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Indian markets could open lower, in line with largely negative Asian markets today and despite positive US markets on Thursday- HDFC Securities

U.S. stocks recorded modest gains on Thursday, but the S&P 500 index ended at a new record, after a round of upbeat earnings reports from technology heavyweights and data confirming a surge in GDP growth in the first quarter. Corporate earnings remained strong, with Apple and Facebook delivering much stronger-than-expected results late Wednesday. The yield on the 10-year Treasury note rose 1.8 basis points to 1.639%.

Us’ first-quarter GDP hit an annualized rate of 6.4%, a sign that the U.S. economy began 2021 with an acceleration of commercial activity. This is compared to 4.3% pace in the fourth quarter and 6.7% growth forecast by economists. Personal consumption, the biggest part of the economy, surged an annualized 10.7%, the second-fastest since the 1960s.This growth came as the government gave money to mostly lower-income households, fueling consumer spending and setting the course for what is expected to be the strongest performance this year in nearly four decades. Initial jobless claims last week totaled 553,000, just above the 528,000 estimate issued by Dow Jones and 566000 the previous week. Pending U.S. home sales rose 1.9% in March, less than expected.

The Bank of England is likely to ease its foot off the stimulus pedal and reduce its pace of bond purchases next week as Britain's economy appears to be bouncing back sharply from its COVID pandemic slump. It is scheduled to meet on May 06.

Copper topped $10,000 a metric tonne for the first time since 2011, nearing that year’s record high as the global recovery stokes demand and mines struggle to keep up.

Asia-Pacific markets traded mostly lower on Friday as investors turned cautious. China’s factory activity expanded at a slowerthan-expected pace in April, although strong demand for manufacturing helped sustain growth in the sector. The official manufacturing Purchasing Manager’s Index (PMI) fell to 51.1 in April from 51.9 in March. The official non-manufacturing Purchasing Managers’ Index (PMI) slipped to 54.9 from 56.3 in March. The official April composite PMI, which includes both manufacturing and services activity, fell to 53.8 from March’s 55.3. In Japan the final au Jibun Bank Japan PMI rose to a seasonally adjusted 53.6 in April, its most robust expansion since February 2018.

Indian Benchmark equity indices ended with marginal gains on April 29 after giving up most of the opening gains. At close, the Nifty was up 30.40 points or 0.20% at 14,894.90.

Nifty failed to hold above 15000 level. Negative advance decline ratio suggests some caution among market participants. 15050 could be a resistance on the up for the Nifty while 14695 could act as a support. Going by the slow fall seen so far, it seems that Nifty has not yet made a top in this upmove.

Daily Technical View on Nifty

Observation:

After showing a sharp upside momentum in the last couple of sessions, Nifty struggled to sustain highs after the opening gains on Thursday and closed the day with minor gains of 30 points.

Nifty opened on an upside gap of 115 points, Nifty made an attempt to move up further soon after the opening. Intraday weakness got triggered from the day's high of 15044 levels in the morning and the market slipped into intraday weakness from there on. Minor upside recovery attempt was not successful and the Nifty closed near the lows

Small body of negative candle was formed with upper and lower shadow. Technically, this pattern indicate a formation of high wave type candle pattern and this signal volatility in the market and confused state of mind among participants near the resistance. Such high wave type formations after a reasonable rise or near the hurdles some time signal profit booking/downward correction from the higher levels.

The overall chart pattern of Nifty remains strong on the upside and we expect any decline from the hurdle could be a buying opportunity. The expected weakness is expected to form a new higher bottom of this rising swing. The crucial overhead resistance of 14900-15000 levels (previous swing highs and resistance as per change in polarity) could eventually be broken decisively on the upside after the consolidation or repeated attempt.

Conclusion: The short term uptrend status of Nifty remains intact and the present minor negative setup at the resistance is unlikely to change the bullish sentiment in the market.

Any decline from here down to 14800-14700 is going to be a buy on dips opportunity (higher bottom formation) and the market could retest the upper 15K mark in the near term.

Nifty – Daily Timeframe chart

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