NIFTY PLUNGES TO 8130, VINDICATES OUR VIEW
US indices soared 1.1%-1.3% yesterday after the Fed kept rates unchanged but signaled that a December rate hike was still on the table.
In September, the Fed cited the potential impact from "recent global economic and financial developments" as a reason to hold off raising rates. But the October statement downplayed concerns about global economic developments.
Gains were led by financials followed by energy sector. Apple jumped 4% following earnings that beat expectations on both the top and bottom line.
Weekly mortgage applications fell 3.5%.
Nymex oil surged 6.3% to $45.94 a barrel, breaking three day losing streak.
Dollar index climbed to 97.60 from 96.98, marking the highest close since August 7. Euro weakened below $1.10. Gold, after touching a high of $1183 before the Fed statement, plunged to $1156, down a percent from the previous close.
European markets climbed 0.9%-1.4%
After a gap down opening, benchmark indices saw a further fall through the session to end with cuts of eight tenth of a percent, extending the losing streak to third straight day. Sensex settled at 27040, down 214 points while Nifty lost 62 points to finish at 8171. BSE mid-cap index lost 0.6% while the small-cap index ended flat. BSE Bankex tumbled 2.5%, becoming top loser among the sectoral indices, followed by 1.5% cut in Power index. Consumer Durable index gained 1.6%, becoming top gainer, followed by 0.4% each gain in IT and Teck indices.
FIIs net sold stocks, index futures and stock futures worth Rs 731 cr, 1281 cr and 1315 cr respectively. DIIs were net buyers to the tune of Rs 160 cr.
Rupee appreciated 5 paise to end at 64.9175/$.
Ambuja Cements posted 36% dip in quarterly net profit at Rs 154 cr. Total income fell 4.2% to Rs 2111 cr. Expected figures were Rs 185 cr and Rs 2180 cr respectively. EBIDTA fell 21.1% to Rs 310 cr while margin stood at 14.7%.
Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points lower opening for our market.
In yesterday's report we had mentioned that "A breach of 8217, the low made yesterday, would confirm a sell on the hourly chart and would open up the space for the further downside till about 8100, where the immediate previous bottom on the daily chart is placed" and had advised going short below 8217.
Nifty broke 8217 in the opening trade itself and plunged all the way to 8132 before closing at 8171, vindicating our view.
8090 is where the immediate previous bottom on the daily chart is placed while 34-DMA is placed around 8030. This makes 8090-8030 an important support area as well as the downside target zone.
Immediate hurdle on the hourly chart is placed at 8250, with the stop loss of which trading shorts should be held on to.
Yes Bank, NTPC, Grasim and Dr Reddy will report their quarterly earnings today.