BROADER MARKET OUTPERFORMS WHILE NIFTY TAKES REST; TRAIL STOP LOSS TO 8340

BROADER MARKET OUTPERFORMS WHILE NIFTY TAKES REST; TRAIL STOP LOSS TO 8340

WORLD MARKETS

US indices climbed between 0.2%-0.7% yesterday, lifting the Dow and S & P 500 to record high, on encouraging housing data, positive lead from the European markets and a $66 billion deal by Actavis for Allergan that helped drive gains in the healthcare sector.

NAHB housing market index rose to 58 from 54 in previous month and beat the estimated reading of 55. US producer price index unexpectedly rose 0.2% in October as against expectation of a 0.1% fall.

European markets climbed between 0.6%-1.6% after keenly watched German ZEW indicator of economic sentiment for November came in at 11.5 points, versus -3.6 in October and marking the highest level in 11 months. Also, European auto sales were up for a 14th consecutive month. In UK, consumer prices grew by 1.3% year-on-year, up from September's five-year low of 1.2%.

In Japan, Prime Minster Shinzo Abe said he was delaying next year's sales tax increase by 18 months and calling for an early poll to get a mandate for his reflationary economic policies that how so far failed to yield solid results.

Nymex crude fell 1.4% to $74.61 a barrel; Gold rose 1.2% to $1197 an ounce.

AT HOME

Benchmark indices ended marginally lower after a choppy trading session. Sensex settled at 28163, down 15 points while Nifty lost 5 points to settle at 8426. Broader market however outperformed, as depicted by 0.3% and 0.9% rise in BSE mid-cap and small-cap indices respectively. BSE Capital Goods and Power indices climbed 1.6% and 1.3% respectively, becoming top gainers among the sectoral indices while IT and Realty indices lost 0.8% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 102 cr and 164 cr respectively but net bought stock futures worth Rs 180 cr. DIIs were net sellers to the tune of Rs 232 cr.

Rupee depreciated 1 paise to close at 61.74/$.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 10 points higher opening for our market.

Yesterday, Nifty, after touching a fresh record high of 8454, eased to close at 8426. The benchmark is gradually moving towards the 8520 target we had set for it when a tendline resistance on daily chart placed around 8130 was cleared on 30th October.

We have been advising holding on to trading longs with a trailing stop loss and that continues to be the advice. Immediate support on the hourly chart has now moved up to 8340, which should serve as the new stop loss.

SEBI, in its meeting today, is expected to simplify delisting guidelines, stricter norms on insider information and impose restriction on wilful defaulters.

Prime Minister’s Office (PMO) is expected to meet today to discuss sugar sector revival which might include giving subsidy for sugar export and incentive for increasing ethanol production.