Indian equity markets may see a day in red today. Stock price of First Republic Bank fell almost 30% yesterday. Probability of its failure has increased significantly. It saw withdrawal of deposits worth $101 billion in the March quarter. Its failure will exacerbate the US banking crisis and global economic slowdown. Commodity prices fell yesterday as expectation of worsening of economic slowdown strengthened.
US markets saw a late sell-off yesterday as First Republic bank’s stock tanked 30%. This brings the market capitalization of the bank to below US$ 1 billion. Its market capitalization was $ 40 billion one year back. Concerns on regional banks are overshadowing superb results by IT stocks in US. Dow Jones closed lower by 228 points. Nasdaq closed higher by 55 points. US dollar index closed near lows, at 101.4. Oil prices hit 3-month lows. WTI crude oil is now trading at US$ 74 per barrel.
Asian markets have opened in the red today. Japanese ‘Nikkei’ is down by 100 points. Profit booking has taken over there in the last few days. Taiwan and South Korean markets are also seeing some profit booking today. Investors are moving in stocks across sectors & indices. China stocks seem to be in better shape. Consumer spending there could add growth to earnings.
Nifty saw a day of gains yesterday, for 3rd day running. The index closed over 17800 level. Nestle, Power Grid & Tata Consumer led the gainers. Profit booking was seen in Hindalco, Bajaj Auto & Adani Ports. Mid-caps saw another strong day. Nifty Small cap 50 index also closed higher by 0.75%.
Technical View: Nifty is likely to find support at around 17750. 18000 is likely to act as resistance. Bank Nifty is likely to find support at around 42400. 43200 is likely to act as resistance on the upside.
Trading call:(1-14 days) BUY NTPC May future @ 170.5-171.5. Stop loss: 167.55. Target: 175.
Derivative call-time period: (1 month) : BUY Bajaj Auto May future @ 4275-4285. Stop loss: 4194.5. Target: 4375.
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