Tuesday, January 8, 2019

10890 CONTINUES TO BE IMMEDIATE HURDLE; 10741 IMMEDIATE SUPPORT


10890 CONTINUES TO BE IMMEDIATE HURDLE; 10741 IMMEDIATE SUPPORT

WORLD MARKETS

After opening in the red, US indices rebounded through the session to end with gains of 0.4%-1.3%, keeping an eye on the trade talks between US and China.

Two day trade negotiations between US and China began yesterday. According to a spokesman at the Chinese foreign ministry, China said that it is willing to resolve its trade disputes with the U.S. on an equal footing.

Earlier, on Sunday, US President Trump said that weakness in the Chinese economy gave Beijing an extra incentive to work toward a resolution to the global trade war.

US oil rose 56 cents or 1.2% to $48.52 and Brent added 27 cents or 0.5% to reach $57.33 a barrel.

In Europe FTSE, CAC and DAX fell 0.2%-0.4% but Italy and Spain gained 0.6% and 0.4% respectively. Data from Germany showed that industrial orders dropped by more than expected in November.

AT HOME

After gaining nearly a percent in the initial trade, benchmark indices gave away nearly half of the gains through the session to end higher by about half a percent. Sensex settled at 35850, up 155 points while Nifty added 49 points to finish at 10776. BSE mid-cap and small-cap indices ended marginally higher, gaining 0.03% and 0.06% respectively. BSE Realty and Telecom indices climbed 1.6% and 1.3% respectively, becoming top gainers among the sectoral indices while Healthcare and Metal indices were the top losers, down 0.4% and 0.2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 736 cr, 408 cr and 125 cr respectively. DIIs were net sellers to the tune of Rs 142 cr.

Rupee appreciated 4 paise to end at 69.68/$.

According to the first advance estimates released by the Central Statistics Office, GDP growth is expected at 7.2% in 2018-19 compared to 6.7% last year, which would be fastest in three years. Gross Value Added, which strips out indirect tax and subsidies, is expected to grow at 7% compared to 6.5%.

OUTLOOK

Today morning, Nikkei is up 0.6% while Hang Seng and Shanghai are down about 0.25% each. SGX Nifty is suggesting a marginally lower start for our market.

In yesterday's report, we had said that "A trendline adjoining recent tops on the daily chart is placed around 10890 and that would be the immediate hurdle to eye."

Nifty, after touching a high of 10835 in the initial trade, slipped to end at 10771 and is set to open little changed today.

10890 continues to be immediate hurdle to eye. 10741, the lower end of the gap created by yesterday's gap-up opening, is the immediate support below which, 10628, the low made last week, would be the important support to eye.

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