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.
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.
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