Sensex starts on a cautious note; Nifty50 holds above 8,700

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NEW DELHI: The S&P BSE Sensex started on a cautious note on Friday but with a positive bias led by gains in ITC, Tata Motors, ONGC, RIL, Axis Bank, and HUL.

The Nifty50 pared morning gains but was still trading above its crucial support level of 8700 supported by gains in realty, oil & gas, metal, and auto stocks.

At 09:20 am: The 30-share index was trading 2 points higher or 0.01 per cent at 28,109. It touched a high of 28,155.68 and a low of 28,106.41 in morning trade.

The Nifty50 was trading at 8,704 down 0.1 point or 0.01 per cent. It touched a high of 8,722.25 and a low of 8,703.35 in the first 30 minutes of trade.
The S&P BSE Midcap Index was up 0.39 per cent and BSE S&P Smallcap Index was trading 0.29 per cent up.

ONGC (up 1.1 per cent), Tata Steel (up 0.76 per cent), ITC (up 0.65 per cent), Tata Motors (up 0.60 per cent), and GAIL India (up 0.54 per cent) were the major Sensex gainers.

Infosys (down 0.52 per cent), SBI (down 0.37 per cent), Asian Paints (down 0.38 per cent) and HDFC (down 0.37 per cent) were the major Sensex losers.

The domestic equity indices are likely to trade on a flat note on Friday, tracking a rise in crude oil prices in overnight trade. The upside may remain capped as data showed US citizens filing for unemployment benefits fell unexpectedly last week to a near 43-year low, which raised the prospects of a Fed rate hike.

Investors will keenly await data from Japan’s leading index, Britain’s industrial production and US non-farm payrolls later in the day.

Who spread rumours on ECB tapering? ECB chief economist Peter Praet on Thursday said tapering of ECB’s bond-buying programme this early would halt the economic recovery and that the central bank was committed to providing stimulus. “We, therefore, remain committed to preserving the very substantial amount of monetary support that is embedded in our staff projections and remains necessary to secure a return of inflation to (target),” Reuters cited Praet as saying at an event in Washington.

Cues from Singapore muted: At 7.30 am, Nifty50 futures on the Singapore Stock Exchange were trading 3 points lower at 8,737.50, indicating a flat opening for the domestic market.

“If investors are sitting on cash, then maybe it is advisable to just wait for a correction and then look at increasing exposure. But if you more or less fully invested, then you can just remain invested and not liquidate at these levels especially that is for the long term. Although corrections are expected, they will be short and recovery also will be fast. They will not give you an opportunity to get into stocks,” said Dipan Mehta, Member, BSE & NSE.
Nifty50 faces resistance at 8,800: Expert said the Nifty50 has been facing strong resistance at around 8,800 level and it will be a key hurdle for the index over the next three to four sessions.

“We have been maintaining our negative stance on the market and we have already created shorts somewhere between 8,060 and 8,070 levels two days back. We hold our view that the 8,825 level has become a very strong resistance. As long as the Nifty50 remains below 8,825 on a closing basis, we would see selling pressure at higher levels,” said Sameet Chavan, Angel Broking.

Crude oil prices hit 4-month high: Reports of Opec members considering more production cuts than expected and a drop in US weekly crude inventories pushed crude oil prices to a four-month high of Thursday. Brent crude oil jumped by $0.65, or 1.3 per cent, to $52.51 a barrel. US WTI crude ended higher by $0.61, or 1.2 per cent, at $50.44.

Asian markets stay lower: The Chinese market is closed for the day on account on National Day celebrations. Japan’s equity benchmark Nikkei was trading 0.23 per cent lower at 16859 on Friday morning. Other Asian indices, including Hong Kong’s Hang Seng (down 0.41 per cent), South Korea’s Kospi (down 0.21per cent) and Taiwan’s TWSE (down 0.29 per cent), were trading lower.

US markets settled flat: The Dow Jones Industrial Average index declined 12.53 points, or 0.07 per cent, to close at 18,268.5. The S&P500 index inched 1.04 points, or 0.05 percent, up at 2,160.77. The Nasdaq Composite index fell 9.17 points, or 0.17 per cent, to 5,306.85