Trends on SGX Nifty indicate a negative opening for the broader index in India. Deepak Jasani, Head-Research, HDFC Securities said, Indian markets could open flat to mildly higher in line with mixed Asian markets today and positive US markets on Friday.
Weakness in SGX Nifty could drag down the domestic market in early trades today as the spotlight continues to be on the developments around the Russia-Ukraine war which rages on each passing day and also on Federal Reserves’ tightening plans. Prashanth Tapse, Vice President (Research), Mehta Equities Ltd said, benchmark Nifty may wobble as nervousness remains, but the good news is that equities are likely to trade without giving back too much ground.
Bulls will aim to regroup near 17,525-17,550 zone, while the immediate target is at 17,857. The US Federal Reserve will publish minutes from the last meeting on April 6 and the European Central Bank are set to publish on April 7 while the street will spy with one big eye on India’s Reserve Bank of India’s interest rate decision to trickle in on Friday, April 8.
Nifty rose on the first day of the Monthly F&O series and the new financial year. At close Nifty was up 1.28 percent or 223.3 points at 17658.
Nifty logged the second best week in nearly seven months rising 3.02 percent over the week. The new F&O series and new Fiscal brought back long traders who bet on their favorite stocks. Picking up from the momentum in the current week, we think Nifty could test the resistance of 17795 in the coming week. Market breadth could be better in the coming week as mid and smallcaps could see heightened interest. The RBI MPC meet outcome on April 8 could cap the coming week. On falls, 17353 could be a support, Jasani added.
Asian shares trade mixed
Asian shares were mixed on Monday, as traders weighed the prospect of aggressive Federal Reserve interest-rate hikes and stiffer sanctions on Russia.
US stocks close higher
All three major US stock benchmarks closed higher Friday, after a March jobs report reinforced a picture of a healthy economy but also underlined expectations for the Federal Reserve to be more aggressive in hiking interest rates in an effort to rein in persistently hot inflation. For the week, the Dow fell 0.1 percent, while the S&P 500 rose 0.1% and the Nasdaq advanced 0.7 percent.
Unemployment rate falls in US
The US economy created a healthy 431,000 jobs in March and the unemployment rate fell to 3.6 percent, from 3.8 percent,. Economists polled by The Wall Street Journal had forecast a total payroll gain of 490,000 jobs in March, and a drop in the unemployment rate to 3.7 percent, from 3.8 percent,.Hourly pay rose sharply, pushing the increase in the past 12 months to 5.6 percent,, the highest rate since the early 1980s.
In other US economic data Friday, the S&P Global US Manufacturing Purchasing Managers’ Index final reading for March was 58.8, up from 57.3 in February. However, the Institute for Supply Management’s manufacturing PMI, a closely followed index of U.S.-based factory activity, slipped to 57.1 percent, in March from 58.6 percent, a month earlier.
The yield on the US 10-year Treasury note rose 5 basis points Friday to 2.374 percent,. For the week, the 10-year yield dropped 11.7 basis points, the largest weekly decline since the stretch ending March 4.
US two-year Treasury yields jumped to 2.4503 percent, from 2.284 percent, surpassing benchmark 10-year U.S. Treasury yields , which also rose to 2.3767 percent from 2.325 percent,.
Global factory activity slows post-Russia's invasion of Ukraine
Global factory activity slowed in March as Russia's invasion of Ukraine tightened supply chain bottlenecks, dampened demand and whacked confidence, while soaring energy costs drove a broader surge in prices, surveys showed on Friday.
S&P Global's final manufacturing Purchasing Managers' Index (PMI) for the euro zone fell to a 14-month low of 56.5 in March from February's 58.2, below an initial "flash" estimate of 57.0 but still well above the 50 mark that separates growth from contraction.
India exports spurts to record high
India's merchandise exports spurted to a record high of $418 billion in the 2021-22 fiscal on higher shipments of petroleum products, engineering goods, gem and jewellery and chemicals, according to official data released on Sunday. Outbound shipments touched an all-time high of $40 billion in a month in March 2022.
Crude prices fall in Asian trade
Oil prices fell at the start of Asian trade on Monday , after the United Arab Emirates and the Iran-aligned Houthi group welcomed a truce that would halt military operations on the Saudi-Yemeni border, alleviating some concerns about potential supply issues.
The early losses this week come after oil prices settled down around 13 percent last week - their biggest weekly falls in two years - when U.S. President Joe Biden announced the largest-ever US oil reserves release. Member countries of the International Energy Agency (IEA) committed to another coordinated oil release in an extraordinary meeting, according to Japan's industry ministry.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, crude oil prices are likely to remain volatile to negative in today’s session. Crude oil is having support at $94.40-$92.10 and resistance is at $101.20–104.50, In INR terms crude oil has support at Rs7,380-7,220; while resistance is at Rs7,820–8,050, he said.
Fuel prices up
Petrol and diesel prices were on Monday hiked by 40 paise a litre each, taking the total increase in rates in the last two weeks to Rs 8.40 per litre.
Petrol in Delhi will now cost Rs 103.81 per litre as against Rs 103.41 previously, while diesel rates have gone up from Rs 94.67 per litre to Rs 95.07, according to a price notification of state fuel retailers. In Mumbai, the price of petrol was held unchanged at an all-time high of Rs 118.83 per litre. Diesel price also continues to be at Rs 103.07 a litre, the highest among metros.
Gas price hike: ONGC to witness $3 bn rise in earnings
State-owned Oil and Natural Gas Corporation (ONGC) is likely to see a $3 billion (about Rs 23,000 crore) rise in its annual earnings from the more than doubling of the price of natural gas it produces, while Reliance Industries may get $1.5 billion (Rs 11,500 crore) more in revenue, a report has said.
Gold, silver likely to remain volatile this week
Last week, Gold ended under significant pressure despite the 2-year and the 10-year Treasury yields inverting for the first time since 2019. Many market participants view this as a possible red flag that recession could be around the corner. Gold and silver also settled at low last week due to strong US job data, firm dollar and rising U.S. bond yields. The unemployment rate dropped to 3.6 percent, lowest since February 2020. However, Russia-Ukraine conflicts and lockdown in China due to rising covid-19 cases supported gold and silver at lower levels.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, both precious metals are expected to remain volatile this week ahead of the FOMC meeting minutes. Gold has support at $1910-1895, while resistance at $1940-1950. Silver has support at $24.35- 24.00, while resistance is at $24.95-25.24. In INR terms gold has support at Rs 51,240–50,950, while resistance is at Rs 51,950–52,220. Silver has support at Rs 67,150- 66,680 while resistance is at Rs 68,100–68,550.
M-cap of top-10 valued firms soars Rs 2.61 lakh cr
The top 10 valued domestic firms added a whopping Rs 2,61,767.61 crore to their total market valuation last week in tandem with a buoyant trend in equities, with HDFC Bank and Reliance Industries emerging as the biggest gainers.
Last week, the Sensex zoomed 1,914.49 points or 3.33 percent.