12103 ABOVE 10981; 11730 CONTINUES TO BE IMMEDIATE SUPPORT

12103 ABOVE 10981; 11730 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

US indices soared 1%-1.1% on Friday on the back of much stronger-than-expected U.S. jobs data and progress over US-China trade deal.

China said it reached a consensus in principle with the U.S. during trade talks this week. The U.S. Trade Representative’s office also said Robert Lighthizer and Treasury Secretary Steven Mnuchin made “progress in a variety of areas and are in the process of resolving outstanding issues.”

The U.S. economy added 128,000 jobs in October, the expected figure being 75000. Jobs growth data for September and August was also revised substantially higher. September’s number was revised up to 180,000 from 136,000. August jobs growth was revised to 219,000 from 168,000.

The ISM’s manufacturing PMI for October came in at 48.3, representing a bigger-than-expected contraction in the sector. However, some of the survey’s internal components showed improvement, offsetting the disappointing headline number.

Exxon Mobil gained 3% on the back of stronger-than-forecast quarterly results. Apple shares rose more than 2% to a record high.

Earlier, data from China showed factory activity in October expanded at its fastest pace since February 2017.

Brent crude rose $2.12, or 3.6%, to $61.74 while West Texas Intermediate crude rose $2.02 or 3.73% to $56.20 a barrel.

European markets rose 0.6%-1%.

AT HOME

Benchmark indices ended marginally higher after a rangebound but choppy session, extending the rising streak to sixth straight day. Sensex settled at 40165, up 36 poitns while Nifty added 13 points to finish at 11890. BSE mid-cap and small-cap indices rose 0.2% and 0.3% respectively. BSE Metal and Telecom indices climbed 2.5% and 1.5% respectively, becoming top gainers among the sectoal indices while Consumer Durable index fell 1.2%, becoming top loser, followed by 0.8% lower IT and Auto indices.

FIIs net bought stocks, index futures and stock futures worth Rs 533 cr, 428 cr and 1095 cr respectively. DIIs were net sellers to the tune of Rs 136 cr.

Rupee appreciated 11 paise to end at 70.81/$.

OUTLOOK

U.S. Commerce Secretary Wilbur Ross said Sunday that licenses for American firms to sell to Chinese telecommunications giant Huawei will be granted “very shortly.” He also said the trade agreement between US and China could be reached by the Trump and Xi in one of several locations, including Iowa, Alaska, Hawaii or somewhere in China.

Today morning, Hang Seng and Shanghai are up 1.2% and 0.5% respectively while Nikkei is down 0.3%. SGX Nifty is suggesting about 30 points higher start for our market.

Readers would recall taht we have been bullish on Nifty ever since 11320 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss.

After the benchmark achieved 11798 target, we had given 11940-11980 as the next target zone. The benchmark touched a high of 11945 last week before closing at 11877, hitting 11940-11980 target zone and vindicating our view.

11981, the top made in July continues to be next target as well as resistance to eye. Once that is taken out, 12103, the top made in June, would be the next major target/hurdle to eye.

11730 continues to be immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

HDFC will report its quarterly earnings today.