ECB boost couldn’t hold Markets. How will Nifty react?

To boost the European Economy, the European Central Bank announced a hefty stimulus package, on Thursday. Though the stimulus was better than expected, the  markets across the globe reacted adversely.

The reduction in all the three main interest rates by the European Central Bank has further pushed the deposit rate into the negative territory from -0.3 to -0.4 in order to boost inflation. The bond buying program was also expanded from 60bn Euros to 80bn Euros per month. ECB Chief Mario Draghi has included the non finance Corporate Bonds of Euro Area in addition to Government Bonds, in purview of its bond buying program.

Following the ECB's announcement, ECB Chief Mario Draghi stated at a press conference "Rates will stay low, very low, for a long period of time and well past the horizon of our purchases”. He further added "From today's perspective and taking into account the support of our measures to growth and inflation, we don't anticipate that it will be necessary to reduce rates further. Of course, new facts can change the situation and the outlook."

The European Markets rallied sharply in early hours but were soon trading in the red zone. Global Indices like Nasdaq, FTSE 100, DAX, CAC 40, Nikkei 225 have also closed in the negative zone. However, Hang Seng, Kospi,  SGX Nifty have all managed to pull themselves up to the positive zone this morning.

We saw a positive sentiment from the buyers in the Indian bourses this morning. Currently Nifty Share Price is trading at 7536, up by 50 points (10:49 IST).

The Top Nifty 50 Gainers for the day are Adani Ports, Axis Bank, BPCL etc., whereas Sun Pharma, Tech Mahindra, Tata Steel are among the Top Losers for the day.

Following the ECB's announcement, ECB Chief Mario Draghi stated at a press conference "Rates will stay low, very low, for a long period of time and well past the horizon of our purchases”. He further added "From today's perspective and taking into account the support of our measures to growth and inflation, we don't anticipate that it will be necessary to reduce rates further. Of course, new facts can change the situation and the outlook."

The European Markets rallied sharply in early hours but were soon trading in the red zone. Global Indices like Nasdaq, FTSE 100, DAX, CAC 40, Nikkei 225 have also closed in the negative zone. However, Hang Seng, Kospi,  SGX Nifty have all managed to pull themselves up to the positive zone this morning.

Lets take a glance into Nifty’s Previous Day Activity

Yesterday we saw a selling of 133 points in Nifty Futures till the low of 7435 and closed at 7486. Nifty Future had opened at 7550, made a high of 7550.

FII Buy/Sell activity in Index Futures shows that FIIs have built long positions worth 3230 Crores since March 1st. Yesterday FII were seen making negative position of 28 crores. In the last 5 days highest position of FII was on 8^th March 2016 at 803 crores and the lowest being yesterday, of (-) 28 crores.

Fresh buying positions have been built in the strikes of 7500, 7800 and 7700. Put buying has happened in the strikes of 7100, 7200 & 7400. & 7500.

Small Cap Index Outlook

Small Cap Index traded in a narrow range of 70 points. The Index  is trading at 4790 with an immediate target of 4857. The ECB yesterday increased its stimulus package. Markets reacted negatively to the announcement since Draghi added that there would not be any further reduction in the interest rates. We might see a profit booking after SmallCap tests its recent highs of 4857.

We recommend the following Stocks to watch out for Today

Scrip	Sector	LTP	% Rise	% Fall	% Budget rise
HIMATSEIDE	TEXTILES AND APPAREL	185.95	5%	-30%	26%
LLOYDELENG	HOUSEHOLD GOODS	216.75	10%	-41%	22%
NILKAMAL	HOUSEHOLD GOODS	1103.4	25%	-23%	14%
GRANULES	PHARMACEUTICALS	127.45	-2%	-27%	20%
NOCIL	CHEMICALS	45.45	19%	-32%	17%
TVTODAY	MEDIA AND PUBLISHING	305.6	39%	-10%	3%

• % RISE  is movement of share from 9^th Nov to 4^th Jan 

• % FALL is movement of share from 4^th Jan to 29^th Feb

• % RISE is movement of share from 29^th Feb to Last Traded Price

Though Nifty is trading positive since morning, a continous movement upward is unlikely as Nifty faces monthly resistance of 7600. Markets will be clearer after a few trading sessions.