7690-7860 CONTINUES TO BE IMMEDIATE RANGE

7690-7860 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

US indices soared 1.4%-1.8% yesterday, reacting positively to the release of the Federal Reserve's October meeting minutes that signaled a likely interest rate hike in December.

Minutes showed most members felt that economic conditions for a rate hike will be met by the next time the committee meets in December. This was despite continued volatility being seen across global markets as a result of geopolitical issues, dampened commodity prices and an economic slowdown in China

U.S. housing starts for October fell 11%, while building permits rose 4.1%. Single-family building permits rose 2.4% to their highest level since December 2007.

Apple climbed 3.2% after Goldman released a note saying the company's shares will rise 43% in the next 12 months.

Nymex oil rose 8 cents or 0.2% to $40.75 a barrel after dipping below $40 a barrel for the first time since August.

European markets, except a 0.2% higher FTSE, lost upto a percent as further security scares after the Paris attacks last Friday weighed on sentiment.

Yesterday, seven people were arrested and at least two suspects died following police raids in the Paris suburb of Saint-Denis. Also, Air France said that two Paris-bound flights that had been diverted following anonymous threats had landed safely.

AT HOME

Benchmark indices nosedived nearly a percent and half yesterday close at the lowest level since 8th September. Sensex settled at 25482, down 382 points while Nifty lost 106 points to finish at 7732. BSE mid-cap and small-cap indices lost 0.7% each. Except a 0.3% rise in BSE Consumer Durable index, all the sectoral indices ended in red with IT index and Bankex leading the tally, down 2.3% and 2% respectively.

FIIs net sold stocks worth Rs 768 cr but net bought index futures and stock futures worth Rs 139 cr and 254 cr respectively. DIIs were net sellers to the tune of Rs 759 cr.

Rupee depreciated 27 paise to end at 66.29/$.

Government yesterday cleared a 10% disinvestment in the Coal India Ltd, besides approving an initial public offer (IPO) for Cochin Shipyard.

The government also restored a 3% interest subvention in a bid to arrest falling exports. Financial incentive for sugarcane farmers in the form of subsidy of Rs 4.50 per quintal on sugar for farmers was also approved.

The government will also address the problems of at least 34 road projects that are currently stalled. All projects that were not stuck due to developers’ problems would be re-started again. Besides, to meet the rising compensation of land for road projects, the government will divide the road cost into civil construction and capital.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 60 points higher opening for our market.

In yesterday's report we had mentioned that 7860 continues to be immediate hurdle, a sustained trading above which is required for the further upmove. We had also said that on the way down, 7690, the bottom made in late September, is the immediate support, upon breach of which 7540, the bottom made in early September, would be the next downside target.

The benchmark plunged 106 points yesterday to end at 7732 but is set for a gap up opening today.

7690-7860 continues to be immediate range, a crossover of which, on either side will give further direction.