7710 NEXT DOWNSIDE TARGET, 7900 IMMEDIATE HURDLE

7710 NEXT DOWNSIDE TARGET, 7900 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow and S & P 500 gained 0.1% and 0.2% respectively while Nasdaq, weighed down by a 2.5% cut in Apple, ended 0.25% down.

The People's Bank of China (PBOC) injected nearly $20 billion into money markets, its largest cash injection since September. China Securities Regulatory Commission (CSRC) announced plans for new rules to further restrict share sales by major stakeholders in listed companies, and said it would further tweak the circuit breaker mechanism amid criticism that it had fueled Monday's sell-off.

Nymex oil fell 79 cents or 2.2% to $36 a barrel and Brent eased 80 cents to $36.42 a barrel.

European markets gained 0.3%-1.2%. The intervention by the People's Bank of China (PBoC) helped push metal prices slightly higher, pushing the basic resource sector up sharply, after it took a battering on Monday. Eurozone inflation for December came in at 0.2%, in-line with November's reading but lower than the forecast of 0.3% uptick.

After Monday's 7% fall in Shanghai Composite, the index, yesterday, swung in a 4% range before closing down about 0.3%.

AT HOME

Benchmark indices ended modestly lower after a choppy trade, extending the losing streak to second day. Sensex settled at 25580, down 43 points while Nifty lost 7 points to finish at 7785. BSE mid-cap and small-cap indices however gained 0.6% and 0.8% respectively.  BSE Metal and Basic Material indices climbed 2.2% and 1.6% respectively, becoming top gainers among the sectoral indices while Telecom and IT indices lost 0.6% and 0.4% respectively.

FIIs net sold stocks and stock futures worth Rs 352 cr and 179 cr respectively but net bought index futures worth Rs 34 cr. DIIs were net buyers to the tune of Rs 13 cr.

Rupee appreciated 2 paise to end at 66.59/$.

OUTLOOK

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

We had advised going short on Nifty below 7890 on Monday and had given targets of 7760 and 7710 yesterday, which are the 50% and 61.8% retracement levels of the 7550-7973 upmove.

Yesterday, the benchmark touched a low of 7763 before closing at 7785.

7710 would continue to be next downside target once Nifty starts trading below 7760.

7900 continues to be immediate hurdle.

India's December Services PMI data would be released today.