Nifty 7979/Sensex 25979/ Bank Nifty 17891
8 Advances /43 Declines/ 0 Unchanged
Benchmarks extend losing streak for seventh straight session; Nifty slips below 8,000 mark
Extending their recent downtrend, Indian equity benchmark indices witnessed further drubbing on Thursday as the country’s cash crunch issue continued to weigh on corporate earnings expectations for the December quarter. The frontline gauges failed to showcase any kind of resilience through the session and kept drifting to lower levels, breaking one technical level after another to eventually settle below the psychological 8,000 (Nifty) and 26,000 (Sensex) levels.
Sentiments remained bearish on sustained foreign fund outflows and a weak trend at Asian and European markets. Foreign portfolio investors (FPIs) have already pulled out of equities worth nearly $4 billion (over Rs 25,000 crore) so far in the December quarter, the worst since September 2015, amid uncertainty over US presidential election and prospects of hawkish US Federal Reserve’s policies. Also, investments in domestic capital markets through participatory notes (P-Notes) plunged to its lowest level in nearly three years in November 2016. According to the data available with Sebi, the total value of P-Notes investment in Indian markets -- equity, debt and derivatives -- fell to Rs 1.79 lakh crore in November-end, from Rs 1,99,987 crore at the end of October 2016.
Adding the pessimism among investors, Chief Executive Officer of NITI Aayog Amitabh Kant said that just one per cent of India's more than 1.25 billion population pays Income Tax and the country cannot afford as high as 95 percent of its economy making cash transactions. Furthermore, traders remained cautious with Prime Minister Narendra Modi’s top economic adviser Bibek Debroy’s statement that the negative shock from demonetisation will last until the end of March, though he also said that improved growth next year should fully compensate for the loss. Also, the minutes of last rate-setting meeting of the Reserve Bank of India’s monetary policy committee (MPC) showed that it shifted its focus towards inflation, while playing down concern about economic growth. Moreover, the broader markets too ended on a daunting note with over one percent losses, underperforming their larger peers by quite a margin.
On the global front, Asian markets ended lower on Thursday as market volumes began to thin out in the run-up to the Christmas holidays, while trading was range-bound with many investors sitting on the sidelines. Japanese market edged down from one-year highs as market participants took profit from recent gainers such as financials in otherwise thinning trade ahead of the holiday season.
Singapore shares hit their lowest in more than three weeks, pulled down by financial and industrial stocks.. Meanwhile, European markets edged lower, led by miners, and U.S. stock futures stagnated after the Dow Jones Industrial Average failed to make progress toward 20,000 Wednesday.
Back home, the local benchmark got off to a somber opening, extending the downtrend for the seventh straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The selling pressure accentuated in the afternoon trades as investors took to across the board risk aversion. Though the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session
FII Activity (Dec 22, 2016)
The FIIs as per Thursday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 3622.73 crore against gross selling of Rs 4730.88 crore. Thus, FIIs stood as net sellers of Rs 1108.15 crore in equities.
In the debt segment, the gross purchase was of Rs 1222.13 crore with gross sales of Rs 176.45 crore. Thus, FIIs stood as net buyers of Rs 1045.68 crore in debt.
Now what to expect next??
Nifty Future Levels
Support at 7930 and resistance 8030---8070
Break and sustain below 7970 will take it to 7930 and then to 7850—7780 mark else could test its resistance level of 8030---8070 again.
Further upside rally will see only above 8070 mark
Bank Nifty Future Levels
Support at 17850 and resistance at 18050--18300.
Weekly close below 17850 … will take it to 17500—17200 and then to 16900 else could test its resistance level of 18050--18300.
Further upside rally will see only above 18300.
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