NIFTY SET TO SOAR ON MOODY’S UPGRADE; 10340 NEXT HURDLE

NIFTY SET TO SOAR ON MOODY’S UPGRADE; 10340 NEXT HURDLE

WORLD MARKETS                             

Dow and S & P 500 climbed 0.8% each while Nasdaq soared 1.3% after House Republicans passed a tax reform bill and strong quarterly results from Wal-Mart and Cisco. Nasdaq hit intraday and closing records.

U.S. House Republicans passed a bill to cut taxes on businesses and individuals, the biggest step yet in the GOP's effort to alter the country's tax system. The House plan cuts the corporate tax rate to 20% from 35% and lessens the number of personal tax brackets to four from seven.

Industrial production grew 0.9% in October, compared to the 0.5% forecast.

Oil extended the fall with Brent down 0.8% to $61.36 per barrel and WTI off 0.3% at $55.14 on increasing U.S. production and inventories.

European markets gained 0.2%-0.8%. Retail sales numbers in the U.K. came in higher-than-expected, showing an increase of 0.3% month-on-month in October. A second reading of euro zone inflation showed the headline annual inflation rate at 1.4% in October.

AT HOME

After a marginally higher start, benchmark indices saw a sustained northward move through the session to end with gains of nearly a percent and broke three-day losing streak. Sensex soared 346 points to settle at 33107 while Nifty finished at 10215, up 97 points. BSE mid-cap and small-cap indices gained 1.1% each. All the BSE sectoral indices ended in green with IT index leading the tally, up 2.2%, followed by 1.3% higher Power and Telecom indices.

FIIs net sold stocks, index futures and stock futures worth Rs 447 cr, 75 cr and 499 cr respectively. DIIs were net buyers to the tune of Rs 847 cr.

Rupee depreciated 11 paise to end at 65.32/$.

Aiming to boost sales of affordable houses, the cabinet yesterday approved an increase in the carpet area of houses eligible for interest subsidy under credit linked subsidy scheme (CLSS) for the middle income group under the Pradhan Mantri Awas Yojana (Urban).

OUTLOOK

Today morning, Shaghai is down about half a percent but Nikkei and Hang Seng are up 1.5% and 0.8% respectively.

In a significant development rating agency Moody's has upgraded the Government of India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive, citing continued progress in the nation’s economic and institutional reforms.

Owing to this news, SGX Nifty is suggesting a 90 points higher start for our market.

In yesterday's report we had mentioned that 10090, the 50% retracement level of the 9690-10490 upmove, is the immediate support and 10250 is the immediate hurdle.

Nifty yesterday soared 97 points to settle at 10215, and a higher opening today would take it close to 10300 mark.

10340, the 61.8% retracement level of the recent 10490-10090 fall, is the immediate hurdle on the way up above which 10490 itself would be the next target to eye.