DRAGHI OFFSETS JAPANESE WORRIES; STAY LONG WITH THE STOP LOSS OF 8320

DRAGHI OFFSETS JAPANESE WORRIES; STAY LONG WITH THE STOP LOSS OF 8320

WORLD MARKETS

US indices ended mixed yesterday with the Dow and S & P 500 rising 0.1% each while Nasdaq lost 0.4%.

Comments by European Central Bank President Mario Draghi helped offset data that unexpectedly showed Japan's economy in a recession.

Earlier Nikkei fell nearly 3% after data showed that Japan's economy unexpectedly contracted 1.6% in the last quarter instead of the expected 2.1% gain. Later, ECB President Draghi, in his comments to the European Union's Parliament, said the central bank's governing council remained "unanimous in its commitment to using additional unconventional instruments if needed."

US industrial production fell 0.1% in October, compared to expectations for a 0.2% gain. Separate data had manufacturing activity in New York State rising in November, bouncing back from the prior month's read.

European markets gained between 0.3%-1.6% with Spain and Italy leading the tally.

Dollar index, after touching a low of 87.18, reversed to end at 87.99. Nymex crude fell 16 cents to $75.7 a barrel. Gold eased 0.2% to $1183.50 an ounce.

                                                             

AT HOME

After falling nearly half a percent in the morning trade, benchmark indices climbed nearly a percent from the bottom of the day to end higher by half a percent, marking a fresh record high. Sensex gained 131 points to settle at 28178 while Nifty finished at 8431, up 41 points. BSE mid-cap and small-cap indices gained 0.9% and 1.1% respectively. Except a 0.6% and 0.2% cut in BSE Metal and Healthcare indices respectively, all other sectoral indices ended in green with Power and Auto indices leading the tally, putting on 1.5% and 1.4% respectively.

India's trade deficit in October narrowed to USD 13.36 bn from 14.25 bn in previous month as imports fell to 39.45 bn from 43.15 bn and exports fell to 26.09 bn from 28.90 bn.

FIIs net bought stocks worth Rs 656 cr but net sold index futures and stock futures worth Rs 235 cr and 473 cr respectively. DIIs were net sellers to the tune of Rs 248 cr.

Rupee depreciated 1 paise to close at 61.73/$.

OUTLOOK

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

Just to recall, we have been bullish on Nifty ever since lower-top lower-bottom formation was negated on 21st October when 7928 top was crossed. Later, when 8130 hurdle was taken out, we upgraded the target to 8520 and have been asking holding on to trading longs with a trailing stop loss.

8520 continues to be the next target and "hold long positions with a trailing stop loss" continues to be the advise. 8320 is the immediate support on the hourly chart which should serve as that stop loss.