RISING DOLLAR, YIELDS PRESSURE EMERGING MARKET EQUITES, CURRENCIES

RISING DOLLAR, YIELDS PRESSURE EMERGING MARKET EQUITES, CURRENCIES

WORLD MARKETS                             

Dow and S & P 500 gained 1.2% and 0.2% respectively while Nasdaq lost 0.8% yesterday as financials gained while technology fell. The Dow Jones industrial average hit a new all-time intraday high of 18,873.6.

US treasury yield continued to move higher, with the two-year note yield around 0.92% and the benchmark 10-year yield at 2.14%. Dollar index extended the upmove to fourth straight day to close at 98.86, the previous close being 98.62.

US weekly jobless claims totaled 254,000, below the expected 260,000. Meanwhile, St. Louis Fed President James Bullard said the central bank is still due for a single rate hike and then hold.

US oil fell 1.4% to $44.66 after the International Energy Agency (IEA) reported that oversupply concerns will remain, unless the Organization of Petroleum Exporting Countries (OPEC) can reach an output cut deal at its November 30 meeting.

European markets, except a flat Italy, fell 0.2%-1.6%. Basic materials and industrial sectors led gainers on hopes of a US-led infrastructure spending boom.

Mexican and Brazilian equities fell sharply.

AT HOME

After climbing 2% in morning trade, benchmark indices gave away nearly half of the gains in the noon trade to end higher by about a percent. Sensex added 265 points to settle at 27518 while Nifty finished at 8526, up 94 points. BSE mid-cap and small-cap indices gained 1.6% and 1.8% respectively. BSE Metal index soared 6%, becoming top gainer among the sectoral indices, followed by 3.6% rise in Bankex. IT and Auto indices fell 0.7% each, becoming top losers.

FIIs net sold stocks worth Rs 733 cr but net bought index futures and stock futures worth Rs 205 cr and 558 cr respectively. DIIs were net buyers to the tune of Rs 639 cr.

Rupee depreciated 20 paise to end at 66.63/$.

OUTLOOK

Today morning, Nikkei is up about a percent, Shanghai is flat but other Asian markets are down 0.5%-1.5%. SGX Nifty is suggesting about 130 points lower start for our market.

In yesterday's report we had mentioned that 8500 is the immediate hurdle on the hourly chart above which 34-DMA, placed around 8650 would be the next target to eye.

The benchmark crossed 8500 mark in the opening trade itself and surged all the way to 8598 but eased from there to close at 8526.

A gap down opening today would take Nifty closer to 8400.

34-DMA as well a downward sloping trendline adjoining major tops on daily chart is now placed around 8640, which would act as an important immediate hurdle, a decisive crossover of which is required to turn the short term view bullish. On the way down, 8370, the 38.2% retracement level of the big 8000-8600 pullback, is the immediate support, upon breach of which 8300 and 8230, the 50% and 61.8% retracement levels of the aforementioned upmove, would be the next downside targets as well as support levels to eye.

SBI, M & M and BoB will report their quarterly earnings today.