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Indian markets could open higher, despite mixed Asian markets today and negative Nasdaq on Wednesday - HDFC Securities

U.S. stocks finished mostly higher Tuesday, led by gains in technology shares, even as long-term government bond yields retreated and economic data showed a surge in consumer prices in March. The 10-year Treasury note yield shed 5 basis points to 1.62%.

Investors also contended with some negative news on the pandemic front after two U.S. public-health agencies requested a temporary halt in the use of Johnson & Johnson’s one-shot COVID vaccine out of “an abundance of caution” due to extremely rare blood-clotting issues in women. Meanwhile, data showed U.S. consumer prices rising in March for the fourth month in a row, with the pace of inflation hitting the highest level in 2½ years.

The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018. U.S. data showed the consumer price index (CPI) in March rose by 0.6% - the most on a month on month basis in more than 8-1/2 years, kicking off what the majority of economists expect will be a brief period of higher inflation.

With the surge in coronavirus cases across the country once again, India is at risk of weakening the economic recovery which poses a credit negative threat, Moody's Investors Service said. "However, the targeted nature of containment measures and rapid progress on vaccinating the population will mitigate the credit-negative impact. Moody's further predicted that the GDP was still likely to grow in the double digits in 2021 given the low level of activity in 2020. U.S. stocks closed mostly lower Wednesday, after the Federal Reserve’s Beige Book pointed to a moderate pace of economic growth this spring, but a slight inflation uptick in 2021.

Losses in technology shares offset gains in bank stocks after financial powerhouses JPMorgan Chase, Wells Fargo and Goldman Sachs kicked off the first-quarter earnings season by beating expectations. Shares of Coinbase, one of the first cryptocurrency exchanges to go public, began trading at $381 a share at 1:25 p.m.

Eastern on Wednesday, after a $250 reference price was established Tuesday afternoon, and pushed as high as $429.54 before ending its first day of trading at $328.28. At the closing price, Coinbase was valued at $85.8 billion on a diluted basis. U.S. crude for May delivery rose 4.9% to settle at a 4-week high of $63.15 a barrel on the NYME.

Daily Technical View on Nifty

Observation: After showing violent decline on Monday, Nifty witnessed an excellent upside bounce on Tuesday and closed the day higher by 194 points. After witnessing a range move in the early-mid part, a sustainable buying has emerged in the afternoon. The Nifty moved up sharply towards the end and closed near the highs.

A long bull candle was formed with minor lower shadow. Technically, this pattern indicate a counter attack of bulls from the lows and this could open up more upside bounce in the short term. The sustainable upside bounce of Tuesday has also raised hopes for bulls to show another meaningful upmove from the important lower support and also lower range of around 14300 levels (previous opening upside gap of 2nd Feb and previous swing lows). Previously, the market witnessed sustainable upside bounces from near this support towards the highs of 14900 levels. Hence, there is a possibility of history repeating again.

Technically, the false downside breakout of the lower range at 14300 could signal chances of Nifty testing upper range of around 14900 levels in the near term. Follow-through upmove from here is expected to confirm this pattern. Nifty on the weekly chart has sustained the weekly 20 period EMA at 14200 levels and showed intraweek upside bounce so far from the lows. Further upmove from here could regain the area of previous broken support of weekly 10 period EMA around 14650 levels. This is going to be positive for the markets

Conclusion: The absence of follow through weakness on Tuesday and a strong comeback of bulls from the lower supports could mean more upside in the short term. The formation of present pattern and the confirmation in the next sessions (follow-through upmove on Thursday) could eventually indicate a revisit of the upper range of 14800-14900 in the coming weeks. Immediate support is placed at 14420

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