GLOBAL ECONOMIC CONCERNS CONTINUE TO WEIGH ON EQUITIES; NEGATIVE BIAS CONTINUES ON NIFTY

GLOBAL ECONOMIC CONCERNS CONTINUE TO WEIGH ON EQUITIES; NEGATIVE BIAS CONTINUES ON NIFTY

WORLD MARKETS

Dow and S & P 500 fell 0.6% each and Nasdaq tumble 1% yesterday as relentless fall in oil stoked concern over the global economy.

The fresh declines came as OPEC said it would not cut oil output despite fears of a glut, and a UAE official opposed holding an emergency meeting of the producer group to fix prices. Nymex oil dropped 3.3% to $55.91 a barrel, its lowest closing level since May 2009. Brent fell 65 cents to $61.20.

Economic data was mixed. US industrial production rose 1.3% in November vs expectation of a 0.6% rise. Home builder sentiment fell a point in December after a large jump last month. New York state manufacturing activity shrank in December.

European markets fell between 2%-2.8%.

Russia hiked its key interest rate to 17% from 10.5% effective Tuesday, citing rising devaluation and inflation risks.

AT HOME

After a gap down opening, benchmark indices recouped most of the losses in the initial trade itself and traded in a narrow range through rest of the session to finally end just marginally lower. Sensex lost 31 points to settle at 27350 while Nifty finished at 8220, down 4 points. BSE mid-cap and small-cap indices lost 0.5% and 0.6% respectively. Except a 0.4% rise in BSE Bankex, all other sectoral indices ended in red with Realty and Consumer Durable indices leading the tally, giving away 2% each.

November WPI came in at zero v/s 1.77% in October on the back of a continuous decline in fuel and food prices.  Core inflation fell to 2.21% from 2.5%.

FIIs net sold stocks and stock futures worth Rs 456 cr and 889 cr respectively but net bought index futures worth Rs 179 cr. DIIs were net buyers to the tune of Rs 136 cr.

Rupee plunged 65 paise, the most in over 4 months, to end at 62.94/$, the weakest level in 10-1/2 months.

November trade deficit hit an 18-month high of $17 bn as exports grew by tepid 7.3% to $26 bn while imports jumped 27% to $43 bn.

To revive stalled plans and help banks tide over mounting bad loans, the RBI yesterday eased norms for structuring of existing long-term project loans to infrastructure and core industries. The new guideline widens the scope of 5:25 scheme by including existing standard long-term project loans worth over Rs 500 crore to be flexibly structured and refinanced.

OUTLOOK

China's December HSBC flash PMI has come in at 49.5, lower than the estimated 49.7 figure and down from 50 in November. This is the first contraction since April.

Today morning Nikkei is down nearly 2%. Other Asian markets, except a marginally higher Shanghai, are trading with cuts of 0.5%-1%. SGX Nifty is suggesting about 60 points lower opening for our market.

In yesterday's report we had mentioned that Nifty has decisively broken important supports on the daily chart placed around 8300 and next supports to eye are 8175 and 8070, which are the 50% and 61.8% retracement levels of the 7723-8627 upmove.

Nifty yesterday saw a gap down opening and touched a low of 8152.50 from where it rebounded smartly to end at 8220. Today however, another gap down opening will take it back around the lowest level touched yesterday. Next important support to watch out continues to be 8070.

Immediate resistance on the hourly chart is placed around 8340, with the stop loss of which trading shorts should be held on to.

WORLD EQUITIES SUFFER NASTY WEEKLY FALL; NIFTY HEADED TO 8175, 8070

WORLD EQUITIES SUFFER NASTY WEEKLY FALL; NIFTY HEADED TO 8175, 8070

WORLD MARKETS                             

US indices nosedived 1.2%-1.8% on Friday with the Dow and S & P 500 posting worst weekly loss of 2014 as crude's ongoing slide rattled investors.

Nymex crude nosedived 3.6% to $57.84, the lowest level since May 2009 after the International Energy Agency reduced its outlook for global demand.  Brent settled down 2.9% at $61.85 per barrel.

Mixed economic data for November from China, where industrial production fell below expectations and retail sales data was slightly higher than expected, also caused concerns about global growth.

U.S. wholesale prices declined 0.2% percent in November after a 0.2% rise the previous month. A measure of consumer sentiment in December exceeded expectations, rising to an eight-year high.

European markets tumbled 2.5%-3.1% on Friday and posted their biggest weekly loss since August 2011 as commodity prices continued to fall and shares in oil-related firms came under renewed pressure from the weak price for crude.

For the week, Dow lost 3.8%, S & P 500 shed 3.5% and Nadaq declined 2.7%. European markets were down between 5%-7%.

AT HOME

It was a weak end to the week as benchmark indices plunged about eight tenth of a percent on Friday, closing in red for the fifth time in last six days. Sensex tumbled 251 points to settle at 27351 while Nifty finished at 8224, down 69 points. BSE mid-cap and small-cap indices lost 1.3% and 1.5% respectively. Except a 0.2% rise in BSE Healthcare index, all other sectoral indices ended in red with Oil & Gas and Realty indices leading the tally, giving away 2.6% and 2.5% respectively.

FIIs net sold stocks and stock futures worth Rs 865 cr and 179 cr respectively but net bought index futures worth Rs 352 cr. DIIs were net buyers to the tune of Rs 323 cr.

Rupee appreciated 4 paise to end at 62.29/$.

For the week, Sensex and Nifty lost 3.9% and 3.7% respectively, marking the largest weekly cuts in three years for Sensex and five months for Nifty.

India's index of industrial output for the month of October slipped to a three-year low of negative 4.2% as against the estimate of a 2.1% growth, led by a degrowth in manufacturing sector, which stood at -7.6% as against 2.5% m-o-m. The sharp fall however was on the back of about 10 public holidays and closing down of Nokia factory.

CPI fell to a fresh low of 4.38% in November from 5.5% in October. Core CPI stood at 5.5% as against 5.85% in October.

TCS on Friday warned of weak revenue growth for the December quarter, arising from seasonality and pressure in its banking, financial services and insurance (BFSI) business.

OUTLOOK

Today morning Asian markets are trading with cuts between 0.5%-1.5% and SGX Nifty is suggesting about 50 points lower opening for our market. Japan's Tankan survey showed that the big manufacturers index slipped to +12 from +13 in the previous quarter, below expectations for a reading of +13.

As you would recall, we have been bearish on Nifty ever since 8500 support on hourly chart was broken on last Monday. In Friday's report we had mentioned that Nifty was at a crucial juncture on its daily chart as it was near to some crucial supports like lower band of bollinger placed around 8300 and 38.2% retracement level of the entire 7723-8627 upmove placed at 8282.

We had also mentioned that 8282 is the final hope for bulls, a sustained trading below which would be a severe setback on the daily chart. And 8175 and 8070, the 50% and 61.8% retracement levels of the 7723-8627 upmove, would be the next supports to eye in that case.

On Friday, Nifty plunged 69 points to end at 8224. Next support to eye is 8175 as mentioned above below which 8070 would be the important support to eye. 8350 is now the immediate resistance on the hourly chart, with the stop loss of which trading shorts should be held on to.

India's wholesale price index for November would be released today and is expected to decline to 1.41% from 1.77% in October, which was the lowest level in more than five years.

NIFTY TUMBLES TO LOWEST LEVEL SINCE OCTOBER AMIDST FII SELLING; CPI, IIP IN FOCUS

NIFTY TUMBLES TO LOWEST LEVEL SINCE OCTOBER AMIDST FII SELLING; CPI, IIP IN FOCUS

WORLD MARKETS

US indices, after rising 1%-1.5% in the initial trade, gave away about two third of the gains through the session to end higher upto half a percent.

Initial surge was on the back of positive economic data. Retail sales rose 0.7% in November, the largest increase in eight months. Jobless claims fell by 3000 to 294000 last week.

Pullback started after Nymex crude dropped below $60 a barrel and accelerated amid efforts to block a spending bill in the House, sparking worries of the government closing.

Nymex oil fell 1.6% to $59.95 a barrel, its lowest since July 2009.

European markets ended mixed with Germany and Spain in the green while others ending in red. Data showed that the uptake of a low-rate loan program by the ECB, known as a targeted long-term refinancing operation (TLTRO), met market expectations.

On the data front, a second reading of French inflation data showed that consumer prices were weaker than expected in November, showing a monthly drop of 0.2% percent, compared to a flash figure of -0.1%. Germany's inflation figure was unchanged for November. Meanwhile Germany's Ifo institute released its 2015 outlook which expected 1.5% growth for the country next year.

                                                             

AT HOME

After Wednesday's feeble recovery, weakness was back yesterday as benchmark indices ended lower by eight tenth of a percent after a choppy trading session to end at the lowest level since 30th October. Sensex slipped 229 points to settle at 27602 while Nifty finished at 8293, down 63 points. BSE mid-cap and small-cap indices lost two third of a percent. Except a 0.3% rise in BSE Healthcare index, all other sectoral indices ended in red with Oil & Gas and Realty indices leading the tally, giving away 2.5% and 2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 808 cr, 724 cr and 404 cr respectively. DIIs were net buyers to the tune of Rs 432 cr.

Rupee plunged 31 paise to end at 62.33/$, a 10-month low.

OUTLOOK

Today morning Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that Nifty is as at a crucial juncture as it is near to some crucial supports like lower band of bollinger placed around 8300 and 38.2% retracement level of the entire 7723-8627 upmove placed at 8282.

Nifty yesterday ended at 8293, closing below the lower band of bollinger but holding the 8282 support.

8282 is the final hope for bulls. A sustained trading below this would be a severe setback on the daily chart. 8175 and 8070, the 50% and 61.8% retracement levels of the 7723-8627 upmove, would be the next supports to eye in that case.

Having said that, Nifty made a positive divergence on hourly chart yesterday, which suggests that there is less strength in yesterday's selling. Therefore traders would do well to wait for the breach of 8282 for initiating fresh shorts. 8430 continues to be immediate resistance, only above which bulls have an upper hand. Till then every rally should be taken with a pinch of salt.

India's Consumer Price inflation for November would be released today and is expected to further decelerate to 4.4% from 5.5% in October.

Also in focus would be October IIP, which is expected to show a growth of 2.1% as against an uptick of 2.5% in September.

PLUNGING OIL TAKES US EQUITIES TO ONE MONTH LOW; NIFTY AT A CRUCIAL JUNCTURE

PLUNGING OIL TAKES US EQUITIES TO ONE MONTH LOW; NIFTY AT A CRUCIAL JUNCTURE

WORLD MARKETS                             

US indices plunged between 1.5%-1.7% yesterday, with the Dow and S & P 500 suffering the worst fall in 2 months and closing at one month low, as energy stocks plunged after price of crude fell to a new five-year low, raising global growth concerns.

Nymex crude plunged 4.5% to settle at $60.94 a barrel, while Brent fell below $65 for the first time since 2009 after OPEC lowered its demand outlook for 2015 to the lowest level in 12 years and US crude inventories rose to the highest seasonal level in weekly data that started in 1982.

European markets, except a marginally higher DAX, ended with cuts between 0.4%-0.9% as Greek political fears and slumping oil prices weigh.

Tension between Ukraine and Russia remained heightened after Ukraine's military accused separatists of violating a ceasefire.

AT HOME

After a negative start, benchmark indices recovered nearly half a percent from the bottom of the day to end modestly higher. Sensex gained 34 points to settle at 27831 while Nifty finished at 8356, up 15 points. BSE mid-cap and small-cap indices surged 0.9% and 1.1% respectively. BSE Consumer Durable index and Bankex gained the most among the sectoral indices, rising 2.4% and 1% respectively while Capital Goods and IT indices lost 1% and 0.2% respectively.

FIIs net bought stocks worth Rs 5 cr but net sold index futures and stock futures worth Rs 845 cr and 426 cr respectively. DIIs were net sellers to the tune of Rs 519 cr.

Rupee fell 14 paise to end at 62.02/$.

A Parliamentary Committee yesterday recommended a composite foreign investment cap of 49% in the insurance sector and supported a government Bill to amend the Act. At present, a limit of 26% is allowed only through the FDI route.

Coal Minister Piyush Goyal yesterday, in Lok Sabha, introduced The Coal Mines (Special Provisions) Bill 2014. This bill will replace an ordinance which outlines the procedure for auction of coal blocks that were cancelled by the Supreme Court in September.

OUTLOOK

The Union cabinet yesterday allowed state-run banks to meet their high capital requirements by diluting the government's holding in them by up to 52% in a phased manner.

Today morning, Nikkei is down more than a percent on the back of worse-than-expected machinery orders and the strength in yen. Other Asian markets are trading with cuts of upto 1% and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that while Nifty has achieved the downside target of 8350, it continues to be in a sell mode and next support to eye is 8282, which is the 38.2% retracement level of the entire 7724-8627 upmove. 8282 continues to be the next support to eye.

On the way up, 8430, the erstwhile support would continue to be the immediate resistance.

Having said that, Nifty is at a very crucial juncture on its daily chart. Yesterday, it bounced back from the lower band of bollinger placed around 8300. A close below this technical indicator will turn the view on the daily chart negative. Therefore, traders are advised to book profit in short positions for the time being and wait for the breach of this important support on closing basis before initiating fresh shorts.

CHINA, GREECE JITTERS SPOOK WORLD EQUITIES; NIFTY ACHIEVES 8350 TARGET

CHINA, GREECE JITTERS SPOOK WORLD EQUITIES; NIFTY ACHIEVES 8350 TARGET

WORLD MARKETS

After plunging more than a percent in the initial trade, US indices recovered most of the ground through the remaining session to end mixed. Dow ended lower by 0.3%, S & P closed flat while Nasdaq gained 0.5%.

The initial fall was attributed to global growth concerns, political uncertainty in Greece and a selloff in Chinese shares.

Earlier China's benchmark index fell by as much as 6%. The sell-off was attributed to profit-taking, concerns about growth prospects in 2015 and newly announced corporate bond market restrictions.

Greek stocks closed nearly 13% lower, after the country's president shocked investors by announcing a snap presidential vote for next week, potentially, setting the scene for snap elections in early 2015.

Back in the US, whole inventories rose 0.4% in October versus expectations for a 0.1% gain. Another report had small business optimism rising in November to its highest level in almost eight years.

European markets nosedived 2%-3%.

Oil bounced back from a five-year low, with Nymex crude rising 1.2% to $63.8 a barrel and Brent ending 60 cents higher at $66.8; Gold jumped 3.1% to $1232 an ounce.

                                                             

AT HOME

Monday’s Sell-off extended as benchmark indices plunged another percent and fifth in yesterday’s trade to end at 1-month low. Sensex sank 322 points to settle at 27797 while Nifty finished at 8340, down 97 points. BSE mid-cap and small-cap indices tumbled 1.6% each. All the BSE sectoral indices ended in red with Power and Metal indices leading the tally, giving away 2.8% and 2.7% respectively.

FIIs net sold stocks and stock futures worth Rs 222 cr and 802 cr respectively but net bought index futures worth Rs 210 cr. DIIs were net sellers to the tune of Rs 345 cr.

Rupee depreciated 5 paise to end at 61.88/$.

OUTLOOK

China's November CPI has eased to 1.4% from 1.6% in October, marking the lowest reading since November 2009 and adding to concerns of cooling activity. PPI fell for the 33rd straight month, down 2.7% y-o-y, worse than the 2.2% drop in October.

Nikkei is down about a percent and half as the Yen has rebounded back into 119 area, off Monday's seven-year low. Other Asian markets are trading flat to modestly lower. SGX Nifty is suggesting about 35 points lower opening for our market.

Just to reiterate, for whole of last week, we had been cautioning that after a steep run-up, Nifty is showing signs of fatigue. We had also mentioned that a breach of 8500 would generate a sell on the hourly chart and would pave the way for the correction to 8430 and then to 8350.

The benchmark plunged to 8330 yesterday before ending at 8340, achieving the target mentioned above and vindicating our view.

The benchmark continues to be in the sell mode on the hourly chart. Next support to eye is 8282, which is the 38.2% retracement level of the entire 7724-8627 upmove. 8430, the erstwhile support, would now act as the immediate resistance, with the stop loss of which trading shorts can be held on to.

OIL PLUNGES TO FRESH FIVE-YEAR LOW; NIFTY TUMBLES TO 8430 AS EXPECTED

OIL PLUNGES TO FRESH FIVE-YEAR LOW; NIFTY TUMBLES TO 8430 AS EXPECTED

WORLD MARKETS                             

US indices plunged between 0.6%-0.8% yesterday, with the Dow registering biggest fall since October, weighed down by energy stocks on the back of melting oil.

Both Brent and U.S. crude tumbled 4% to new five-year lows after Morgan Stanley cut its Brent forecast. Nymex crude nosedived 4.2% or $2.8 to $63.05 a barrel, the lowest level since July 2009. Brent crude dropped $2.9 to $66.2, the lowest since September 29, 2009.

McDonald's fell after the fast-food chain reported global comparable sales declined 2.2% last month. Apple fell sharply, with the consumer-technology maker leading the technology sector lower.

Also weighing on the sentiment was weak Chinese trade data for November. Exports rose 4.7%, missing the 8% estimate. Imports fell 6.7% compared with projections of a 3.8% increase. Separately, Japan's economy contracted more than anticipated in the third quarter.

European markets fell between 0.7%-1%.

AT HOME

After last week's consolidation with a negative bias, benchmark indices decided to start the fresh week on a weak note by falling a percent and fifth yesterday, marking the largest fall since 16th October. Sensex slumped 339 points to settle at 28119 while Nifty finished at 8438, down 100 points. BSE mid-cap and small-cap indices lost 1.2% and 0.9% respectively. Except a 0.8% rise in BSE FMCG index, all other sectoral indices ended in red with IT and Teck indices leading the tally, giving away 3.2% and 2.6% respectively.

FIIs and DIIs net bought stocks worth Rs 4985 cr and 1031 cr respectively. But excluding Infosys deal, they were net sellers to the tune of about Rs 200 cr and Rs 270 cr respectively. FIIs net bought index futures worth Rs 60 cr but net sold stock futures worth Rs 1172 cr.

Rupee depreciated 6 paise to end at 61.83/$.

Infosys plunged nearly 5% after four founders sold shares worth Rs 6484 cr in the company.

India's current account deficit for the July-September quarter rose marginally to USD 10.1 bn (2.1% of GDP) from USD 7.8 billion (1.7% of GDP) on account of higher trade deficit contributed by both a deceleration in export growth and a n increase in gold imports.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 20 points lower opening for our market.

Ever since Nifty made an all-time closing high on 28th November, we have been mentioning that a negative divergence on daily chart has occurred which suggests that some sort of fatigue is setting in. We had also cautioned that a breach of 8500 would generate a sell on the hourly chart and could take Nifty to 8430 and then to 8350.

Nifty yesterday broke the 8500 support and plunged all the way to 8432, vindicating our view.

The benchmark continues to be in the sell mode on the hourly chart and next support on the way down continues to be about 8350.

On the way up, immediate resistance on the hourly chart is placed around 8530, with the stop loss of which, short positions can be held on to.

NIFTY BREAKS SIX-WEEK WINNING STREAK; 8500 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY BREAKS SIX-WEEK WINNING STREAK; 8500 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained about a fourth of a percent on Friday following a robust jobs report, with the Dow and S & P 500 scaling record high and posting a seventh week of gains.

U.S. employers created 321,000 jobs last month, the largest gain since January 2012. The unemployment rate remained unchanged at a six-year low of 5.8%, and hourly wages increased 0.4%. The reported number for October was revised higher to 243,000 jobs.

Another report Friday had orders for U.S. factory goods falling 0.7% in October.

The dollar index surged to 89.30, its highest level since April 2006. Nymex oil fell 1.5% to a five-year low of $65.84 a barrel and gold dropped 1.4% to $1190 an ounce.

European markets surged between 1%-3.4%. Europe's statistics agency, Eurostat, confirmed its previous estimates of 0.2 percent growth in the euro zone in the third quarter.

AT HOME

It was a weak end to the week as benchmark indices, after a flattish start, saw a sustained downward move through the session on Friday to end lower by a third of a percent. Sensex lost 105 points to settle at 28458 while Nifty finished at 8538, down 26 points. BSE mid-cap index lost 0.3% while the small-cap index gained 0.03%. BSE IT and Teck indices were the top losers among the sectoral indices, giving away 1.8% and 1.5% respectively while Realty and FMCG indices gained 1.3% and 1.1% respectively. 

FIIs net sold stocks and stock futures worth Rs 109 cr and 130 cr respectively but net bought index futures worth Rs 300 cr. DIIs were net buyers to the tune of Rs 166 cr.

Rupee appreciated 15 paise to 61.77/$.

For the week, Sensex and Nifty lost 0.8% and 0.6% respectively, breaking six-week winning streak.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

For whole of last week we have been cautioning that after a heady runup starting mid-October, market is looking tired with Nifty forming a negative divergence on the daily chart on Friday, the 28th November. Since then we have been working with a stop loss of 8500, a sustained trading below which would generate a sell on the hourly chart and would pave the way for further correction. 8430 would be the nearest support to eye in that case, followed by 8350.