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Indian markets could open flat, following flat to mildly negative Asian markets today and despite positive Nasdaq on Thursday - HDFC Securities

The S&P 500 index carved out its 19th record close in 2021 on Thursday, with technology shares leading stock-market gains, as investors digested comments on the global economy from Federal Reserve Chairman Jerome Powell. 10-year

Treasury yields have stopped climbing higher, despite signs of a strengthening economy, that’s given investors a bit of relief (10 year yields now at 1.63% vs recent high of 1.77%) and helped to boost technology stocks again. Fed Chairman Powell repeated his expectation that a rise in inflation this year would be temporary at a webinar on the global economic outlook hosted by the International Monetary Fund on Thursday.

Investors processed a worse-than-expected reading on the latest weekly jobless claims. A total of 744,000 Americans filed for unemployment benefits for the first time during the week ended April 3. Economists polled by Dow Jones expected first-time claims to total 694,000.

Gold futures finished higher, with the June contract climbing $16.60, or nearly 1%, to settle at $1,758.20 an ounce on Comex, around a six-week high.

Asian equities are set for a choppy trading session on Friday after technology stocks lifted the S&P 500 to a new record even as investors weighed an unexpected rise in the number of Americans filing new claims for unemployment benefits.

China’s factory gate prices rose at their fastest annual pace since July 2018 in March, as growth in the world’s second-largest economy continued to gather momentum. China’s producer price index (PPI) rose 4.4% in annual terms. This compared with a median forecast for a 3.5% rise in a Reuters poll of analysts and a 1.7% rise in February. China’s consumer price index (CPI) rose 0.4% from a year earlier in March, the statistics bureau said in a separate statement, compared with a median forecast for a 0.3% rise in a Reuters poll and a 0.2% decline in February.

Indian benchmark equity indices gained for the third straight day on April 08 – the longest such streak in a month - , however, weekly F&O related volatility dragged the indices lower from their intra day highs. At close, the NSE Nifty 50 index rose 0.4% to end at 14,873.

Nifty rose during the day on April 08 but gave up a big part of their gains towards the end. In the result it has formed a long legged doji post a minor rise. This suggests mild caution on the part of participants. On upmoves 14984-15050 band could provide resistance to the Nifty while 14716-14821 band could provide support.

Daily Technical View on Nifty

Observation: After showing a sustainable upmove on Wednesday, Nifty moved up on Thursday with high volatility and closed the day higher by 54 points. After opening on an upside gap of 56 points on Thursday, Nifty moved up further in the earlymid part of the session, before shifting into a consolidation movement with buy on dips opportunity.

Sharp intraday weakness got triggered from the day's high of 14984 in the afternoon and Nifty slipped into weakness and filled the opening upside gap completely. The market closed the day with upside recovery note. A doji type candle was formed on the daily chart (upper and lower shadow with almost identical open and close) at the swing high of 14984, which indicate a possibility of false upside breakout of the resistance.

The resistance as per change in polarity and previous swing highs was broken on the upside at 14880 as per intraday and Nifty sustained above this area for the better part of the session. But the weakness of later part of Thursday has pulled the market down and Nifty closed at the edge of this area at 14873.

The false upside breakout attempt is not a good sign and a formation of doji after a reasonable upmove as per daily chart could mean a sign of confusion at the swing highs. This could also be considered as a lack of strength in the market to sustain above the resistance. Hence, a decisive move above 14950 could only open more upside for the market ahead.

Conclusion: The short term trend of Nifty is still positive, but the market seems to have has started to show lack of strength to witness upside breakout of 14900. If Nifty fails to move/sustain above 14950 in the next 1-2 session, then one may expect beginning of another round of downward correction from the highs. Immediate support is placed at 14780.

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