7700 ACHIEVED, 7540 NEXT

7700 ACHIEVED, 7540 NEXT

WORLD MARKETS                             

Dow and S & P 500 fell 0.9% and 0.6% respectively while Nasdaq lost 0.1% yesterday as soft China trade data and some anxiety ahead of the Fed's meeting next weighed on the sentiment.

China's November exports fell 6.8% y-o-y in their fifth month of contraction, while imports were down 8.7%, marking a record 13th month of decline. Shanghai 

Nymex oil settled 14 cents or 0.4% lower at $37.51 a barrel. Brent fell 44 cents to $40.28 a barrel.

European markets, weighed down by basic resources sector, tumbled 1.6%-2.3%.

AT HOME

Benchmark indices plunged eight tenth of a percent in today's trade, extending the losing streak to fifth straight day and closing at the lowest level since 8th September, marking a 3-month low. Sensex settled at 25310, down 220 points while Nifty lost 64 points to finish at 7702. BSE mid-cap and small-cap indices lost 1.2% and 1.3% respectively. All the BSE sectoral indices ended in red with Realty and Metal indices leading the tally, down 3.7% and 3.2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 518 cr, 192 cr and 193 cr respectively. DIIs were net buyers to the tune of Rs 590 cr.

Rupee depreciated 11 paise to end at 66.8350/$, the lowest level since Sep 4 2013

Congress stalled proceedings in Parliament yesterday after the Delhi High Court rejected the plea of Congress President Sonia Gandhi and her son Rahul to quash summons against them in the National Herald case.

OUTLOOK

Today morning, Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

At the risk of repeating, we had advised going short on Nifty when immediate support of 7880 was broken on 3rd December for targets of 7760 followed by 7700. We had also said that a breach of 7700 would open up the possibility of retest of the 7540 bottom made in early September.

The benchmark touched a low of 7685 yesterday before closing at 7702, achieving the 7700 target.

The setup however continues to be and 7540 continues to be the next downside target to eye. Immediate resistance on the hourly chart has moved to 7820, with the stop loss of which short positions should be held on to.

NIFTY SET TO ACHIEVE 7700 TARGET

NIFTY SET TO ACHIEVE 7700 TARGET

WORLD MARKETS                             

US indices fell about seven tenth of a percent, weighed by a sharp decline in energy stocks as oil plunged to a near-seven-year low.

Nymex oil fell $2.32 or 5.80% to $37.65 a barrel, the lowest since February 2009. Brent settled down 5.3% to $40.73. The decline came after the Organization of the Petroleum Exporting Countries failed on Friday to agree on a production curb to stem sliding prices and a stronger dollar made holding crude positions more expensive. Instead OPEC oil ministers dropped any reference to the group's output ceiling for the first time in decades. This highlighted disagreements among members on how to accommodate Iranian oil supply in the market once Western sanctions are lifted.

European markets ended mixed. FTSE lost 0.2% while DAX and CAC gained 1.2% and 0.9% respectively.

AT HOME

After a gap up opening, Sensex and Nifty tumbled 1% and 0.8% from the top the day to end lower by 0.4% and 0.2% respectively. Sensex settled at 25530, down 108 points while Nifty lost 16 points to finish at 7765. BSE mid-cap index lost 0.1% while the small-cap index gained 0.2%. BSE FMCG index plunged 2.4%, becoming top loser among the sectoral indices, followed by 1% cut in Energy index. Healthcare and Realty indices gained 0.8% and 0.5% respectively.

FIIs net sold stocks and stock futures worth Rs 65 cr and 41 cr respectively but net bought index futures worth Rs 35 cr. DIIs were net sellers to the tune of Rs 55 cr.

Rupee depreciated 3 paise to end at 66.725/$.

ITC plunged nearly 7% on the back of the government-appointed Arvind Subramanian panel's recommendation of a steep 40% tax on tobacco products.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 55 points lower opening for our market.

In yesterday's report we had clearly indicated that "While the benchmark is set for a gap up opening, the bias would continue to be negative until immediate hurdle on the hourly chart, placed around 7900 is taken out."

Nifty, after touching a high of 7825 in the initial trade, plunged to end at 7765, vindicating our negative bias and achieving the 7760 target we had given earlier.

In Friday's report we had also mentioned that below 7760, 7700, where multiple supports on the daily chart are placed, would be the next target to eye.

A gap down opening today would take Nifty closer to that level. Upon breach of 7700, 7540, the bottom made in early September, would be the next major target to eye.

Traders are advised to hold on to short positions with the stop loss of 7860, which is the immediate resistance on the hourly chart. We had initiated "Short Nifty" recommendation around 7880 and it would not be a bad idea to book some profit around 7700.

NIFTY NEARLY ACHIEVES 7760 TARGET; 7900 IS THE IMMEDIATE HURDLE

NIFTY NEARLY ACHIEVES 7760 TARGET; 7900 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices soared 2.1% on Friday on the back of a strong jobs report and ECB President Mario Draghi maintaining a dovish stance in a speech.

Nonfarm payrolls data showed the U.S. economy created 211,000 jobs and increase in wages for November, beating market expectations. The number of jobs created in October and September were also revised higher. The unemployment rate stood unchanged at 5%. This should help bolster the case for the U.S. Federal Reserve to raise rates at its December meeting.

The U.S. trade deficit widened unexpectedly by 3.4% to $43.9 billion in October as exports fell to a three-year low, suggesting that strong dollar pressure on trade could again weigh on economic growth in the fourth quarter.

European Central Bank President Mario Draghi said quantitative easing was unlimited."There is no particular limit to how we can deploy any of our tools," he said.

European markets, except a 0.1% rise in FTSE, lost upto 0.6%.

Nymex oil settled 2.7% lower at $39.97 a barrel after OPEC left its production levels unchanged for the third year in a row despite a global supply glut. Gold climbed $23 to $1084 an ounce.

For the week, Dow and Nasdaq gained 0.3% each and S & P 500 rose 0.1%. European markets however fell 2.2%-4.8% with DAX leading the tally. Nymex oil fell 4.2% for the week.

AT HOME

After a gap down opening, benchmark indices saw a rangebound but choppy trade through rest of the session and finally ended lower by a percent, extending the losing streak to third straight day and closing at the lowest level since 18th November. Sensex settled at 25638, down 249 points while Nifty lost 82 points to finish at 7782. BSE mid-cap and small-cap inidces lost 1.1% and 0.6% respectively. Except a 0.4% and 0.1% higher Healthcare and Metal indices respectively, all the BSE sectoral indices ended in red with Utilities and Power indices leading the tally, down 2% and 1.8% respectively.

Sun Pharma surged 4% after the company announced that it has received approval from the US FDA for generic version of Gleevec, a drug that treats a rare form of blood cancer.

For the week, Sensex and Nifty lost 1.9% and 2% respectively, breaking the two-week winning streak.

FIIs net sold stocks, index futures and stock futures worth Rs 1745 cr, 966 cr and 325 cr respectively. DIIs were net buyers to the tune of Rs 1069 cr.

Rupee depreciated 4 paise to end at 66.695/$.

The committee, led by Chief Economic Advisor Arvind Subramanian submitted its report on GST to Finance Minister.  The committee decided to provide a range for the GST rate for various products and services: from 12% to 40% (the higher rate being applicable for select products such as luxury cars or tobacco products, etc). However, the key revenue neutral rate suggested by the CEA panel stood at 15-15.5%. The standard rate for GST stood at 17-18%, the rate at which most products would likely be taxed. The panel excluded real estate, electricity and alcohol and petroleum products while calculating the tax rate, as some states have expressed reservations over giving up tax control on the lucrative items but the CEA panel suggested these be brought under the GST ambit soon.

OUTLOOK

Today morning Nikkei is up a percent and half, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 40 points higher opening for our market.

Readers would recall that last week, we had advised going short below the immediate support of 7890 for the target of 7760, where the trendline adjoining recent bottoms on the hourly chart was placed. The benchmark, after breaking 7890 support on Thursday, plunged to 7775 on Friday before closing at 7782, vindicating our view.

While the benchmark is set for a gap up opening, the bias would continue to be negative until immediate hurdle on the hourly chart, placed around 7900 is taken out.

7775, the bottom made on Friday, would now be the immediate support below which 7714-7690 region, where multiple supports on the daily chart are placed, would be the import support area to eye. 

STAY SHORT WITH THE STOP LOSS OF 7930 FOR TARGETS OF 7760, 7700

STAY SHORT WITH THE STOP LOSS OF 7930 FOR TARGETS OF 7760, 7700

WORLD MARKETS                             

US indices plunged nearly a percent and half yesterday as treasury yields climbed amidst worries the Fed would raise rates while the economy is still weak and ECB president Mario Draghi announced monetary policy measures that fell short of market expectations.

Fed chair Janet Yellen said in a testimony before Congress that economic data since October backs the central bank's expectations of an improved job market. She added the bank will need to be cautious about raising rates form near zero, but added that - even after an initial increase - Fed funds rates would remain accommodative.

ECB cut deposit rate by 10 basis points to negative 0.3% and said it would extend its asset purchase program to at least March 2017 but did not increase the amount, falling short of expectations.

Dollar index fell more than 2% to below 98 after hitting more than 12 year high of 100.51 Wednesday. Euro climbed above $1.09 to hit its highest since Nov. 3. The German 10-year yield jumped above 0.6%.

Nymex oil rose $1.14 or 2.8% to $41.08 a barrel, helped by a weaker dollar and some speculation that Saudi Arabia would propose a deal to balance oil markets with help from non-OPEC members in 2016 in today's OPEC meeting.

US ISM nonmanufacturing for November came in at 55.9, down from 59.1 in October. Domestic factory orders rose 1.5% in October, beating expectations of 1.3%. Initial jobless claims rose to 269,000.

European markets nosedived 2.3%-3.6%

AT HOME

Benchmark indices tumbled nine tenth of a percent in yesterday's trade, extending the losing streak to second straight day. Sensex settled at 25887, down 231 points while Nifty lost 67 points to finish at 7864. BSE mid-cap and small-cap indices lost 0.4% and 0.5% respectively. Except a 0.4% rise in BSE Realty index, all the sectoral indices ended in red with FMCG and Consumer Durable indices leading the tally, down 1.5% and 1.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 611 cr, 509 cr and 222 cr respectively. DIIs were net buyers to the tune of Rs 521 cr.

Rupee depreciated 6 paise to end at 66.6525/$.

India's Nikkei Services PMI for November hit a 5-month low of 50.1, easing from 53.2 in October.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5% to 1.5% and SGX Nifty is suggesting about 50 points lower opening for our market.

In yesterday's report we had mentioned that a sustained trading below immediate 7890 support would generate a sell on the hourly chart and 7760, where the trendline adjoining recent bottoms on the hourly chart is placed, would be the next downside target to eye in that case. We had also advised going short if the bottom made in first hour is breached.

The benchmark broke 7890 support and plunged all the way to 7853 before closing at 7864 and is set to open around 7800, vindicating above mentioned view.

7760 continues to be immediate support below which 7700, where the multiple bottoms on the daily chart are placed, would be the important support to eye.

Traders are advised to hold on to short positions with the stop loss of 7930, where the immediate hurdle on the hourly chart is placed.

Key data to watch out today would be the US non-farm payroll for November where addition of 2.01 lac jobs is expected after last month's blowout 2.71 lac reading.

OIL TUMBLES BELOW $40 WHILE DOLLAR INDEX SPIKES TO 12-1/2 YEAR HIGH

OIL TUMBLES BELOW $40 WHILE DOLLAR INDEX SPIKES TO 12-1/2 YEAR HIGH

WORLD MARKETS                             

US indices fell 0.6%-1.1% yesterday as oil plunged, putting pressure on energy stocks.

Nymex oil tumbled 4.6% to $39.94 a barrel, below $40 for the first time in three months after weekly crude oil inventories showed an unexpected rise of 1.2 million barrels.

A mass shooting in San Bernardino, California, during the afternoon trading session also weighed on the sentiment.

Fed's Beige Book said consumer spending increased in nearly all districts while the manufacturing sector remained mixed, under continued pressure from the strong dollar, low commodity prices and weak global demand.

Ahead of Friday's November jobs report, ADP data showed November private payrolls topped expectations at 217,000. Revised third-quarter productivity rose 2.2%, while unit labor costs rose 1.8%.

Fed Chair Janet Yellen reaffirmed the case for a rate hike at the Fed's Dec. 16 meeting but reiterated that the decision will be data dependent.

Dollar index spiked to 100.51, its highest level since April 2003, before closing below 100. Gold fell $10 to $1054 an ounce.

European markets, except a 0.4% higher FTSE, lost 0.2%-0.6%. Euro zone, inflation grew 0.1% year-on-year in November. This is well-below the ECB's target of 2% and could push the case for further stimulus from the central bank. This sent the euro weaker against the dollar.

AT HOME

Benchmark indices could not sustain opening gains and ended lower by about a fourth of a percent. Sensex settled at 26118, down 52 points while Nifty lost 24 points to finish at 7931. BSE mid-cap and small-cap indices however managed to gain 0.2% and 0.01% respectively. BSE Bankex lost 1%, becoming top losers among the sectoral indices, followed by 0.9% cut in IT and Finance indices.

FIIs net bought stocks worth Rs 61 cr but net sold index futures and stock futures worth Rs 506 cr and 217 cr respectively. DIIs were net sellers to the tune of Rs 78 cr.

Rupee depreciated 10 paise to end at 66.59/$.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 40 points lower opening for our market.

At the risk of repeating, ever since Nifty crossed immediate hurdle of 7860, we have been mentioning that the "pullback rally" can extend upto 34-DMA.

The benchmark yesterday touched a high of 7980, coming in very close to 34-DMA placed at 8010, but slipped sharply to end at 7931.

After today's gap down opening, benchmark would be close to immediate support of 7890 we had mentioned in yesterday's report, a sustained trading below which generate a sell on the hourly chart. Next downside target to eye in that case would be about 7760, where the trendline adjoining recent bottoms on the hourly chart is placed.

On the way up, 34-DMA, which has now moved closer to 8000, would be the important hurdle to eye.

Traders can initiate short positions if Nifty starts trading below the low made in the first hour.

European Central Bank's (ECB) monetary policy committee is scheduled to meet today. It is widely expected that the central bank will announce further stimulus at the meeting in order to boost inflation and growth – however speculation is rife over what form those might take.

NIFTY GRADUALLY MOVING TOWARDS 34-DMA; TRAIL STOP LOSS TO 7890

NIFTY GRADUALLY MOVING TOWARDS 34-DMA; TRAIL STOP LOSS TO 7890

WORLD MARKETS                             

US indices soared a percent on the first day of Christmas month, despite data showing a decline in manufacturing activity in the economy.

The ISM Manufacturing PMI for November came in at 48.6, in contraction territory and below the expected 50.5 read. The print was the worst since June 2009 and the first time the index fell below 50 in three years. Construction spending rose 1% for October, topping estimates of 0.6%. The U.S. Markit PMI for November was 52.8, above the flash read of 52.6 but below the final October print of 54.1.

Dollar index held below 100. Nymex oil rose 20 cents to $41.85 a barrel. Iron ore touched a new decade low of $42.27 a tonne.

European markets, except a 0.6% higher FTSE, lost upto a percent with DAX leading the tally. Eurozone jobless rate fell to 10.7% in October from 10.8% in September. The final read on euro zone manufacturing PMI for November was 52.8, up slightly from October's 52.3 print.

Earlier, China's official manufacturing purchasing managers index showed a slight decline in November to 49.6, marking a three-year low. The official services sector PMI rose to 53.6, indicating China is on track with a transition to a consumption-oriented economy.

AT HOME

It was yet another rangebound but choppy session after which benchmark indices ended modestly higher. Sensex rose 24 points to settle at 26169 while Nifty finished at 7955, up 20 points. BSE mid-cap and small-cap indices however gained 0.8% and 0.5% respectively. BSE Metal and Basic Materials indices soared 3.2% and 1.5% respectively, becoming top gainers among the sectoral indices while Telecom and Auto indices were the top losers, down 1.1% and 0.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 107 cr, 323 cr and 204 cr respectively. DIIs were net buyers to the tune of Rs 195 cr.

Rupee appreciated 18 paise to end at 66.49/$.

The Reserve Bank of India kept its key lending rate unchanged on Tuesday, leaving the door open for more easing but making that dependent on meeting a challenging inflation target f‎or 2017. This had been widely expected, after consumer inflation picked up to a four-month high of 5% in October and as emerging markets brace for a hike in U.S. interest rates.

India's Nikkei manufacturing PMI fell to a 25-month low of 50.3 in November from 50.7 in October.

Maruti reported lower-than-expected 9.7% y-o-y growth in November sales at 1.208 lac units. Eicher Motor reported 48% growth in Royal Enfield sales at 40769 units, which again was below estimates. Ashok Leyland too missed estimate, reporting 16% growth at 8971 units. M & M sales rose 21% to 41590 units. Tata Motors reported 7% dip at 38918 units. Hero Motocorp sold 5.51 lac units, a marginal rise of 0.6%.  TVS reported 2.4% growth at 2.25 lac units..

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points higher opening for our market.

We have been working with the target of 34-DMA ever since Nifty crossed immediate hurdle of 7860 on 20th November. The benchmark is gradually moving towards that. Yesterday it touched a high of 7972 before closing at 7955.

34-DMA has now moved lower to 8015 and continues to be upside target/hurdle to eye.

Immediate support on the hourly chart has moved up to 7890, which should serve as the stop loss in trading longs.

STAY LONG WITH THE STOP LOSS OF 7870

STAY LONG WITH THE STOP LOSS OF 7870

WORLD MARKETS                             

US indices, weighed down by retail stocks, fell around 0.4% yesterday.

The November Chicago PMI came in at 48.7, in contraction territory and down from October's 56.2 print. The pending home sales for October rose by just 0.2%, ending two straight months of declines but far below expectations for a 1% rebound.

Nymex oil gave up intraday gains of more than 1.5% to settle down 6 cents or 0.1% at $41.65 a barrel. Gold rose $10 to $1066 an ounce.

European markets, except a 0.3% lower FTSE, gained 0.6%-0.8%.

International Monetary Fund yesterday confirmed it will include China's yuan, or renminbi, in an exclusive group of currencies that make up the basket of the IMF's Special Drawing Rights (SDR). The change, which was widely expected, is set to take effect next October

AT HOME

Benchmark indices ended little changes after a rangebound but choppy trade. Sensex settled at 26146, up 17 points while Nifty lost 7 points to end at 7935. BSE mid-cap and small-cap indices gained 0.1% and 0.8% respectively. BSE IT and Consumer Durable indices gained the most among the sectoral indices, rising 1% each while Telecom and FMCG indices lost 1.7% and 0.6% respectively, becoming top losers.

FIIs net sold stocks and stock futures worth Rs 1044 cr and 262 cr respectively but net bought index futures worth Rs 757 cr. DIIs were net buyers to the tune of Rs 602 cr.

Rupee appreciated 9 paise to end at 66.67/$.

India's second quarter GDP grew 7.4%, compared to 7% in the first quarter. Agriculture grew at 2.2%, compared to 1.9%. Manufacturing growth stood at 9.3%, compared to 7.9%. The gross value added (GVA), comprising agriculture, industry and services, increased to 7.4% against 7.1%.

April-October fiscal deficit stood at Rs. 4.11 lac crore, which is 74% of the full-year target.

Core sector growth in October was flat at 3.2%.

OUTLOOK

China's November Caixin final manufacturing PMI has come in at 48.6, an improvement over October's 48.3 reading.

Except a modestly lower Shanghai, other Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 20 points higher opening for our market.

Ever since Nifty crossed immediate hurdle of 7860, we have been advising holding on to trading longs with a trailing stop loss for the target of 34-DMA, which is now placed around 8020.

Yesterday, the benchmark, after touching a high of 7966, slipped to end at 7935 but is set to open higher today.

Immediate support on the hourly chart has moved up to 7870, with the stop loss of which trading longs should be held on to.

RBI, in its monetary policy review today, is expected to leave key rates unchanged. The tone of the policy is likely to be accommodative.

Auto companies will report November sales figures today.