NIFTY ACHIEVES 10660 TARGET; 10825 IS THE IMMEDIATE HURDLE
US indices nosedived 2.5%-3% amid fears of a slowing global economy and weaker-than-expected reading on U.S. manufacturing.
The sell-off was led by Apple, which saw its stock plunge nealy 10%, its worst session since 2013, after cutting its revenue guidance on Wednesday. The iPhone maker attributed most of the predicted revenue shortfall for struggling business in China. Chip stocks Advanced Micro Devices, Nvidia, Skyworks and Qorvo all dropped on the Apple warning.
ISM's manufacturing index fell to 54.1 in December, way below the expected 57.9 mark.
Dollar index fell about half a percent to 96.27.
European markets fell 0.6%-1.7%. the IHS Markit/CIPS U.K. Construction Purchasing Managers' Index (PMI) fell to 52.8 in December, down from 53.4 in the previous month.
US crude rose 1.2% or 55 cents to $47.09 a barrel and Brent gained 91 cents or 1.7% to $55.82, helped by dollar weakness and signs of output cuts by Saudi Arabia.
Benchmark indices suffered another 1% plunge, extending the losing streak to second consecutive day. Sensex settled at 35513, down 377 points while Nifty lost 120 points to finish at 10672. BSE mid-cap and small-cap indices fell 1% and 0.6% respectively. Except 0.6% and 0.1% higher Telecom and FMCG indices respectively, all the BSE sectoral indices ended in red with Metal and Oil & Gas indices leading the losses, down 2.4% and 1.8% respectively.
FIIs net sold stocks, index futures and stock futures worth Rs 973 cr, 477 cr and 913 cr respectively. DIIs were net sellers to the tune of Rs 35 cr.
Rupee depreciated 2 paise to end at 70.19/$.
Today morning, Nikkei is down nearly 4% while Hang Seng and Shanghai are off 0.5% and 0.7% respectively. SGX Nifty is suggesting about 10 points lower start for our market.
In yesterday's report we had said that 10735, the low made Wednesday was the immediate support, upon breach of which, 10660, the two-third retracement level of the recent 10534-10923 upmove, would be the next downside target.
Nifty broke 10735 support and plunged all the way to 10661 before closing at 10672, achieving 10660 target and vindicating our view.
10660 continues to be immediate support, upon breach of which, 10534, the bottom made on 26th December, would be the next downside target/support to eye.
Immediate resistance on the hourly chart is placed around 10825, with the stop-loss of which, trading shorts should be held on to.