NIFTY SET TO REBOUND AFTER ACHIEVING 11980 TARGET; 12118-12150 IS THE RESISTANCE ZONE

NIFTY SET TO REBOUND AFTER ACHIEVING 11980 TARGET; 12118-12150 IS THE RESISTANCE ZONE

WORLD MARKETS

After opening in red, US indices saw a sustained northward move through the session to end with gains of 0.2%-0.6%.

WTI crude, after hitting an intraday high of $64.72, eased to end at $63.27 per barrel, up 22 cents, or 0.3%. Brent, after touching a high of $70.74, cooled off to $68.91, up 31 cents.

European markets fell 0.5%-07%. Euro zone IHS Markit final composite PMI edged up to 50.9 in December from November’s 50.6, slightly beating expectations. France, Germany and Italy all saw service sector PMIs pick up in December to either match or beat forecasts. December’s composite PMI for the U.K. was revised up to 50.0 from an initial “flash” estimate of 49.0.

AT HOME

It was a weak start to the week as benchmark indices nosedived nearly 2%, suffering worst fall in 4 months on the back of geopolitical tensions. Sensex settled at 40676, down 787 points while Nifty lost 233 points to finish at 11993. BSE mid-cap and small-cap indices tumbled 2.3% and 2% respectively. All the BSE sectoral indices ended in red with Metal and Finance indices leading the losses, down 3% and 2.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 104 cr, 977 cr and 476 cr respectively. DIIs were net sellers to the tune of Rs 24 cr.

Rupee depreciated 13 paise to end at 71.93/$.

India's December IHS Markit Services PMI rose to 53.3 from 52.7 in November. Composite PMI rose to 53.7 from 52.7.

OUTLOOK

Today morning, Nikkei and Hang Seng are up 1% and 0.3% respectively while Shanghai is little changed. SGX Nifty is suggesting about 70 points higher start for our market.

In yesterday's report we had reiterated the view that 12118, the low made on 26th December, continues to be important immediate support, upon breach of which, 12060 and 11980, the 50% and 67% retracement levels of the recent 11832-12294 upmove, would be next support levels to eye.

Nifty broke 12118 support and plunged all the way to 11974 before closing at 11993, achieving 11980 target and vindicating our view. The index however, is set to open near 12050 today.

11974, the low made yesterday, is now the immediate support, upon breach of which, 11832, the bottom made in December, would be the next crucial support to eye.

12118-12150, the previous support zone, would now act as immediate hurdle. Upon crossover of 12150, 12294, the top made in December, would be major hurdle.

First advance estimate of FY20 GDP will be released today and is expected to show a print of 5%.