WORLD EQUITIES EXTEND FED FUELED RALLY; NIFTY APPROACHING 8230 HURDLE

WORLD EQUITIES EXTEND FED FUELED RALLY; NIFTY APPROACHING 8230 HURDLE

WORLD MARKETS

US indices soared between 2.2%-2.4% yesterday, with the Dow registering best day in three-years, as investors applauded the Federal Reserve's pledge that it would be patient in increasing interest rates. Positive data showing jobless claims fell by 6,000 to 289,000 last week - the lowest since early November - also encouraged sentiment.

Another data had Conference Board's index of leading indicators advancing in November for a third consecutive month, signaling the U.S. economy is picking up steam heading into the new year.

Meanwhile, global crude prices fell again yesterday with Brent falling $1.91 to $59.27. Nymex crude settled down 4.2% or $2.36 at $54.11.

European markets climbed between 2%-3.4%. The German Ifo business climate survey managed to beat market predictions with a figure of 105.5 against a consensus 105.4.

AT HOME

It turned out to be the best day for the bulls in nearly one and a half months as benchmark indices soared 1.6%, breaking the five-day losing streak. Sensex surged 416 points to settle at 27127 while Nifty finished at 8159, up 130 points. BSE mid-cap and small-cap indices surged 2.7% and 3.3% respectively. All the BSE sectoral indices ended in green with Consumer Durable and Power indices leading the tally, climbing 5.3% and 3.3% respectively.

FIIs net sold stocks worth Rs 875 cr but net bought index futures and stock futures worth Rs 36 cr and 311 cr respectively. DIIs were net buyers to the tune of Rs 648 cr.

Rupee surged 51 paise to end at 63.11/$.

OUTLOOK

Today morning, barring a flattish Shanghai, other Asian markets are trading with gains ranging from 1%-2% and SGX Nifty is suggesting about 50 points higher opening for our market.

In yesterday's report we had mentioned that while Nifty had rebounded from the 7950 support, it needs to cross 8230 hurdle to generate a buy on the hourly chart and put bulls in the dominating position.

After today's gap up opening, Nifty would be very close to this level. Looking at the imminent resistance and steep rebound over past two sessions, traders would do well to lighten commitments in long positions as the 8230 hurdle approaches and take a fresh view after the benchmark sustains above it. A crossover of this hurdle would pave the way for the further upside till about 8370, which is the 61.8% retracement level of the recent 8627-7961 fall.