STAY LONG WITH THE STOP-LOSS OF 8000

STAY LONG WITH THE STOP-LOSS OF 8000

WORLD MARKETS                             

US indices gained about four tenth of a percent on Friday to close at fresh record high.

U.S. trade deficit totaled $62 billion in October. The November read on the IHS Markit non-manufacturing index came in at 54.7, marginally lower than the October read of 54.8.

US oil fell 3.1% to $46.48 and Brent lost 3.6% to $47.25 a barrel as Saudi Arabia announced it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

US 10-year note yield held at 2.372% while the dollar index fell 0.2%. Gold fell $11 to $1178 per ounce.

European markets ended with modest gains.

For the week US indices added almost 1.5% each, extending the winning streak to third straight week. In Europe FTSE and CAC climbed 1% each while DAX was up 0.3%. In Asian, Nikkei and Shanghai soared 2.3% and 2.2% respectively while Hang Seng rose 1%.

AT HOME

After a modestly higher start, Sensex and Nifty kept on moving higher through the session to end with mammoth gains of 1.8% and 1.9% respectively, marking the biggest daily gain since 18 October and 25th May respectively. Sensex soared 456 point to settle at 26316 while Nifty finished at 8114, up 150 points.  BSE mid-cap and small-cap indices added 1.3% and 2% respectively. All the BSE sectoral indices ended in green with IT and Teck indices leading the tally, up 4.7% and 3.8% respectively.

FIIs net sold stocks worth Rs 373 cr but net bought inex futures and stock futures worth Rs 638 cr and 1034 cr respectively. DIIs were net buyers to the tune of Rs 998 cr.

Rupee appreciated 27 paise to end at 68.46/$.

For the week, Sensex and Nifty gained 0.6% and 0.5% respectively, breaking four-week losing streak.

The government released the revised draft Goods & Services Tax (GST) Compensation Law for public as well as the revised IGST Law after incorporating suggestions from industries. Government officials have said that these bills will tabled in the Parliament during 5-9 December.

With a move to managing the excess liquidity in the system banking regulator Reserve Bank of India announced that it would absorb a part of this extra cash by applying an incremental cash reserve ratio (CRR) as a purely temporary measure. On the increase in NDTL between September 16, 2016 and November 11, 2016, scheduled banks shall maintain an incremental CRR of 100%, effective the fortnight beginning November 26, 2016. This move is expected to suck out around Rs 3.3 lac cr from the banking system.

OUTLOOK

Today morning, except a half a percent lower Nikkei, other Asian markets are trading with gains of 0.3%-0.8% but SGX Nifty is suggesting about 40 points lower start for our market.

In Friday's report we had reiterated the view that 8085 continues to be immediate hurdle, a crossover of which would generate a buy ont he hourly chart and would pave the way for the further upmove.

The benchmark crossed this hurdle on Friday and touched a high of 8122 before closing at 8114 but is set to open lower today.

8180 the 38.2% retracement level of the recent 8600-7916 fall, is the first upside target to eye above which 8260 and 8340, the 50% and 61.8% retracement levels of the aforementioned upmove, would be the subsequent levels to watch.

Immediate support on the hourly chart is placed around 8000, with the stop-loss of which trading longs should be held on to.