NIFTY RETREATS AFTER NEARLY ACHIEVING 8260 TARGET; 8120 IS THE IMMEDIATE SUPPORT

NIFTY RETREATS AFTER NEARLY ACHIEVING 8260 TARGET; 8120 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow gained 0.4% but S & P 500 and Nasdaq lost 0.4% and 1.4% respectively as decline in technology offset a rally in financials.

WTI oil extended Wednesday's 9% surge by adding another 3.3% to close at $51.06 a barrel while Brent climbed 4.1% to $53.94. For Brent, this was a 16-month high while WTI hit a 6-week high.

Initial jobless claims came in at 268,000, above an expected 253,000. The ISM manufacturing index for November came in at 53.2, while construction spending for October rose 0.5%. The IHS Markit U.S. Manufacturing index reading for November came in at 54.1.

US treasury yields extended the upmove with the benchmark 10-year note yield at 2.4417% and the two-year note yield around 1.147%. Dollar index slipped half a percent. Gold fell $4.50 to $1169 per ounce.

European markets fell 0.2%-1%. Sterling climbed above $1.13 after David Davis, the U.K.'s Brexit secretary, said the government would assess whether to keep paying into the EU budget to keep its access to the single market.

AT HOME

Benchmark indices ended lower by four tenth of a percent after a choppy session, breaking the four-day winning streak. Sensex lost 93 points to settle at 26560 while Nifty finished at 8193, down 32 points. BSE mid-cap and small-cap slipped 1.2% and 0.6% respectively. BSE Metal and Power indices tumbled 1.7% and 1.6% respectively, becoming top gainers among the sectoral indices while Healthcare and FMCG indices were the top gainers, up 0.3% and 0.2% respectively.

FIIs net sold stocks worth Rs 403 cr but net bought index futures and stock futures worth Rs 708 cr and 304 cr respectively. DIIs were net buyers to the tune of Rs 238 cr.

Rupee appreciated 4 paise to end at 68.34/$.

India's Nikkei/Markit Manufacturing PMI fell to 52.3 in November from October's 54.4, its biggest month-on-month decline since March 2013.

Maruti Suzuki reported better-than-expected 12.2% y-o-y growth in November sales at 1.35 lakh units. Eicher sold 41% higher Royal Enfield at 57313 units however CV sales were down 12.7% at 3176 units. Ashok Leyland sales were up 7% at 9574 units. M & M however reported 22% dip in total sales at 32499 units. Tractor sales for the company were down 21% at 17262 units. Tata Motors sales were flat at 38900 units. TVS Motors sales too were flat at 2.25 lakh units. Hero Motocorp sales dipped 12.9% to 4.79 lakh units.

Telecom stocks tumbled after the announcement that Reliance Jio will be offering free services to existing and new customers through its 'Happy New Year' offer until March 31.

The Reserve Bank of India (RBI) yesterday capped banks’ exposure limit to a single entity to 20% and that to a business group at 25%.

The CBDT has clarified that there would be no seizure of gold jewellery and ornaments if the holding is limited to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male in the family.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.9% and SGX Nifty is suggesting about 50 points lower start for our market.

Just to reiterate, we have been working with targets of 8180, 8260 and 8340, which are the 38.2%, 50% and 61.8% respectively of the recent 8600-7916 fall, after Nifty generated a buy on hourly chart by crossing immediate hurdle of 8085.

The benchmark yesterday touched a high of 8251 before closing at 8193, nearly achieving the middle target mentioned above.

A gap down opening today would take Nifty close to 8150 mark.

Immediate support on the hourly chart has moved up to 8120, which should serve as the fresh stop-loss for trading longs. 8251, the top made yesterday is the immediate hurdle above which 8340 would be the next major target as well as resistance to eye.

US non-farm payroll data for November will be out today where addition of 175,000 is expected which is slightly above October's 161K, while the unemployment rate is expected to remain unchanged at 4.9%.