged to 10324 before closing at 10358, achieving both the targets mentioned above and vindicating our view.

As we have been mentioning, Nifty has been in a consolidation mode after touching a low of 10276 on 6th February and 10276-10638 is the range of this consolidation. After four days of fall, Nifty is now closer to lower end of this range and a decisive breach of 10276 would open up the next leg of downmove.

On the way up 10500 is the immediate hurdle on the hourly chart above which 10638 would be the bigger resistance.