10870 IS THE IMMEDIATE HURDLE; 10710 NEAREST SUPPORT

10870 IS THE IMMEDIATE HURDLE; 10710 NEAREST SUPPORT

WORLD MARKETS

Dow and S & P 500 ended flat while Nasdaq fell 0.2% on Friday on the back of an ongoing U.S. government shutdown and worries about an economic slowdown in China.

The federal government remained partially closed on Friday for a 21st straight day, stoking fears the shutdown could drag on for a long time.

On Thursday, Federal Reserve Chairman Jerome Powell said that warnings shows the Chinese economy is slowing.

WTI and Brent oil fell 1.9% each to $51.59 and $60.53 a barrel respectively, breaking 9-day winning streak. Trump said he will "probably" declare a national emergency if the White House and Congress cannot reach a deal to end the shutdown.

European market fell upto 0.5%. GDP figures showed the U.K. economy slowed down in the three months to November — hitting its weakest pace in six months.

For the week, US indices climbed 2.4%-3.4%, extending the winning streak to third straight week. European markets gained 0.9%-1.2%. In Asia Nikkei and Hang Seng soared 4% each while Shanghai rose 1.6%.

AT HOME

Benchmark indices ended lower by a fourth of a percent after a choppy session, extending the losing streak to second straight day. Sensex settled at 36009, down 97 points while Nifty lost 26 points to finish at 10794. BSE mid-cap and small-cap indices fell 0.1% and 0.2% respectively. Except 0.5% and 0.1% higher FMCG and Oil & Gas indices respectively and a flat Metal index, all the BSE sectoral indices ended in red, with Realty and Telecom indices leading the losses, down 1.4% and 1.1% respectively.

FIIs net sold stocks and index futures worth Rs 687 cr and 540 cr respectively but net bought stock futures worth Rs 205 cr. DIIs were net buyers to the tune of Rs 123 cr.

Rupee depreciated 7 paise to end at 70.48/$.

India's industrial production, as represented by IIP, grew by just 0.5% in November, as against 8.1% in October, marking the slowest growth in 17-months.

Infosys reported a beat on revenue while margins were a miss. Constant currency revenue growth stood at 2.7% q-o-q and 10.1% y-o-y. Rupee revenue rose 1.4% q-o-q  to Rs 21400 cr. Margins however contracted 110 bps q-o-q to 22.6% and Net profit fell 12.2% to Rs 3609 cr. The company hiked its constant currency revenue growth guidance to 8.5%-9% from earlier 6-8%. Margin guidance was maintained at 22-24$.

For the week, Sensex and Nifty gained 0.9% and 0.6% respectively.

OUTLOOK

Today morning, Nikkei is shut while Hang Seng and Shanghai are down 1.2% and 0.4% respectively. SGX Nifty is suggesting a flattish start for our market.

Nifty has been repeatedly getting resisted at the downward sloping trendline adjoining recent tops on the daiy chart that we have been mentioning for past couple of sessions.

On Friday, after touching a high of 10850, Nifty retreated to end at 10794 and is set to open around 10800 today.

10870, the top made last week, is now the immediate hurdle to eye, upon crossover of which, 10985, the top made on 19th December, would be the next target to eye.

An upward sloping trendline adjoining recent bottoms on the daily chart presents a support around 10710, below which, 10628, the bottom made on 4th January, would be the next support.

India's CPI for November would be out today and is expected to show a reading of 2.26% v/s 2.33%. Core inflation is expected to be 5.4%-5.6% as against 5.8%. WPI for November would also be released today and is expected at 4.57% v/s 4.6% in the previous month.