11802 IS NEXT SUPPORT; TRAIL STOP-LOSS TO 11970

11802 IS NEXT SUPPORT; TRAIL STOP-LOSS TO 11970

US indices fell 0.1% each, tracking developments over US-China trade negotiations.

The Wall Street Journal reported that the U.S. plans to delay slapping China with additional tariffs as both sides try to work out the agreement. The report added that U.S. negotiators have also asked Chinese officials to commit to some agricultural purchases upfront before moving forward with a deal. Meanwhile, China wants its agricultural purchases to be proportional with the amount of tariffs the U.S. rolls back. The U.S. is also reportedly pushing for a quarterly review of the promised purchases.

White House economic advisor Larry Kudlow, however, said Dec. 15 tariffs are still "on the table."

Earlier, South China Morning post said China and the US are unlikely to reach a trade deal this week.

Brent crude rose 7 cents to $64.32 a barrel and WTI oil rose 22 cents to $59.24 a barrel.

In Europe, FTSE and DAX fell 0.3% each while CAC rose 0.2%. UK GDP rose by just 0.7% y-o-y in October, its slowest annual pace in nearly seven years. The ZEW German economic sentiment indicator surged to 10.7 for December from -2.1 in November.

AT HOME

Sesnex and Nifty tumbled 0.6% and 0.7% respectively to close at one-month low. Sensex settled at 40239, down 247 points while Nifty lost 80 points to finish at 11856. Nifty mid-cap and small-cap indices slumped 1.3% and 1.1% respectively to close at the lowest level since  29th October and 18th October respectively. All the BSE sectoral indices ended in red with Utilities and Power indices being the top losers, down 2.2% and 1.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 367 cr, 142 cr and 539 cr respectively. DIIs were net buyers to the tune of Rs 338 cr.

Rupee appreciated 12 paise to end at 70.92/$.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally higher start for our market.

Readers would recall that we had turned our view on Nifty negative after 12050 support was taken out and have been advising holding on to short positions. On last count, we had said that upon breach of 11883 support, 11802 would be the next level to eye.

Nifty yesterday broke 11883 support and plunged all the way to 11844 before closing at 11856. 11802, the bottom made in November, continues to be next major support to eye.

Immediate hurdle on the hourly chart has moved lower to 11970, with the stop-loss of which, trading shorts can be held on to.

The Federal Reserve, at the end of its two-day meeting, is expected to keep interest rates steady and may reinforce the message that it will remain on hold for a while after three cuts earlier in the year. Markets would watch out for updated economic forecasts, the so-called ‘dot plot’ where policymakers submit their interest rate projections for the coming years, and Chairman Powell’s remarks.