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Indian markets could open flat to mildly higher, following mixed Asian markets today and despite higher US markets on Monday - HDFC Securities 

US stock-market benchmarks swept to fresh highs on Monday on another round of good economic news from the services sector, adding to the array of indicators showing improving activity, including a stellar March jobs report from last Friday. Shares of Facebook Inc., Google parent Alphabet Inc. and Microsoft Corp. closed at record highs Monday, cresting a wave of strong U.S. job growth last month despite a wave of criticism over their outsize influence on the economy and in the lives of Americans.

On Monday, the Institute for Supply Management said its services index jumped to 63.7% in March, its highest since 1997, from 55.3%. Orders for U.S. manufactured goods fell 0.8% in February. This was the first decline since the depth of the coronavirus recession last April. Orders were up 2.7% in January. Economists were expecting a 0.6% decline in February factory orders.

U.S. crude futures slid $2.80, or 4.6%, to settle at $58.65 a barrel on the NYME after OPEC+ eased production curbs. In precious metals, the most active futures contract for gold closed fractionally higher, up 40 cents to settle at $1,728.80 an ounce on Comex as investors rotated to riskier assets.

The prospect of a sharp economic recovery, powered by a $1.9 trillion COVID aid package, with President Joe Biden also backing a $2.3 trillion infrastructure program, has also stoked worries that the economy may overheat and compel the Federal Reserve to raise interest rates sooner than initial projections for 2023 or 2024. Treasury Secretary Janet Yellen called for a global minimum corporate tax as she supports the Biden administration’s efforts to finance its infrastructure plan.

Asian equities are mixed but largely higher on Tuesday after the S&P 500 and Dow indexes set records on Monday as a streak of strong U.S. economic data fueled optimism even as a smallerthan-expected climb in 10-year Treasury notes eased inflation concerns. A recovery in China’s services sector picked up speed in March as firms hired more workers and business optimism surged, although inflationary pressures remained, a private sector survey showed on Tuesday.

The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 54.3, the highest since December, from 51.5 in February, well above the 50-mark that separates growth from contraction on a monthly basis. Indian benchmark equity indices began the new trading week on April 05 on a negative note, as rising coronavirus cases kept a check on investor sentiment. At close, the Nifty 50 index ended 1.5% or 230 points lower at 14,637.

On April 05, Nifty filled the upgap made on March 30 in the morning weakness. Severely adverse advance decline ratio suggests broad nervousness in the markets. RBI’s credit policy and Q4 earnings numbers create some added uncertainty for traders when Covid cases are on the rise. Indian markets have underperformed severely. Nifty could remain in the 14471-14814 band for the next few days with downward bias.

Daily Technical View on Nifty

Observation: After showing a sustainable upside bounce on Thursday, Nifty witnessed sharp fall on Monday and closed the day lower by 229 points amidst a recovery from the lows. A sustainable intraday upside recovery has emerged from a day's low of 14459 and Nifty finally closed the day by erasing some of intraday loss. A long negative candle was formed on Monday on the daily chart with lower shadow. This indicate a sharp profit booking from the highs-resistance and the emergence of buying from the lower supports.

The crucial overhead resistance of around 14880 has proved to be a tough task for the market as of now (resistance as per change in polarity), we observe that the market not able to sustain above this hurdle for the second occasions recently, despite closing at the edge of it.

Nifty as per intraday timeframe like 60 mins has formed a promising upside reversal pattern on Monday afternoon and showed upside bounce from the lows. Currently, this upside bounce has been facing stiff resistance around 14680 levels and a decisive move above this area could pull market to retest the crucial upper resistance of around 14880 levels again in the coming sessions.

The Monday's sharp weakness has not changed the sentiment as per daily chart. The long lower shadow on the daily candle signal chances of Nifty moving up again to retest the key overhead resistance of 14900 levels again in the next few sessions. A sustainable move only above 14900 could open more upside for the near term.

Conclusion: The short term trend of Nifty is range bound around 14900-14400. The pattern of selling at resistance and buying at support continued. Present daily and intraday chart setup signal chances of yet another upside bounce towards 14900 levels again in the short term, before showing another round of weakness from the highs. Intraday resistance is now placed at 14700.

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