10170 CONTINUES TO BE IMMEDIATE SUPPORT; 10330 HURDLE

10170 CONTINUES TO BE IMMEDIATE SUPPORT; 10330 HURDLE

WORLD MARKETS                             

Dow and S & P 500 gained 0.5% and 0.2% respectively while Nasdaq fell 0.2% amid growing optimism that Republican lawmakers would be able to revamp the corporate tax system.

Brent crude fell 2% to $63.34 and US crude lost 1.4% to $56.91 after the U.S. Energy Information Administration said it expects U.S. oil production to rise sharply next year

European markets, except a 0.2% lower Spain, gained 0.2%-0.8%. The U.K. inflation rate hit a five-year-high of 3.1%.

AT HOME

Sensex and Nifty fell 0.7% and 0.8% respectively to break three-day winning streak. Sensex lost 228 points to settle at 33228 while Nifty finished at 10240, down 82 points. BSE mid-cap and small-cap indices fell 1% and 0.7% respectively. All the BSE sectoral indices ended in red with Telecom and Realty indices leading the tally, down 2.1% and 1.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 843 cr, 266 cr and 382 cr respectively. DIIs were net sellers to the tune of Rs 854 cr.

Rupee depreciated 4 paise to end at 64.40/$.

India's retail inflation grew at 4.88%, the fastest pace in 15-months, in November. In October, the figure was 3.58%. Core inflation rose to 4.86% from 4.6%.

India's factory output growth slowed to 2.2% in October as compared with 3.8% a month ago.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 20 points lower start for our market.

After Nifty crossed the 34-DMA hurdle of 10285, we were working with next target of 10360, where the downward sloping trendline adjoining tops made in November was placed.

Nifty, after touching a high of 10326 in the initial trade, slipped to end at 10240 and is set to open lower today.

10170 continues to be immediate support on the hourly chart, a breach of which will confirm a sell on the hourly chart and would pave the way for further correction.

On the upside, 10330, the top made on Monday, is now the immediate hurdle above which 10410, the top made in late November, would be the tougher resistance to eye.

Traders are advised to keep stop-loss of 10170 in long positions.

Federal Reserve, at the end of its two-day meeting today, is expected to raise interest rate by a quarter point. Also, in light of potential changes to the US tax system, the Fed may be forced to increase its economic and interest-rate outlooks.