NIFTY MOVES CLOSER TO 7916 BOTTOM; 8100 IS THE IMMEDIATE HURDLE

NIFTY MOVES CLOSER TO 7916 BOTTOM; 8100 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.1%-0.4% yesterday, digesting a mixed bag of economic data.

The final read on third-quarter U.S. GDP came in at 3.5%, above the expected 3.2% and fastest in two years. Durable goods orders for November fell 4.6%, less than expected. Initial jobless claims jumped to a six-month high of 275,000 last week, as against expectation of 256,000. Personal income remained flat in November while consumer spending increased modestly.

Trump named Peter Navarro, a well-known China critic, to lead the newly created White House National Trade Council, reinforcing his tough stance on China.

US oil rose 0.9% to $52.95 per barrel and Brent rose 1.1% to $55.05

U.S. Treasurys fell, with the benchmark 10-year note yielding 2.55% and the short-term two-year note yield trading at 1.18%. Dollar index was little changed.

In Europe, FTSE gained 0.3%, CAC was flat while DAX and Italy lost 0.1% and 0.5% respectively. the Italian government approved a $20.8 billion bailout for Monte dei Paschi, one of Italy's largest lenders and the oldest bank in the world. News about the rescue fund came a day after the bank said it could run out of cash in around four months.

AT HOME

Benchmark indices plunged a percent yesterday, extending the losing streak to seventh straight day and closing at the lowest level since 24th November. Sensex lost 263 points to settle at 25980 while Nifty finished at 7979, down 82 points. BSE mid-cap and small-cap indices fell 1.5% and 1.2% respectively. All the BSE sectoral indices ended in red with Metal and Basic Materials indices leading the tally, down 2.8% and 2.1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 614 cr, 787 cr and 266 cr respectively. DIIs were net buyers to the tune of Rs 320 cr.

Rupee depreciated 8 paise to end at 67.99/$.

The Goods & Services Tax (GST) Council yesterday approved structure of Central Goods & Services Tax (CGST) and State Goods & Services Tax (SGST) laws. The discussions on IGST and Compensation Law will be taken up today.

OUTLOOK

Japanese markets will be shut for the Emperor's birthday

Other Asian markets are trading with cuts of upto 0.6% and SGX Nifty is suggesting about 15 points lower start for our market.

Readers would recall that after Nifty broke the 20-DMA support of 8057, we were working with downside target of 8057 and had also said that a breach of 8057 would open up the possibility of retest of 7916 bottom.

Nifty yesterday plunged all the way to 7965 before closing at 7979, moving towards 7916 target.

7916 continues to be major support to eye. As we had mentioned in our previous interactions, 7900 is the 50% retracement level of the entire 6825-8970 upmove and if this level is breached decisively, next meaningful support will come around 7650, which is the 61.8% retracement level of the aforementioned upmove.

Immediate resistance on the hourly chart has moved lower to 8100, with the stop-loss of which trading shorts can be held on to.