11802 CONTINUES TO BE IMMEDIATE SUPPORT; 11973 IMMEDIATE HURDLE

11802 CONTINUES TO BE IMMEDIATE SUPPORT; 11973 IMMEDIATE HURDLE

WORLD MARKETS

US indices climbed 0.7%-0.8% to hit fresh record highs on Friday after White House economic advisor Larry Kudlow said China and the U.S. were getting close to reaching a trade deal.

Retail sales grew by 0.3% in October, topping an estimate of 0.2%. However, the data also showed big-ticket purchases dropped last month.

Brent crude gained $1.03, or 1.7%, to settle at $63.31 a barrel, while WTI crude rose 95 cents, or 1.7%, to $57.72 a barrel.

Main European markets gained 0.1%-0.6%. British consumer spending slowed in October, furthering suspicions that the economy is losing momentum ahead of December’s general election. Euro zone inflation slowed to 0.7% on the year in October from 0.8% in September while the bloc’s trade surplus grew to 18.7 billion euros in September, up from 12.6 billion euros in September 2018.

For the week, US indices gained 0.8%-1.2% with the Dow, S & P 500 and Nasdaq rising for the fourth, sixth and seventh consecutive week respectively. In Europe, FTSE lost 0.8% while CAC and DAX rose 0.8% and 0.1% respectively. In Asia Hang Seng and Shanghai tumbled 4.8% and 2.5% respectively, Nikkei fell 0.4% while Indian indices were little changed.

AT HOME

After rising about eight tenth of a percent, benchmark indices gave away most of the gains in late noon trade to end higher by a fifth of a percent. Sensex settled at 40356, up 70 points while Nifty added 23 points to finish at 11895. BSE mid-cap index rose 0.6% but small-cap index ended lower by 0.1%. BSE Telecom index soared 8.4%, becoming top gainer among the sectoral indices, followed by 0.9% higher Bankex. Power and FMCG indices were the top losers, down 0.8% and 0.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1008 cr, 656 cr and 36 cr respectively. DIIs were net buyers to the tune of Rs 537 cr.

Rupee appreciated 19 paise to end at 71.78/$.

For the week, Sensex ended flat while Nifty ended lower by 0.1%.

In a significant and much awaited judgement, the Supreme Court set aside NCLAT judgment that had provided for equal distribution between financial and operational creditors.

India's trade deficit narrowed to $11.01 bn in October from $18.08 bn a year ago as exports fell 1.11% to $9.63 bn while imports fell 16.31% to $37.39 bn.

OUTLOOK

Chinese state media outlet Xinhua reported over the weekend that Chinese Vice Premier Liu He had a phone call Saturday morning with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer regarding a “phase-one” trade deal.

Today morning, Hang Seng and Nikkei are up 0.7% and 0.2% respectively while Shanghai is marginally in the red. SGX Nifty is suggesting a flattish start for our market.

In Friday's report we had said that 11802, the low made Thursday, also coincides with 20-DMA and hence was the immediate support to eye. We had also said that 11950 continued to be immediate hurdle, with the stop-loss of which, trading shorts can be held on to.

Nifty, touched a high of 11973 in the first half but could not sustain there and slipped to end at 11895 and is set to open flat today.

11973, the top made on Friday, is now the immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 12034, the top made last week, would be the next target/resistance.

11802, the low made last week, continues to be immediate support upon breach of which, 11700, would be the next major support.