Market Outlook - Arpit Jain, AVP at Arihant Capital Markets

This week NIFTY50 Benchmark fell for a fourth consecutive session losses 240 points and closed below 10,150 levels, Selling was seen across all sectors and on the valuation front NIFTY50 is trading at trailing price-to-earnings multiple of 25.90 x.

Widening fiscal deficit and rising crude oil prices concerns continued to hurt sentiment. Investors turned cautious ahead of major events in the month ahead - RBI policy, FOMC meet and Gujarat assembly elections.

On the macro front, Automobile Sales data for November, by SIAM will be announced on December 4-8. Nikkei Services PMI for November will be announced on December 5. The Reserve Bank of India (RBI) is scheduled to announce fifth bi-monthly policy on December 6. The Gujarat assembly elections will be held in two phases on December 9 and 14.

On the global front, UK Construction PMI and Europe PPI data will be announced on Monday, December 4. Chinese Caixin Services PMI, European Final Services PMI, UK Services PMI, European Revised GDP, US Trade Balance, US Final Services PMI and US ISM Non-Manufacturing PMI data will be announced on Tuesday, December 5. US ADP Non-Farm Employment and US Crude Oil Inventories data will be announced on Wednesday, December 6. US Unemployment Claims data will be announced on Thursday, December 7. Japanese GDP, Japanese Current Account, Chinese Trade Balance, UK Manufacturing Production and US Non-Farm Employment data will be announced on Friday, December 8.

The initial public offering (IPO) of multi-speciality hospital chain, Shalby Limited will open its IPO on December 5 and close on December 7, price band at Rs 245-248 per share. The logistics arm of Kishore Biyani led Future Group; Future Supply Chain Solutions Limited will open its IPO on December 6 and close on December 8, price band at Rs 660-664 per share.

Future Outlook: The current price action on the weekly as well as on the daily chart suggests that the demand zone of 10171 to 10094 holds significance going forward.

At present Nifty has resistance at 10271 - 10359 - 10461 levels whereas on the downside it has support at 9972 - 9884 - 9783 levels.

In coming week if nifty trades and close above 10183 level then it is likely to test 10271 - 10359 - 10461 levels. However, if nifty trades and close below 10060 level then it can test 9972 - 9884 - 9783 levels.

Broadly, 10171 to 10094 remains a make or break level any close below the mentioned demand zone would intensify the selling pressure. On the flip side, if nifty holds the mentioned demand zone then a bounce up to 10271 - 10359 cannot be ruled out.

Source : Equity Bulls

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