NIFTY MOVES CLOSE TO 10200 TARGET; 10355 IS THE IMMEDIATE HURDLE

NIFTY MOVES CLOSE TO 10200 TARGET; 10355 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices soared 0.7%-1.4% as the possibility of the Senate passing a bill aimed at overhauling the U.S. tax code increased.

Senator John McCain said he will back the Senate GOP's tax bill, boosting the plan's chances of clearing the Senate by Friday. McCain had been one of the last GOP senators not committed to supporting the proposal.

OPEC members and other oil-producing countries agreed to extend production cuts until the end of 2018. Crude prices rose slightly by 0.2% to settle at $57.40 per barrel.

European markets, except a 0.2% higher Italy, lost 0.3%-0.9%. Mining stocks, in particular, came under pressure, as nickel prices tumbled some 2.5%.

AT HOME

Benchmark indices nosedived a percent and third, registering largest single day fall in two months and extending the losing streak to third straight day. Sensex slipped 453 points to settle at 33149 while Nifty finished at 10227, down 135 points. BSE mid-cap index fell 0.6% but small-cap index managed to gain 0.1%. BSE Bankex tumbled 1.9%, becoming top loser among the sectoral indices, followed by 1.4% lower Finance index. Realty and Telecom indices were the top gainers, up 1.1% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1501 cr, 625 cr and 2624 cr respectively. DIIs were net buyers to the tune of Rs 1203 cr.

Rupee depreciated 14 paise to end at 64.46/$.

India's fiscal deficit, the gap between the government's earnings and spending, stood at Rs 5.25 lakh crore in the April to October period, which is 96.1% of the Rs 5.47 lakh crore target for the current financial year.

The Indian economy grew 6.3% in July-September, recovering from a three-year low growth slump of 5.7% in April-June. Gross value added (GVA), which is GDP minus taxes, grew 6.1%, rebounding from 5.6% in April-June.

OUTLOOK

Senate Republicans on Thursday night pushed back voting on their tax bill as a setback forced them to patch up the plan only hours before a planned final vote.

Today morning, Nikkei and Hang Seng are up 0.2% and 0.4% respectively but Shanghai is down 0.1%. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had reiterated the view that 10300, where 34-DMA was placed, was the important immediate support, a breach of which would also generate a sell on the hourly chart and would pave the way for further correction. We had also said that 10200, the two-third retracement level of the recent 10094-10410 upmove, would be the next downside target if that happens.

Nifty broke 10300 support in the first hour itself and plunged all the way to 10211, coming in very close to 10200 target and vindicating our view.

10200 continues to be immediate support below which 10094, the bottom made in mid-November, would be the next downside target as well as support to eye.

Meanwhile, immediate resistance on the hourly chart is placed around 10355, with the stop-loss of which, trading shorts should be held on to.