US EQUITIES STAGE MAMMOTH COMEBACK; EXIT POLLS IN FOCUS AT HOME

US EQUITIES STAGE MAMMOTH COMEBACK; EXIT POLLS IN FOCUS AT HOME

WORLD MARKETS

After falling nearly 3%, US indices made a spectacular comeback after news broke that the Federal Reserve could tighten monetary policy at a slower pace than previously expected, to end mixed with modest changes. Dow and S & P 500 ended lower by 0.3% and 0.2% respectively while Nasdaq rose 0.4%.

The Wall Street Journal reported that the U.S. central bank is considering whether to signal a wait-and-see approach to rate hikes at its upcoming meeting this month. The report said Fed officials do not know what their next move on rates will be after December.

The initial fall was attributed to news of the arrest of Huawei CFO Meng Wanzhou in Canada reportedly over the possible violation of sanctions against Iran. She faces extradition to the U.S. The arrest decreases the likelihood that a permanent U.S.-China trade deal will be reached.

US crude tumbled 2.7% to $51.49 a barrel and Brent fell 2.9% to $59.79 as OPEC reportedly agreed to cut production, but delayed making a decision on how deeply it would cut production until after it meets with Russia on Friday.  

The U.S. economy added 179,000 private jobs in November, below an estimate of 195,000, according to a report from ADP and Moody's Analytics.

European markets tumbled 3.2%-3.5%

AT HOME

Sensex and Nifty nosedived 1.6% and 1.7% respectively, extending the losing streak to third straight day and suffering the worst fall since 11th October, 2018. Sensex settled at 35312, down 572 points while Nifty tumbled 181 points to finish at 10601. BSE mid-cap and small-cap indices fell 1.5% and 1.4% respectively. All the BSE sectoral indices ended in red with Energy index leading the tally, down 2.4%, followed by 2.3% lower Auto and Realty indices.

FIIs net bought stocks worth Rs 72 cr but net sold index futures and stock futures worth Rs 1722 cr and 1047 cr respectively. DIIs were net sellers to the tune of Rs 390 cr.

Rupee closed at 70.90/$, depreciating 44 paise compared to previous close.

Fitch Ratings cut India's FY19 GDP growth forecast to 7.2% from 7.8%. The rating agency has also cut growth forecasts for FY20 and FY21 to 7% from 7.3% and 7.1% from 7.3%, respectively.

OUTLOOK

Today morning, Asian markets are trading with modest gains and SGX Nifty is suggesting about 50 points higher start for our market.

For past couple of sessions We had been mentioning that the 200-DMA, placed around 10750, is the immediate support and had given downside target of 10675 below that.

Nifty broke 10750 yesterday and plunged all the way to 10588 before closing at 10601 and is set to open around 10650 today.

10588, the low made yesterday, roughly coincides with the 38.2% retracement level of the entire 10004-10941 upmove and hence is the immediate support to eye. Below 10588, 34-DMA, placed around 10530, would be the crucial support to eye.

10747-10722, the gap created by yesterday's gap down opening, would now act as the immediate hurdle, with the stop-loss of which, trading shorts can be held on to.

Rajasthan and Telangana will poll for assembly elections today and exit polls for all the five assembly elections-Rajasthan, Telangana, Madhya Pradesh, Mizoram and Chhattisgarh-will be released after 5.30 pm today. The counting of votes will take place on December 11.