8000 MAJOR SUPPORT BELOW 8230; 8460 IMMEDIATE HURDLE

8000 MAJOR SUPPORT BELOW 8230; 8460 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow gained 0.1%, S & P 500 ended flat while Nasdaq lost 0.4% yesterday. Dow gained for the sixth straight day and hit a new-all time high. Financials gained the most while IT was the top loser. Last week, Dow soared 5.4%, marking the best weekly gain since 2011. S & P 500 and Nasdaq climbed 3.8% each, their highest weekly gains since 2013 and February, respectively.

Following Trump's victory, markets are looking forward to his economic policies, which could lead to higher infrastructure spending and less regulation within financials.

Meanwhile, in an interview President elect Trump urged his supporters to stop harassing minority groups "because I'm going to bring this country together." In the same interview, however, Trump said he would deport millions of illegal immigrants.

Treasury yield continued to edge higher. Two-year yield traded at 0.996% while the benchmark 10-year yield gained around 10 bps to 2.2428%, hitting highest level since Dec 31, 2015. US Dollar index surged 1% to 100.03, an eleven-month high. Euro fell 1.1% to $1.073 and the yen fell 1.5% to $108.41.

US oil fell 0.2% to $43.32. Gold fell $3 to $1222 per ounce.

European markets, except a 0.8% lower Italy, gained 0.2%-0.4%. Higher bond yields and the prospect of an interest rate rise helped the European banking and financial services sectors.

Economic data out of China were mixed. China's fixed-asset investment rose 8.3% in the January-to-October period, beating market expectations, while October industrial output and retail sales growth missed forecasts.

AT HOME

On Friday, after a gap down opening, benchmark indices extended the fall through the session to end with deep cuts of more than two and a half percent and closing at the lowest level since June end. Sensex sank 699 points to settle at 26819 while Nifty finished at 8296, down 229 points. BSE mid-cap and small-cap indices nosedived 3.6% and 3.4% respectively. All the BSE sectoral indices ended in red with Auto and Consumer Discretionary Goods indices leading the tally, down 4.5% and 4.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1493 cr, 1020 cr and 1708 cr respectively. DIIs were net buyers to the tune of Rs 65 cr.

Rupee depreciated 62 paise to end at 67.25/$.

For the week, Sensex and Nifty lost 1.7% and 1.6% respectively, extending the losing streak to third straight week.

SBI posted a net profit r Rs 2538 for September quarter, down 35% y-o-y. NII rose 1.3% to Rs 14437 cr. Gross NPA rose to 7.14% from 6.94% and net NPA rose to 4.19% from 4.05% q-o-q.

M & M reported a 27% jump in its standalone net profit at Rs 1,163 crore. Revenue stood at Rs 11364 cr, up 15.6%.

Tata Motors' consolidated revenues for the second quarter rose 7% y-o-y to Rs 67,999.7 crore, EBIT (earnings before interest and tax) stood at Rs 6,282 crore while the company swung to a profit of Rs 848 crore, compared to a Rs 1,740 crore loss last year. Revenue was slightly ahead of analysts' estimate but EBIT and profit fell short of estimates.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes. SGX Nifty is trading around 8250, which is down about 75 points compared to Friday's close of Nifty futures.

Readers would recall that we have been cautious on Nifty for last two months or so owing to steep six-month run up seen between March-August after which the benchmark was very close to 9119 top made in last March. After 8500, the bottom of the two-month consolidation phase was broken, we were working with targets of 8300 and 8150, where 8300 was the 34-week moving average and 8150 was the 38.2% retracement level of the entire 6825-8970 upmove.

The benchmark achieved both the above targets and went further to touch the 34-month moving average placed at 8000.

8000, being 34-month average, continues to be crucial support to eye. Before that 8230, the 61.8% retracement level of the recent 8000-8600 pullback, would be the immediate support to eye. A sustained trading below 8230 would open up the possibility of the retest of 8000 bottom.

On the way up, 8460 is the immediate hurdle on the hourly chart above which 8600 would be the major resistance to eye.