Trends on SGX Nifty indicate a positive opening for the broader index in India. The Indian markets could open flat to mildly higher in line with higher Asian markets today and despite sharply higher US markets on Wednesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
SGX Nifty is indicating a higher opening for our stocks markets amidst optimism on backdrop of reports that Russia is ready to resume talks with Ukraine, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. The other good news is that Fed Chairman Powell has hinted at a 25 bps rate hike in March is quite likely. A rebound in the economy on backdrop of GST crossing 1.3 lakh crore for 5th time, indicates upside ahead for stocks. Nifty’s biggest supports are placed at 16407 mark. From a chartist standpoint, the technical landscape will improve considerably only if Nifty closes above 16,807 mark. Above Nifty 16,807 mark, Nifty’s next resistance is at 17,057 mark.
The market has been consolidating in a slightly bigger range since the last couple of trading sessions and is attracting some buying interest at lower levels around 16500, but at the same time, it’s failing to cross the sturdy wall of 16800 – 17000 (Breakdown point as well as 200-SMA), said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One Ltd. So it would be too early to pre-empt last Thursday’s low as a bottom. Till the time certain levels are not surpassed it would be unfair to call it a base building. Rather than considering the short-term downward direction, a consolidation followed by a breakdown does not bode well for the bulls. A small aberration on the global front could resume the negativity to test lower levels. Also, there is no relief with respect to the Russia-Ukraine war, hence, till the time things do not stabilize there we are not out of the woods completely. Considering the higher volatility, wild swings, or opening surprises on both sides can wipe off leveraged traders. Thus, we advise traders to avoid carrying aggressive overnight bets for a while.
For the coming session, 16500 followed by 16400 are to be seen as immediate support. On the sectoral front, metals were the only benefactors that surged decisively amidst the ongoing tentativeness, while Banking space and Auto were the major culprits that razed the market sentiments. Going forward, it is advisable to keep a cautious view and to keep a close track of global developments, Chavan said.
Fuel price expected to go up after final phase of polls today
Today the elections in the major state of UP is entering the sixth phase and with the final phase just a few days away, the strong uptick in the fuel price is expected after the elections, said Mohit Nigam, Head - PMS, Hem Securities. Due to the war between Ukraine and Russia the crude prices have reached over $110 per barrel and are expected to rise further. With Russian invasion intensifying and the Ukrainian resistance strong the end to the war is expected to take some time.
Fitch has downgraded Russian sovereign debt to junk, biggest on any European nation since world war II. This comes on the back of the economic sanctions imposed by the many world nations on Russia.
With SGX Nifty giving flattish signals for the opening, the stock markets are expected to stay in the range for today. Support and Resistance for Nifty 16,500 and 16,800, and for the Bank Nifty it's expected to be around 35,000 to 35,700, Nigam added.
Nifty recovered from the noon lows to cut the day losses by the end of day. Advance decline ratio is now even suggesting selling is concentrated in large cap stocks. Nifty has formed a doji but its high low range for the day is within that of the previous session. This reduces the predictive power of a doji which is normally a reversal signal. Soaring energy prices are increasing fears of "stagflation" as oil prices surged past $111 a barrel. 16,482-16,748 could be the band for the Nifty in the near-term
Stocks to watch out for
Sterlite Tech has launched an industry-first end-to-end 5G enterprise solutions. UPL has approved the buyback of Rs. 1,100 crores at Rs. 875.
US stocks close higher
US stock indexes finished sharply higher Wednesday, with gains gathering steam after Federal Reserve Chairman Jerome Powell outlined plans to begin dialing back the central bank’s easy-money stance to fight inflation, while playing down the prospect of a larger-than-usual increase of benchmark rates in March, in testimony on Capitol Hill. Powell said he supported a 25 basis point increase, rather than a larger 50 basis point increase, and would propose such a move when the Fed convenes its two-day meeting mid March.Wall Street also monitored headlines indicating Ukraine and Russia could be headed for new negotiations, even as the conflict simmered.
Nifty closed lower on March 2 despite a last hour recovery in indices, due to steady escalation of Russia-Ukraine crisis. At close, Nifty was down 1.12 percent or 187.9 points at 16,605.9.
Nifty recovered from the noon lows to cut the day losses by the end of day. Advance decline ratio is now even suggesting selling is concentrated in large cap stocks. Nifty has formed a doji but its high low range for the day is within that of the previous session. This reduces the predictive power of a doji which is normally a reversal signal. Soaring energy prices are increasing fears of "stagflation" as oil prices surged past $111 a barrel. 16482-16748 could be the band for the Nifty in the near-term.
Petrol, diesel prices remain steady
Petrol and diesel prices remained unchanged across metro cities for more than 100 days on Thursday. This is the longest duration when the rates have remained static. In Delhi, petrol costs Rs 95.41 a litre while the rate of diesel was Rs 86.67 per litre.
In Mumbai, petrol can be bought at Rs 109.98 per litre and diesel costs Rs 94.14 for one litre. Among the metro cities, fuel rates are still the highest in Mumbai. Fuel prices vary across the states due to value-added tax or VAT.
Diesel and petrol prices also remained static in Kolkata at Rs 89.79 and Rs 104.67. In Chennai too, they remained unchanged at Rs 91.43 and Rs 101.40.
Asia Pacific shares trade higher
Shares in Asia-Pacific were largely higher in Thursday trade as U.S. stocks bounced back overnight. A private survey released Thursday showed slowing Chinese services activity growth in February, with the Caixin/Markit services Purchasing Managers’ Index coming in at 50.2 for that month – slowest in six months. That compared against January’s reading of 51.4.
US Treasury rates shoots up
The 10-year Treasury rate shot higher to 1.862 percent, marking its biggest daily gain in two years. The private sector added 475,000 new jobs in February, payroll processor ADP said — after omicron faded, governments eased pandemic restrictions and the economy perked up. Economists surveyed by The Wall Street Journal had forecast a 400,000 increase.
Crude prices soar
Surging energy prices also were in focus, with US crude oil prices settling at $110.60 a barrel on the New York Mercantile Exchange, the highest level in about 11 years, according to FactSet data. Investor concerns mounted over potential supply disruptions from an intensifying Russia-Ukraine war.
On Wednesday, crude oil settled on a positive note in the international markets as WTI crude settled at $110.60 per barrel and Brent settled at $114.56 per barrel. Domestic markets were also settled on a positive note at Rs 8,282 per barrel, up by 4.77 percent. The OPEC+ has decided to maintain an increase in output by 4,00,000 barrels per day in March despite the price surge to record highs, ignoring the Ukraine crisis during their talks and snubbing calls from consumers for more oils. Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect WTI prices could test $120 a barrel and Brent prices could test $125 a barrel in the upcoming sessions. Crude oil is having support at $106.80–104.00 and resistance is at $104.40–118.00 in today’s session. In INR terms crude oil has support at Rs8,002-7,723; while resistance is at Rs8,538–8,795".
MSCI reclassifies Russian indices
Equity index provider MSCI Inc. on Wednesday reclassified the MSCI Russian Indexes from “emerging markets” to “standalone markets” status, and called Russia’s equity markets “uninvestable” in the wake of harsh sanctions. Fitch on Wednesday downgraded Russia's sovereign credit rating by six notches to "junk" status, saying Western sanctions over the invasion of Ukraine made it uncertain Russia could service its debt and would weaken its economy in "a huge shock" to its creditworthiness.
India's exports jump by 22.36% to $33.81 bn in February
Data released by the Commerce and Industry Ministry on March 2 showed outbound trade rose 22.36 percent to $33.8 billion in February, up from $27.63 billion in February 2020. However, export growth in the latest month came down from the 38.9 percent rise seen in December 2021, and 23.7 percent in January 2022. Imports in February rose by 35 percent to $55 billion.
Currency outlook
On the daily technical chart a pair crossed its trend line resistance of 75.1500. MACD is showing positive divergence on the daily technical chart and RSI is also fetching above 60 levels. As per the daily technical chart, we observed that a pair crossed its trend line resistance and showing strength on the daily technical chart, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Looking at the technical set-up, we expect a pair could test its resistance levels of 76.1000-76.3500 in the upcoming sessions; support is placed at 75.1500.
Bullion outlook
Gold and silver plunged on Wednesday after the dollar index gained and reached to two year highs. The USADP non-farm employment data released on Wednesday were also better than expected. 4,75,000 new jobs were created against expectations of the 3,75,000 jobs. However, dovish comments of the Federal Reserve Chairman in its testifies with the US. house panel supported precious metals at lower levels. He favour 0.25 percent rate hike in March meeting against 0.50 percent expected earlier. Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect both precious metals could show strength again in today’s session, Gold could test $1,945 per troy ounce and silver could also test $25.55 per troy ounce levels in today’s session. Gold has support at $1910-1896, while resistance at $1,933-19,45 per troy ounce. Silver has support at $25.00-24.70, while resistance is at $25.40-25.55 per troy ounce. In INR terms gold has support at Rs 50,967–50,641, while resistance is at Rs51,845–52,397. Silver has support at Rs67,217- 66,766 while resistance is at Rs 68,180–68,692."
