8000 CONTINUES TO BE CRUCIAL SUPPORT; 8385 IMMEDIATE HURDLE

8000 CONTINUES TO BE CRUCIAL SUPPORT; 8385 IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained between 0.3%-1.1% as energy stocks rallied sharply and technology rebounded after a post-election sell-off. Dow extended the winning streak to seventh day and notched a new all-time closing high.

US crude rose 5.8% to $45.81 per barrel amid renewed hopes that OPEC would agree to a production cut. Brent settled at $46.98, up 5.7%.

US retail sales rose 0.8% in October while import prices rose 0.5%, both beating expectations. The November read on the New York manufacturing index also came in above estimates.

Goldman Sachs raised its third-quarter and fourth-quarter US GDP estimates by two tenths each, to 3.2% and 2.6%, respectively.

European markets gained 0.3%-0.6%. Euro zone third-quarter gross domestic product rose 1.6% year-on-year, and 0.3% quarter-on-quarter.

AT HOME

New week began on a weak note as Sensex and Nifty nosedived 1.9% and 2.3% respectively to close at the lowest level since 25th May and 27th June respectively. Sensex lost 514 points to settle at 26305 and Nifty finished at 8108, down 188 points. BSE mid-cap and small-cap indices fell 3.9% and 4.7% respectively. Except a 0.3% higher IT index, all the BSE sectoral indices ended in red with Basic Material index leading the tally, down 5.7%, followed by 5.1% each cut in Realty and Auto indices.

FIIs net sold stocks, index futures and stock futures worth Rs 2354 cr, 1356 cr and 1013 cr respectively. DIIs were net sellers to the tune of Rs 105 cr.

Rupee depreciated 49 paise to end at $67.74.

India’s wholesale inflation rose to 3.39% in October year-on-year, marginally lower than the previous month’s 3.57%. Retail inflation fell to a 14-month low of 4.20% in October, down from 4.39% in September.

India's trade deficit in October widened to USD 10.16 billion compared with USD 8.34 billion in the previous month as gold imports more than doubled to USD 3.5 billion from a year ago. Merchandise exports grew 9.6% year-on-year to USD 23.5 billion, while imports expanded 8.11% to USD 33.67 billion.

Oil marketing companies cut petrol and diesel price by Rs 1.46 and Rs 1.53 per litre respectively.

OUTLOOK

Today morning, except a marginally lower Shanghai, other Asian markets are trading with gains of upto 0.9% with Nikkei on the top. SGX Nifty is suggesting bout 70 points higher start for our market.

In yesterday's report we had mentioned that 8230, the 61.8% retracement level of the recent 8000-8600 pullback, would be the immediate support to eye, a sustained trading below which would open up the possibility of the retest of 8000 bottom.

The benchmark broke 8230 support in the initial trade itself and plunged all the way to 8093 before closing at 8108.

As mentioned in yesterday's report, 8000 which coincides with 34-month moving average, continues to be a crucial support to eye. Immediate resistance on the hourly chart has moved lower to 8385 above which 8600 would be the bigger hurdle to eye.

Winter session of the Parliament starts today and promises to be a stormy one owing to issues related to demonetization, OROP and surgical strike across LOC.