NIFTY MOVES CLOSER TO 8000 SUPPORT; 8250 IS THE IMMEDIATE HURDLE

NIFTY MOVES CLOSER TO 8000 SUPPORT; 8250 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained 0.2%-0.7% on the back of remarks from Fed Chair Janet Yellen and upbeat economic data.

Housing starts soared more than 25% in October, while weekly jobless claims dropped to their lowest level since November 1973. October CPI rose 0.4%, in line with expectations.

Yellen testified to Congress where she said in prepared remarks that a rate hike could be "appropriate relatively soon," and added there were dangers to waiting too long to tighten monetary policy. She added she would not step down from her position as the head of the Federal Reserve until the end of her term.

U.S. Treasury yields rose with the two-year note yield near 1.03% and the benchmark 10-year yield around 2.28%.

US oil fell 0.33% to $45.42 a barrel.

European markets, except a flat Italy, gained 0.2%-0.9%.

AT HOME

After gaining about half a percent in the initial trade, Sensex and Nifty tumbled just under a percent from the top of the day to end lower by 0.3% and 0.4% respectively to end at the lowest level since late May. Sensex settled at 26228, down 71 points while Nifty lost 32 points to finish at 8080. BSE mid-cap and small-cap indices fell 0.4% and 0.6% respectively. BSE Telecom and Teck indices tumbled 2.4% and 1.7% respectively, becoming top losers among the sectoral indices while Utilities and Power indices were the top gainers, up 1.1% and 0.9% respectively.

FIIs net sold stocks worth Rs 984 cr but net bought index futures and stock futures worth Rs 345 cr and 200 cr respectively. DIIs were net buyers to the tune of Rs 1144 cr.

Rupee appreciated 13 paise to end at 67.82/$.

OUTLOOK

Today morning, except a 0.7% higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower start for our market.

At the risk of repeating, we have been working with the possibility of the retest of the 8000 bottom after 8230, the 61.8% retracement level of the 8000-8600 pullback was breached. The benchmark yesterday closed at 8080 and a lower close today would take it closer to 8000 mark.

8000, as we have been mentioning, is also where 34-month moving average is placed and hence is a crucial support to eye. In case of 8000 not holding, 7900 and 7650, 50% and 61.8% retracement levels of the 6825-8970 upmove, would be the next downside targets to eye.

Immediate resistance on the hourly chart has moved lower to 8250, a crossover of which would generate a buy on the hourly chart and would pave the way for the further upmove.