WORLD EQUITIES REBOUND AS OIL STABILIZES, GREEK WORRIES EBB; NIFTY FIND SUPPORT AROUND 8050 AS EXPECTED

WORLD EQUITIES REBOUND AS OIL STABILIZES, GREEK WORRIES EBB; NIFTY FIND SUPPORT AROUND 8050 AS EXPECTED

WORLD MARKETS                             

US indices surged a percent and fifth yesterday, with the S & P 500 rebounding from a five-session dip, as oil rebounded, concerns eased about a Greek exit from the European Union and investors offered a favorable reaction to minutes from the Federal Reserve.

After four sessions of losses, Nymex crude settled 1.5% or 72 cents higher yesterday at $48.65 per barrel. Brent rose 5 cents to $51.15 after earlier falling below $50 for the first time since May 2009.

Germany left open the door to discussing options with Greece's next government on its debt, easing worries about a Greek departure from the euro zone.

The release of the Federal Reserve's December meeting minutes, which indicated the Fed wasn't ready to hike for at least the next couple of meetings, also lifted sentiment.

Private employers added 241,000 jobs to their payrolls in December, surpassing projections of a 226,000 gain, according to the ADP National Employment report.

European markets, except a 0.1% lower Italy, gained between 0.2%-0.8%. Eurozone inflation for December came in at negative 0.2%, dipping in the territory for the first time since 2009, adding more pressure on the ECB to launch a US fed style bond buying program.

AT HOME

Benchmark indices ended lower by three tenth of a percent after a choppy trading session, extending the losing streak to third straight day. Sensex lost 79 points to settle at 26909 while Nifty finished at 8102, down 25 points. BSE mid-cap and small-cap indices ended flat. BSE Metal index and Bankex lost 1.4% and 0.6% respectively, becoming top losers among the sectoral indices while Oil & Gas index was the top gainer, up 1.4%, followed by a 0.3% rise in the Consumer Durable index.

FIIs net sold stocks, index futures and stock futures worth Rs 1073 cr, 217 cr and 193 cr respectively. DIIs were net buyers to the tune of Rs 601 cr.

Rupee appreciated 40 paise to end at 63.17/$.

OUTLOOK

Today morning, barring a half a percent lower Shanghai, other Asian markets are trading with gains ranging from 0.5% to 1.5% and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that a trendline adjoining bottoms made in October and December 2014 lands a support around 8050 and the lower bad of bollinger on the daily chart is also placed around that level and had therefore advised booking profits in short positions as 8050 approaches.

Nifty, after touching a low of 8065, rebounded to end at 8102 and is set to open higher today, giving more credence to the 8050 support.

On the way up, 8211, the 38.2% retracement level of the recent 8446-8065 fall, would be the first hurdle above which 8300, the 61.8% retracement level, would be the next resistance.

Traders can play for the pullback but book profit above 8211. Fresh shorts should be created only below 8050.