NIFTY RETREATS FROM 12070 HURDLE; 11935 IS IMMEDIATE SUPPORT

NIFTY RETREATS FROM 12070 HURDLE; 11935 IS IMMEDIATE SUPPORT

WORLD MARKETS

US indices ended marginally higher, digesting strong employment data and monitoring the latest news from the U.S.-China trade negotiations.

U.S. weekly jobless claims dropped 203,000 last week, their lowest in six months and below a Reuters estimate of 215,000.

Chinese Commerce Ministry spokesman Gao Feng said Thursday the two sides remain in close communications regarding trade. He added that China “believes if both sides reach a phase-one agreement, relevant tariffs must be lowered.”

The U.S. trade deficit tumbled to 7.6% to $47.2 billion in October, a 1½-year low as imports dropped by $4.3 billion.

WTI crude settled unchanged at $58.43 while Brent crude futures rose 44 cents to $63.45, awaiting the decision from OPEC on its production policy.

In Europe, FTSE and DAX fell 0.7% each while CAC ended flat. German industry orders dropped 0.4% in October. The euro zone grew at a pace of 0.2% in the third-quarter of the year, unchanged from the previous quarter.

AT HOME

Benchmark indices ended lower by a fifth of a percent after a choppy session. Sensex settled at 40779, down 70 points while Nifty lost 24 points to finish at 12018. BSE mid-cap index fell 0.3% while small-cap index ended flat. BSE Telecom and Metal indices tumbled 2.6% and 2.4% respectively, becoming top losers among the sectoral indices while IT and Consumer Durables indices were the top gainers, up 1% and 0.7% respectively.

FIIs net bought stocks worth Rs 653 cr but net sold index futures and stock futures worth Rs 665 cr and 273 cr respectively. DIIs were net sellers to the tune of Rs 410 cr.

Rupee appreciated 24 paise to end at 71.28/$.

As against the wide expectation of a rate cut, the Monetary Policy Committee of RBI unanimously decided to keep key repo rate unchanged at 5.15%, as it decides to wait for past policy actions, undertaken by the government and the central bank, to play out. The RBI said it will maintain an “accommodative stance as long as it is necessary". RBI cut GDP growth forecast to 5% for FY20 and 5.9%-6.3% for H1 FY21. It raise inflation forecast for H2 FY20 to 5.1%-4.7%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.1%-0.5% and SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had said that 12070, the top made on Tuesday, continued to be immediate hurdle while 11883, the bottom made on 22nd November, continued to be downside support to eye.

Nifty, after touching a high of 12081, plunged to 11998 before closing at 12018.

12081, the top made yesterday, which roughly coincided with our indicated hurdle, is the immediate resistance, a crossover of which is required for a fresh upmove. If that happens, 12158, the top made last week, would be the next resistance to eye.

11935, the low made Wednesday is the immediate support below which, 11883, the bottom made on 22nd November, would be next major support to eye.