NIFTY REBOUNDS FROM EXPECTED SUPPORT ZONE
US indices, after opening with cuts of nearly a percent and half on global growth concerns, recouped all the losses to end with gains of 0.1%-0.5%.
The lower start was attributed to global growth concerns after China's Markit Manufacturing Purchasing Managers' Index (PMI) for December dipped to 49.7 from 50.2 in November, implying a contraction for the first time in 19 months.
Economic data from Europe and US itself were weak too. In the U.S., the IHS Markit manufacturing PMI slipped to a 15-month low in December. The euro zone manufacturing PMI came in at 51.4, down from 51.8 in the previous month and the lowest reading since February 2016, according to IHS Markit. The data also showed confidence about the future hit a fresh six-year low.
Adding fuel to the fire were news reports that US trade representative Robert Lighthizer has warned Trump that additional tariffs may be needed to get meaningful concessions from the Chinese.
US crude rose $1.13, or 2.5%, to $46.54. Brent added $1.13, or 2.1%, to $54.93 a barrel after tanker-tracking data showed a big drop in Saudi Arabia's crude oil exports in December.
Dollar index jumped nearly half a percent to 96.66.
European markets, except 0.9% lower CAC, ended marginally higher.
Benchmark indices nosedived a percent, with Nifty breaking five-day winning streak. Sensex finished at 35891, down 363 points while Nifty lost 117 points to settle at 10792. BSE mid-cap and small-cap indices fell 1.3% and 0.7% respectively. Except 0.3% and 0.03% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Metal and Auto indices leading the losses, down 3.4% and 3% respectively.
FIIs net sold stocks, index futures and stock futures worth Rs 621 cr, 817 cr and 970 cr respectively. DIIs were net sellers to the tune of Rs 226 cr.
Rupee plunged 72 paise to end at 70.17/$.
Eicher Motor nosedived 9.4% after Royal Enfield sales declined 13% to 58278 in December.
Shares of Apple Inc. are trading with deep cuts of about 7% after it lowered its first quarter guidance and warned of weaker sales in China. Owing to this, US futures are down 1-2%.
Nikkei is shut today while Shanghai and Hang Seng are up 0.5% and 0.4% respectively. SGX Nifty is suggesting about 30 points higher start for our market.
For past couple of sessions, we have been mentioning that 10985 is the important immediate hurdle, a crossover of which is required for a fresh upmove and 10764-10747 is the immediate support zone.
Nifty, after touching a high of 10923 on Tuesday, slipped to 10735 yesterday, from where it rebounded to close at 10792 and is set to open above 10800 today.
10985, the top made on 19th December, continues to be immediate hurdle. 10735, the low made yesterday, which roughly coincided with our indicated support zone and 34-DMA placed around 10750, is 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.