14320 CONTINUES TO BE IMMEDIATE SUPPORT; 14653 IS IMMEDIATE HURDLE

 

14320 CONTINUES TO BE IMMEDIATE SUPPORT; 14653 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices fell 0.6%-0.9% on weak economic data, fall in energy and financial stocks and concerns over reemergence of Covid-19 cases in China.

 

Retail sales fell 0.7% in December, worse than the expected decline of 0.1%.

 

Wells Fargo and Citigroup declined 7.8% and 6.9%, respectively, even after posting earnings beat. JPMorgan also fell more than 1% despite reporting better-than-expected earnings.

 

Brent as well as WTI crude fell 2.3% each to settle at $55.10 per barrel and $52.36 per barrel respectively on concerns over Chinese cities in lockdown due to coronavirus outbreaks.

 

10-year Treasury yield dipped 3 bps to 1.096%, while the yield on the 30-year Treasury bond fell 4 bps to 1.838%. Dollar index climbed 0.56% to 90.773. Spot gold slipped 1% to $1,827.90 per ounce.

 

European markets slipped 1%-1.7%. The U.K. economy contracted by 2.6% in November as the country implemented fresh lockdown measures. This was better than the -5.7% expectation but marked a first contraction since the onset of the coronavirus crisis last spring. France's December CPI inflation came in at 0.0% y-o-y and 0.2% month on month.

 

For the week, Dow and Nasdaq fell 0.9% and 1.5% respectively, snapping four-week winning streak. The S & P 500 lost 1.5%. Main European markets fell between 1.7%-2%. In Asia, Hang Seng, Nikkei and Nifty rose 2.5%, 1.4% and 0.6% respectively while Shanghai was down 0.1%.

 

WTI and Brent crude both hit their highest in nearly a year earlier in the week but slipped later to end lower for the week. WTI crude fell 1.3% to $52.04 per barrel. Dollar index rose 0.8% to 90.78, its best weekly showing in 11 weeks. Gold fell 1.2% to $1828 per ounce.

 

AT HOME

 

Benchmark indices nosedived 1.1% each, suffering the worst fall since 21st December. Sensex settled at 49034, down 549 points while Nifty lost 162 points to finish at 14433. Nifty mid-cap and small-cap indices too slipped 1.1% each. Except 3.7% higher Telecom index, all the BSE sectoral indices ended in red with Oil & Gas and IT indices leading the losses, down 2.4% and 1.9% respectively. 

 

FIIs net bought stocks worth Rs 971 cr but net sold index futures and stock futures worth Rs 1063 cr and 932 cr respectively. DIIs were net sellers to the tune of Rs 942 cr.

 

Rupee depreciated 3 paise to end at 73.07/$.

 

For the week, Sensex and Nifty rose 0.5% and 0.6% respectively, extending the winning streak to 11th and 3rd straight week respectively.

 

OUTLOOK

 

China's Q4 GDP growth stood at 6.5% y-o-y, up from 4.9% of the prior quarter and better than the expectation of 6.1% growth. Retail sales for the quarter rose 4.6%.

 

Today morning, Hang Seng and Shanghai are up around a fifth of a percent while Nikkei is down 0.8%. SGX Nifty is suggesting around 30 points lower start for our market.

 

In Friday's report we had said that 14653, the top made Wednesday, was the immediate hurdle to eye while 14320 continued to be immediate support.

 

Nifty slipped to touch a low of 14357 before closing at 14433 and is set to open near 14400 today.

 

14320 continues to be immediate support on the hourly chart, upon breach of which, 20-DMA, placed around 14100, which also coincides with an upward sloping trendline adjoining bottoms made on 30th October and 21st December, would be the next support to eye.

 

On the way up, 14653, the top made last Wednesday, continues to be immediate hurdle.

 

Meanwhile, trading longs should be cut if 14320 breaks.

 

Markets in the U.S. will be closed today for a holiday.