NIFTY HOLDS 10090 ON CLOSING BASIS; RBI IN FOCUS

NIFTY HOLDS 10090 ON CLOSING BASIS; RBI IN FOCUS

WORLD MARKETS                             

US indices fell 0.2%-0.4% with the S&P 500 posting its first three-day losing streak since August.

Brent crude rose 0.7% or 45 cents to $62.90 a barrel and WTI rose 0.3% or 15 cents to $57.62.

Main European markets fell 0.1%-0.3% while Italy gained 0.2%. Basic resources stocks led the losses amid heavy falls in metals markets. The euro zone composite PMI surged to 57.5, up from 56.0 in October. That's the highest monthly reading in more than 6.5 years.

In the latest talks between the U.K. and the European Union, both sides failed to agree upon the terms for the U.K. leaving the political-economic bloc on Monday.

AT HOME

Benchmark indices ended marginally lower after a choppy trade. Sensex settled at 32802, down 67 points while Nifty lost 10 points to finish at 10118. BSE mid-cap index gained 0.4% while the small-cap index ended marginally in the red. BSE Power and Utilities indices fell 1.1% and 0.8% respectively, becoming top losers among sectoral indices while Telecom and Energy indices were the top gainers, up 0.8% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 1471 cr and 1979 cr respectively but net bought stock futures worth Rs 278 cr. DIIs were net buyers to the tune of Rs 1074 cr.

Rupee ended flat at 64.38/$.

India's November Nikkei/IHS Markit Services Purchasing Managers' Index fell to 48.5 - its lowest since August - from 51.7 in October, well below the 50 mark that separates expansion from contraction.

The government yesterday announced incentives worth a total Rs 8,450 crore to boost exports and employment in labour-intensive sectors in the mid-term review of the five-year foreign trade policy (FTP) that was rolled out in 2015.

OUTLOOK

Today morning, Hang Seng is flat but Nikkei and Shanghai are down 0.8% and 0.4% respectively. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had reiterated the view that upon decisive breach of 10090, which is the 50% retracement level of the 9690-10490 upmove, the next downside target would be 9950, the two-third retracement level of the aforementioned upmove.

Nifty, after touching a low of 10069 in first half an hour, rebounded to end at 10118, holding on to 10090 support on closing basis.

10090 continues to be immediate support, upon decisive breach of which 9950 would be the next target to eye.

Immediate resistance on the hourly chart has moved lower to 10260, a crossover of which is required for taking a positive view on Nifty.

RBI's Monetary Policy Committee, at the end of its two-day meeting, is expected to leave policy rates unchanged. Markets would watch out for cues to future policy direction.