NIFTY OUTLOOK : CMP 25986
Dear Friends,
As discussed yesterday, market behaviour remained on expected lines. Nifty continued its bearish sentiment and slipped to our support of 25887 (made a day low of 25891) and on closing it settled near our level of 25983 i.e. closed at 25986.
A bearish wave candle appeared on the daily chart, indicating volatility and indecision, suggesting Nifty is taking a breather before the next directional move. Sentiments remain bearish in the very near term. Hence, if bears take the lead, then on a decisive breakdown of 25938, we may see downside towards 25890–25843. If more supply accentuates, it may test 25794.
If bulls take the lead, then on a decisive breakout of 26035, we may see an upmove towards 26083–26130. If more demand kicks in, it may test 26177.
Macros.
1.Dollar index @98.807
2.Vix @ 16.05
3.Brent crude @ 62.85
4.U.S. 10 years bond yield @ 4.061
Note
Weak US job data has pushed rate-cut expectations higher. Odds for a rate cut stand at 89%, highlighting concerns of a slowing labour market in the world’s largest economy and reinforcing the expectation of a Federal Reserve rate cut later this month.
Markets are now pricing almost a 90% probability that the US central bank will cut rates by 25 bps in the Dec 9–10 meeting, as policymakers may support the cooling labour market despite sticky inflation.
In India, divergence is seen in the services sector, which continues to grow on the back of domestic momentum. HSBC services data indicates the upturn was supported by a sharp rise in new business intake, growing faster than the long-run average.
On the manufacturing export side, a sharp decline is visible in new export orders. International demand remained subdued, with new export orders expanding at the slowest pace since March. Firms noted that global competition and cheaper overseas services impacted growth.
This highlights a clear divergence: domestic consumption is driving services, while manufacturing and exports are moderating.
Conclusion
Investors are getting uneasy due to delays in the trade deal. A broad range-bound trade is likely in Indian markets between 26720–26320.
Lower dollar index will support bullions and metals, even without market support.
Commodity-related stocks — bullions and base metals — will outperform.
By Ashok Bhandari (RA)
SEBI Regd. No. INH00019549
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