NIFTY REBOUNDS FROM THE VICINITY OF 11802 SUPPORT; 11980 IS IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 11802 SUPPORT; 11980 IS IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 0.1%-0.4% after the U.S. Federal Reserve signaled it would not raise interest rates in 2020.

The U.S. central bank left interest rates unchanged  — capping a year where the Fed cut its benchmark rate three times. The central bank also indicated it does not expect any policy changes through at least 2020. Fed Chair Jerome Powell said in a news conference the central bank would have to see a persistent rise in inflation before hiking rates once again.

Treasury yields fell broadly. The benchmark 10-year rate slid to 1.781% while the 2-year yield fell to 1.611%.

Brent futures fell 62 cents, or 1%, to settle at $63.72 a barrel while WTI slipped 48 cents, or 0.8%, to $58.76 a barrel following a surprise build in U.S. crude inventories.

In Europe, FTSE ended flat while DAX and CAC rose 0.6% and 0.2% respectively. Sterling slipped against the dollar after a closely-watched final YouGov poll ahead of today’s U.K. election showed the race has tightened considerably in recent weeks, with Prime Minister Boris Johnson’s Conservative Party now less certain to win an outright majority of seats in Parliament.

AT HOME

Benchmark indices ended higher by four tenth of a percent after a roller coaster session. Sensex settled at 40412, up 172 points while Nifty added 53 points to finish at 11910. Nifty mid-cap index rose 0.8% but small-cap index fell 0.2%. BSE Utilities index climbed 1.5%, becoming top gainer among the sectoral indices, followed by 1.1% higher Power and Oil & Gas indices. Capital Goods and Telecom indices fell 0.8% each, becoming top losers.

FIIs net bought stocks worth Rs 605 cr but net sold index futures and stock futures worth Rs 20 cr and 282 cr respectively. DIIs were net buyers to the tune of Rs 240 cr.

Rupee appreciated 8 paise to end at 70.83/$.

Cabinet yesterday cleared changes in Partial Credit Guarantee Scheme by revising minimum rating of underlying asset pool being purchased to BBB+. Scheme will cover NBFc that slipped into SMA-0 category during 1-year period prior to August 1, 2018.

Cabinet also approved fresh changes to IBC. New norms ring-fence successful applicant from criminal proceedings against offences committed by the previous management of promoters.

OUTLOOK

Today morning, Asian markets are trading with gains of upto 0.8% and SGX Nifty is suggesting about 45 points higher start for our market.

At the risk of repeating, we had turned our view on Nifty negative after 12050 support was taken out and have been advising holding on to short positions. After the benchmark achieved 11883 target, we have been working with next support of 11802 and had advised trailing the stop-loss to 11970 in yesterday's report.

The benchmark, after touching a low of 11832, rebounded sharply to close at 11910 and is set to open above 11950 today.

11980, where 20-DMA is placed, is the immediate hurdle, upon crossover of which, 12080, the top made on 5^th December, would be the next target to eye.

11802, the bottom made in November, continues to be important immediate support.

November CPI will be out today and is expected to rise to 5.17% from 4.62% in October. Core CPI is however expected to remain steady at 3.46% as against 3.5%.. Industrial production for October would also be released today and is expected to show a degrowth of 5.4 as aginst contraction of 4.3% in September.