8030 IS THE NEXT DOWNSIDE TARGET; 8170 IMMEDIATE HURDLE

8030 IS THE NEXT DOWNSIDE TARGET; 8170 IMMEDIATE HURDLE

WORLD MARKETS

Dow lost 0.1% while S & P 500 and Nasdaq ended marginally higher on Friday ahead of a key constitutional referendum in Italy while digesting a stronger-than-expected jobs report.

The U.S. economy added 178,000 jobs last month with the unemployment rate falling to 4.6%. Expectation was for a gain of 175,000 with the unemployment rate holding steady at 4.9%. Wages, however, slumped to 2.5%.

U.S. Treasurys traded slightly higher with the benchmark 10-year yield around 2.39% and the two-year note yield near 1.12%.

US crude gained 1.2% to $51.68 per barrel after the White House said President Obama is expected to sign legislation that would extend sanctions against Iran for 10 years. Meanwhile, Baker Hughes data showed U.S. drillers added three more rigs this week.

European markets lost upto 0.7%.

For the week, Dow ended marginally higher, but S & P 500 and Nasdaq tumbled 1% and 2.6% respectively. Main European markets fell 0.5%-1.7%. In Asia, Nikkei inched up 0.2% but Hang Seng and Shanghai lost 0.7% and 0.6% respectively.

                                                             

AT HOME

Benchmark indices plunged a percent and quarter, extending the losing streak to second day. Sensex lost 329 points to settle at 26231 while Nifty finished at 8087, down 106 points. BSE mid-cap and small-cap indices lost 1.3% and 1.4% respectively. All the BSE sectoral indices ended in red with Consumer Durable and Industrial indices leading the tally, down 2.3% and 1.8% respectively.

FIIs net sold stocks and stock futures worth Rs 191 cr and 614 cr respectively but net bought index futures worth Rs 242 cr. DIIs were net sellers to the tune of Rs 419 cr.

Rupee appreciated 15 paise to end at 68.19/$.

For the week, Sensex and Nifty lost 0.3% each.

Government revised the ceiling on issuance of securities under the market stabilization scheme (MSS) to Rs 6 trillion, from the previous limit of Rs 30,000 crore for financial year 2016-17. This is to facilitate liquidity management operations by the Reserve Bank of India in the current scenario, whereby banks are receiving copious deposits following demonetisation of Rs 500 and Rs 1,000 bank notes.

The Centre and the states failed on Saturday to agree on the crucial issue of “dual control” to divide the administrative, auditing and assessing powers between the two governments under the proposed nationwide Goods and Services tax (GST). The GST Council, headed by Finance Minister Arun Jaitley, will meet on December 11 and 12 to try and hammer out an agreeable model.

OUTLOOK

In the Italian referendum held yesterday, people rejected Prime Minister Renzi's proposed constitutional amendments following which Renzi has announced that he would resign. Euro touched a 20-month low of $1.0505 on this development.

Today morning Asian markets are trading with cuts of 0.3%-1.1% and SGX Nifty is suggesting a flattish start for our market.

After nearly achieving the 8260 target, which was the 50% retracement level of the recent 8600-7916 fall, Nifty reversed and broke the immediate support of 8120 on Friday, which has confirmed a "Sell" on the hourly chart.

8030, where a trendline adjoining recent bottoms on daily chart is placed, is the next downside target to eye. If 8030 does not hold, a retest of the 7916 bottom would be the next likely outcome.

Immediate resistance on the hourly chart is placed around 8170, with the stop-loss of which, trading short should be held on to.