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Indian markets could open mildly higher, following mixed Asian markets today and flat US markets on Wednesday

U.S. stocks closed nearly unchanged Wednesday in lackluster action, after the release of minutes from the Federal Reserve’s March policy meeting showed that central bank staffers were in no hurry to tighten monetary support amid the coronavirus pandemic and were united on the need to see more progress on economic recovery before scaling back their bond-buying program. Traders have scaled back their most-aggressive positioning for the Federal Reserve to start raising rates by the end of next year.

The U.S. trade deficit surged to a record high in February as the nation’s economic activity rebounded more quickly than that of its global rivals and could remain elevated this year, with massive fiscal stimulus expected to spur the fastest growth in nearly four decades. The trade deficit jumped 4.8% to a record $71.1 billion in February. U.S. consumer borrowing accelerated in February and consumers started to use their credit cards again as the economy recovered from the coronavirus pandemic. Total consumer credit grew at a 7.9% an annual growth rate, after remaining flat in January.

A second wave of Covid-19 infections is expected to slow India’s economic recovery in the three months between April to June, according to Goldman Sachs. The investment bank on Tuesday lowered India’s growth forecast for the quarter from 33.4% yearon-year previously, to 31.3%. It cited lower consumption and services activity likely due to increased social restrictions that are being put in place by India’s state and federal governments to tackle the new outbreak. Goldman said it expects gross domestic product (GDP) to contract sequentially by 12.2% quarter-onquarter on an annualized basis for the three months ending June — which marks the first quarter of India’s fiscal year that began on April 1 and ends on March 31, 2022.

Capacity utilisation in India’s manufacturing sector improved in the quarter ended December 2020 amid further easing of restrictions. The metric stood at 66.6% in the three-month period, up from 63.3% in the preceding quarter, according to data from the Reserve Bank of India’s “Order Books, Inventories and Capacity Utilisation Survey”. Consumer confidence dipped to 53.3 in March 2021 from 55.5 in January 2021, according to the RBI’s survey on consumer confidence. Future expectations also dipped to 108.8 from 117.1 in the same duration.

Stocks in Asia-Pacific traded mixed on Thursday morning tracking Wall Street's cautious gains on Wednesday.

Indian benchmark equity indices ended higher for the second day in a row on April 07 as benchmark indices saw buying interest in banking, auto and technology names post the MPC meet outcome. At close the NSE Nifty 50 gained 0.92% or 135.5 points to end at 14,819. Indian markets rose the most in the Asian region boosted by the outcome of the MPC meet.

Daily Technical View on Nifty

Observation: After showing consolidation movement on Tuesday, Nifty witnessed sustainable upmove on Wednesday and closed the day higher by 135 points. A sustainable upmove has emerged till afternoon on Wednesday, before showing another round of consolidation at the highs.

A long positive candle was formed on Wednesday on the daily chart with lower and minor upper shadow. Technically, this pattern indicate an upside bounce in the market after one session of sharp weakness of Monday. The crucial overhead resistance of 14880 levels (resistance as per change in polarity) came into scene on Wednesday, as Nifty retested the hurdle by forming a day's high of 14879, before showing minor weakness from the highs.

Previously, in the three occasions the Nifty has witnessed sharp downward reversal from near this resistance area (14880) in subsequent sessions, after closing at the edge of this area in previous sessions. The Nifty has closed again at the edge of this hurdle on Wednesday (made a high of 14879) and there is odds of down side turnaround of Nifty from the highs, as happened in the past. But, a sustainable move above 14900 levels could bring sharp upside momentum back into action.

The formation of broader range movement with minor declines below the hurdle and a formation of consistent higher lows in last three daily candles could signal optimistic view in the market.

Conclusion: The short term trend of Nifty is positive with range bound action. The market is now placed near the make or break - crucial area of 14900 levels.

The short term chart pattern indicate minor intraday weakness or consolidation movement around 14880 levels before showing a sustainable upside breakout in the short term. Immediate support is placed at 14730.

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