Dow Jones
Nifty 50 turns lower today retreating from two-month highs after India’s Finance Minister Nirmala Sitharaman announced last week a cut to corporate tax rates for domestic companies to 22%. The corporate tax cut will have an immediate impact to stocks as it will increase profitability and now Indian companies can compete with lower taxes other countries. On the macro side the reduction in corporate taxes will increase the fiscal deficit with negative impact on India’s bonds.
Nifty bullish momentum is intact as the index trades above all major daily moving averages and an attempt to higher levels look possible. Nifty has formed a strong floor at 10,681 since August which absorbed all the offers and signalled the rebound which gave the strong rebound last Friday. On the upside, immediate resistance is at 11,655 today’s high while more pressure will be met at 11,700 the two-month highs. On the downside Nifty 50 first support stands at 11,539 today’s low and then at 11,416 the 100-day moving average while more offers will emerge at 11,237 the 50-day moving average. Traders looking to enter long positions can buy if the index closes today above 11,655 daily top, targeting the 12,000 for profits, and can keep their long positions as far the index is trading above the 11,500 mark.
Asian indices trading higher, the Nikkei is 0.09 percent higher at 22,098 as the Yen trades at 107.54. Hang Seng index is 0.16 per cent higher at 26,265 while the Shanghai Composite is 0.26 percent higher at 2,984.