17688 IS IMMEDIATE SUPPORT; 18000 IMMEDIATE HURDLE

 

17688 IS IMMEDIATE SUPPORT; 18000 IMMEDIATE HURDLE

 

WORLD MARKETS

 

Dow and S & P 500 fell 0.8% and 0.1% on Friday as stocks related to reopening of economy dropped on concerns over a resurgence of Covid-19 while Nasdaq gained 0.4% as tech shares pushed higher.

 

Austria announced it would re-enter a full national lockdown due to a spike in Covid cases. That followed new restrictions for unvaccinated people in Germany, introduced Thursday as a fourth wave sent daily cases to a record high.

 

The House of Representatives passed President Biden’s $1.7 trillion social safety net bill, sending it to the Senate.

 

US 10-year Treasury yield fell 4.8 bps to 1.539%. Dollar index climbed 0.489% to 96.029, close to the 16-month high of 96.266 hit on Wednesday. Spot gold fell 0.6% to $1,848.05 per ounce.

 

Brent futures for January fell $2.35 or 2.9% to $78.89 a barrel while WTI crude dipped $2.91 or 3.8% to $75.44 per barrel.

 

FTSE, DAX and CAC fell 0.4% each. ECB President Lagarde reinforced her view that euro zone inflation will fade, and said the ECB should not look to tighten monetary policy as it could hamper the bloc’s recovery. U.K. retail sales increased 0.8% month-on-month in October, slightly exceeding the 0.5% expectation. Excluding fuel, sales grew by 1.6% on the month against a 0.6% forecast.

 

For the week, Dow fell 1.3% but S & P 500 and Nasdaq gained 0.3% and 1.2% respectively. In Europe, FTSE plunged 1.7% while CAC and DAX gained 0.3% each. In Asia, Shanghai Composite and Nikkei gained 0.6% and 0.5% respectively, while Hang Seng and Nifty fell 1.1% and Nifty 1.9% respectively. Oil fell for 4th straight week as surging COVID-19 cases in Europe threatened to slow the economic recovery while markets also weighed a potential release of crude reserves by major economies to cool prices.

 

AT HOME

 

Benchmark indices tumbled nearly three fourth of a percent, extending the losing streak to third straight day and closing at 3-wek low. Sensex settled at 59575, down 433 points while Nifty lost 133 points to finish at 17764. Nifty mid-cap and small-cap indices nosedived 1.4% and 1.6% respectively. All the BSE sectoral indices ended in red with Metal and Auto indices leading the losses, down 2.8% and 2.3% respectively.

 

FIIs net sold stocks and index futures worth Rs 3931 cr and 180 cr respectively but net bought stock futures worth Rs 81 cr. DIIs were net buyers to the tune of Rs 1886 cr.

 

Rupee appreciated 3 paise to end at 74.24/$.

 

For the week, Sensex and Nifty fell 1.8% and 1.9% respectively, snapping 2-week winning streak.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are down 0.3% and 0.1% respectively while Shanghai is up half a percent. SGX Nifty is trading around 17780, suggesting a flattish start when compared to Thursday's close of Nifty futures.

 

In Thursday's report we had said that 17800-17750 was the next support zone to eye.

 

Nifty plunged to 17688 before closing at 17764 and is set to open near 17700 today.

 

17688, the low made on Thursday, also coincided with a rising trendline adjoining bottoms made in September and hence is the immediate support to eye. Below 17688, 17613 and 17452, the bottoms made on 29th October and 1st October respectively, would be the next downside levels to eye.

 

18000, which roughly coincides with 20 as well as 34-DMA, is the immediate hurdle on the way up, upon crossover of which, 18210, the top made during the week, would be the next upside level to eye.

 

Meanwhile, trading shorts can be held on to with the stop-loss of 18000.

 

For Banknifty, 37500, around which a trendline adjoining July and August is placed, is the next support to eye. Below 37500, 36700 would be the next downside level to eye. 38450-38500 is the immediate resistance zone, above which, 39117, the top made during the week, would be the next upside level to eye.