NIFTY SET TO OPEN LOWER ON EXIT POLLS, GLOBAL WEAKNESS; 8530 IS THE NEXT SUPPORT

NIFTY SET TO OPEN LOWER ON EXIT POLLS, GLOBAL WEAKNESS; 8530 IS THE NEXT SUPPORT

WORLD MARKETS

After moving higher in the initial trade on the back of solid jobs report, US indices saw a sustained downward mover through rest of the session to end lower by 0.3%-0.4% on concerns over the possibility of an earlier Fed rate hike and continued concerns over Greece.

The Labor Department said the United States created 257,000 jobs in January, beating estimates of about 230,000. More importantly, average hourly earnings grew by 0.5%, above estimates. The unemployment rate rose to 5.7%, slightly above estimates.

Rating agency S & P downgraded its rating on Greece to "B-" from "B".

Nymex crude rose $1.21 to $51.69 a barrel and Brent gained $1.23 to $57.80. Gold plunged 2.28% to $1235 an ounce.

European equities, except a modestly higher Spain, ended with cuts of upto half a percent after Greece's talks with Germany—the euro zone's largest economy—over the future of its bailout program had mixed success.

For the week however, Dow climbed 3.84%, its best week since January 2013. S & P 500 gained 3.03% and Nasdaq was up 2.4%. European markets too gained between 1.4%-1.9%.

Data released on Sunday showed that China's exports fell 3.3% y-o-y in January while imports tumbled 19.9%, below expectations.

                                                             

AT HOME

Benchmark indices fell nearly half a percent today, extending the losing streak to sixth straight day and ending at the lowest level since 19th January. Sensex lost 133 points to settle at 28718 while Nifty finished at 8661, down 51 points. BSE mid-cap and small-cap indices lost 1.1% and 1.8% respectively. BSE Auto and Healthcare indices tumbled 2.8% and 1.7% respectively, becoming top losers among the sectoral indices, while IT and FMCG indices gained 0.9% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 96 cr, 1180 cr and 369 cr respectively. DIIs were net buyers to the tune of Rs 115 cr.

Rupee appreciated 3 paise to end at 61.695/$.

For the week, Nifty and Sensex lost 1.7% and 1.6% respectively.

Tata Steel reported missed estimates by reporting 68.7% fall in December quarter net profit at Rs 157.1 cr thanks to weakness in Indian and South East operations, even as its European business continued to do well. Revenues fell 8.4% to Rs 33633 cr. Operating profit fell 21.2% to Rs 3077 cr. Operating margin fell to 9.1% from 10.9%.

Voting for Delhi assembly election was held yesterday. Exit polls predicted an emphatic victory for the Arvind Kejriwal-led Aam Admi Party (AAP), which if confirmed by the actual results on Tuesday, would mean the first significant political setback for PM Narendra Modi since the BJP's sweeping victory in Parliamentary polls in May 2014.

OUTLOOK

Today morning except a modestly higher Nikkei, other Asian markets are trading with cuts in the vicinity of half a percent and SGX Nifty is suggesting about 75 points lower opening for our market.

Readers would recall that we have been maintaining our negative bias on Nifty since 8850 was broken on 30th January. We were working with a downside target of 8640, which is the 38.2% retracement level of the 8065-8997 upmove seen in January.

The benchmark touched a low of 8645 on Friday, nearly achieving this target and vindicating our view.

Nifty however is set to open with a downward gap today which will result in the breach of 8640 support. Next level to watch in that case would be 8530, the 50% retracement level of the 8065-8997 upmove. Also you have 34-DMA placed around 8500, which makes region in the vicinity of 8500 a crucial support area.

On the way up, immediate resistance on the hourly chart has moved lower to around 8740, with the stop loss of which short positions can be held on to.

Government will release advance estimates of GDP for 2014-15, as well as for the first three quarters of the current financial year - on the basis of the revised method.

LT and DLF will report their quarterly earnings today.