News and Impact · Expects markets to open on a posit | DK Technical Analysis by Dhananjay Kadam
News and Impact
· Expects markets to open on a positive note on account of rally in the across the global market as hope grew for a U.S. debt ceiling deal. Optimism for a US debt-ceiling deal, fall in US Job data along with Housing data and better than expected Walmart results lifted Nasdaq by 1.5% to close at 13-month high and S&P 500 advance 1% to close 9-month high. Markets expect that Fed will start cutting interest rates in the second half of the year after the US existing Home Sales decreased by 3.4% month-over-month in April. On the other hand, US House Speaker Kevin McCarthy said a debt-limit deal will likely be considered on the House floor next week and told reporters discussions were in a “much better place” than before. A positive earnings outlook from consumer bellwether Walmart Inc. also added fuel in the market sentiment. However, US dollar Index surged to 2-month high and spiked in US 10-year and 2-year bond yield is a concern in the market. Asian markets open on a positive note and marginally gain US Future. SGX Nifty advance quarter percent today. Yesterday, Nifty declined over half percent from the intra-day high and fell in the last three trading sessions on account of profit booking. Strong FIIs inflow, good quarterly results and impressive micro data will be positive for the market sentiment. Recent fall (Sensex declined 900 points last 3-day) is a good opportunity to buy on domestic equity. We are positive on banks, auto, NBFC and defense stocks. Both SBI and ITC announced impressive Q4 results yesterday. Defense stocks will be focus after the news that the HDFC Mutual Fund will launch India's first defence fund.
· US Market –. US stocks closed higher on mounting optimism that a debt ceiling deal could be reached within days, with discount retailer Walmart providing additional support after an upbeat
· annual sales forecast. Nasdaq Composite surged 1.5% to close 13-month high while S&P 500 gained nearly 1% to close 9-month high
· Global market summary – Nasdaq closed 13-month high, S&P 500 closed 9-month high, US Dollar Index spiked to 2-month high of above 103, US 10-Year yield surged to 1-month high at 3.63 and over 1-month high of 4.21%. Gold price fell to 6-week low, Japan CPI spiked to 40-year high at 3.4%
· Asian Market – Asian stocks advanced alongside US equity futures on rising hopes that lawmakers in Washington will avert a first-ever US default. Shares in Japan, Australia and South Korea all edged higher by half percent. The advance for the Topix Index placed the gauge of Japanese blue chips on course for its best week since November and a fresh 33-year high.
· European Market – European stocks bounced after two days of losses following Wednesday’s gains on Wall Street, as investors were optimistic about a breakthrough in US debt-ceiling talks. Both Germany and France Index gained 1% higher while UK Index gained 0.3%.
· Oil – Oil declined marginally to below $76/bbl headed on account of slowdown in the global demand and optimism that the US will avert a catastrophic debt default.
· Gold – Gold declined 2% to 6-week low at $1955/ounce (fell to below 20-DMA) as traders tracked talks to resolve the US debt-ceiling impasse and dissected comments from a slew of Federal Reserve officials on the outlook for interest rates.
· Previous Day market Update –Equity benchmark Nifty reverse the intra-day gain and declined for third trading sessions on account of profit in heavyweights ITC, SBI, L&T, Hindustan Unilever and Maruti. Nifty dropped 52 points or 0.3% to end at 18,130 while touched intra-day high of 18297. PSU Bank Index slipped nearly 2% after the banking major SBI announced Q4 results. FMCG index slipped over 1% lower after ITC announced Q4 result which was in line with expectation. Nifty realty index nosedived over 2% followed by pharma, mid-cap and small cap sectors. Sensex declined 129 points or 0.21% to settle at 61,432. Sensex fell 900 points or 1.5% in the three trading sessions.
