STOCKS
Trump’s move to add the Chinese firm Huawei to the list which requires the US companies to get licence to do business with it is weighing on the global equities. Dow and DAX have fallen and has room to further fall. Asians are trading mixed. On the domestic front, it needs to be seen if the impact of the exit polls will continue or not as the Sensex and Nifty have a crucial resistance ahead. SGX Nifty (11872.75, +1.30, +0.01%) is trading stable indicating a flat opening.
Dow (25679.90, -84.1, -0.33%) is turning down after testing the resistance at 26000 which keeps the overall bearish view intact. A dip to 25500-25450 is possible in the near term.
DAX (12041.29, -197.65, -1.61%) has come-off sharply and can revisit 11900 levels again. A strong close below 11900 will be bearish for a fall to 11600 and 11500 on the back of profit booking.
Nikkei (21218.54, -83.19, -0.40%) has declined below its support at 21250 thereby negating the chances of a rise to 21500-21750 mentioned yesterday. Now, while below 21250, a fall to 21000-20900 is possible.
Contrary to our expectation to break 2850 and fall to 2800, Shanghai (2885.60,+15, +0.52%) has bounced from a low of 2838. The sideways move is still intact. While above 2850, a rise to 2950 is possible in the coming sessions.
Nifty (11828.25, 421.10, 3.69%) has resistance at 11860 which needs to be broken to see further rise too 11900 and 12000 levels. While below 11860, a pull-back to 11700 cannot be ruled out.
Similarly, Sensex (39352.67, +1421.90, +3.75%) has resistance at 39600 which if holds can trigger a pull-back move to 39000 and 38500
COMMODITIES
Gold remains subdued but stable. Silver can see a correcitve bounce before further fall. Copper is consolidating within its overall downtrend. Oil remains higher but is not gaining momentum for further rise.
Gold (1276.1) trades stable below 1280. While below the immediate resistance at 1280, a fall to 1270-1265 can be seen in the near term.
Silver (14.42) is getting support near 14.35. While it sustains above this support, a corrective bounce to 14.60 is possible before we see a fresh fall.
Copper (2.74) is consolidating between 2.71 and 2.78 within its overall downtrend. The bias is bearish for it to break below 2.71 and fall to 2.68 in the coming days.
WTI (63.58) is struggling to breach 64. It might consolidate between 62 and 64 for some time. But while it remains above 62, the bias is bullish for it to break 64 and rise to 65 in the near term.
Similarly, Brent (72.34) lacks strong follow through buyers above 73. It has support at 71 and while it holds, a rise to 74 can be seen in the near term.
FOREX
Overall the currency pairs are almost stable near levels seen yesterday. Some sideways ranged movement is possible just now before the currencies pick up near term trend. US dollar could see some more strength in the near term.
Dollar Index (97.97) has paused near 98 and could see some sideways movement within 98.0-97.70 region before attempting a rise towards daily resistance near 98.50.
Euro (1.1164) has also paused and is trading above 1.1150. We could see some ranged movements before the currency attempts a test of 1.1100 or a further fall on the downside.
Euro-Yen (122.99) could face immediate rejection from very near term resistance at 123.20 which if holds could push Euro-Yen back to 122. A few sessions of sideways trade between 122-123.20 is possible before the pair moves up sharply beyond 123.20 in the medium term.
Dollar Yen (110.19) is likely to move up slowly towards 111 in the near term. View is bullish for the next few sessions.
Aussie (0.6911) is almost stable near levels seen yesterday. The bounce from 0.6865 is holding well for now and could take Aussie slowly towards 0.6960-0.7000 in the medium term.
Pound (1.2728) has bounced back slightly and while above 1.27, the currency could slowly pick up upward momentum and attempt to rise towards 1.28 or higher in the longer run. The EU Parliamentary elections on Thursday would be important to watch. We do not prefer a fall below 1.27 in the near term.
USDCNY (6.9012) is coming off just now from the high of 6.9186 seen yesterday and while that holds, we could see the corrective dip to extend towards 6.86/85 levels.
USDINR (69.7350) opened with a sharp gap-down yesterday contrary to our expectation to test 69.75 on the downside as exit polls were in favor of the current ruling party bringing in more hope. The pair rose back to close at 69.7350 yesterday. Immediate resistance is seen near 69.75/80 and while that holds, USDINR could come off towards 69.50/40 again today. A break of 69.75 could be seen later during the day or tomorrow taking the pair to higher levels of 70.00-70.10. We warn to remain cautious for the next 2-3 sessions before the actual election results are out on 23rd May, Thursday.
INTEREST RATES
The US yields have risen contrary to our expectation of a further fall. The 30Yr (2.84%), 10Yr (2.43%) and 5Yr (2.21%) are up slightly. While the overall trend is downward, we could see some upmove in the very near term. The 30Yr could rise towards 2.87% while the 10Yr and 5Yr could rise towards 2.47% and 2.27% respectively before again falling from there.
The Indian 10Yr GOI (7.4099%) closed lower yesterday and could probably test 7.35% on the downside before bouncing back towards 7.40/45% in the medium term.
The UK yields have bounced slightly contrary to our expectation of a fall as Pound recovers a bit from 1.27. The 5Yr (0.78%), 10Yr (1.06%) and 20Yr (1.52%) are up about 2bps and could see some more upmove over today and tomorrow before the EU Parliamentary elections on Thursday.
The German 10Yr (-0.084%) could move up towards 0% before again coming off from there. Medium term looks bearish.
