17774 IS IMPORTANT SUPPORT; 18085 IMMEDIATE HURDLE

 

17774 IS IMPORTANT SUPPORT; 18085 IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices surged 2.1%-2.6% on Friday after the December jobs report and an economic activity survey showed signs that inflation may be cooling. It was the best day for the Dow and S&P 500 since Nov. 30 and the best for the Nasdaq since Dec. 29.

 

The December nonfarm payrolls report showed that the U.S. economy added 223,000 jobs last month, slightly higher than the expected 200,000 jobs. Wages however grew slower than anticipated, increasing 0.3% on the month where economists expected 0.4%. ISM’s nonmanufacturing PMI showed that U.S. services industry activity contracted for the first time in nearly three years in December.

 

US 10-year treasury yield plunged 16 bps to 3.56%. Dollar index slipped 1.2% to 103.91. Gold climbed 1.8% to $1865 per ounce.

 

Brent futures fell 0.2% to $78.57 a barrel while WTI crude rose 0.1% to settle at $73.77.

 

European markets gained 0.9%-1.5%. Euro zone December inflation eased to 9.2% y-o-y in December from November's 10.1%.

 

For the week, the Dow and S&P 500 each closed up 1.5% while the Nasdaq advanced 1%. European markets surged 3.3%-6%. In Asia Hang Seng and Shanghai soared 6.7% and 2.5% respectively but Nikkei and Nifty fell 0.7% and 1.4% respectively.

 

Both Brent and WTI were down over 8%, their biggest weekly dives to start the year since 2016.

 

AT HOME

 

Repeating Thursday's template, benchmark indices, after rising 0.3% in the initial trade, nosedived a percent from the top to end lower by three fourth of a percent on Friday, extending the losing streak to third straight day and closing at the lowest level after 23rd December. Sensex settled at 59900, down 453 points while Nifty lost 132 points to finish at 17859. Nifty mid-cap and small-cap indices fell 0.8% each. Except marginally higher Consumer Durables and FMCG indices, all the NSE sectoral indices ended in red, with IT and Media indices being the top losers, down 2% and 1.4% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2902 cr, 72 cr and 354 cr respectively. DIIs were net buyers to the tune of Rs 1083 cr.

 

Rupee depreciated 16 paise to end at 82.72/$.

 

For the week, Sensex and Nifty fell 1.5% and 1.4% respectively, closing in the red for the fourth week in last five.

 

OUTLOOK

 

Nikkei is shut today while Hang Seng and Shanghai are up 1.7% and 0.4% respectively. SGX Nifty is suggesting around 130 points higher start for our market.

 

In Friday's report we had said that 17892, the low made Thursday, was the immediate support, below which, 17774, the bottom made previous week, would be the next downside level to eye. We had also advised holding short positions with the stop-loss of 18140.

 

Nifty broke 17892 and plunged all the way to 17795 before closing at 17859 and is set to open near 17950 today.

 

17774, the low made in December, is the important immediate support to eye. If this level gives way, 17565, the 61.8% retracement level of the 16747-18887 upmove, would be the next downside level to eye. On the way up, 18085 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 41569, the low made in December, is the important immediate support to eye. 42900 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

TCS will report it's quarterly earnings today.