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Indian markets could open higher in line with positive Asian markets today and higher US markets on Tuesday - HDFC Securities

U.S. stock benchmarks closed higher Tuesday, with a surge extending Monday’s sharp gains, as Wall Street focused on early reports that the omicron variant of coronavirus that causes COVID-19 is less severe than originally feared. A lot of the fear over the omicron variant of the coronavirus is waning and investors see in recent data that “there is still a lot of economic momentum” in the U.S. British drugmaker GSK said an antibody-based COVID-19 therapy it is developing with Vir Biotechnology was effective against all mutations of the Omicron variant.

The U.S. trade deficit sank almost 18% in October after the biggest surge in exports in 13 years and a slowdown in imports partly tied to congestion at domestic ports. The trade gap shrank to $67.1 billion from a record $81.4 billion in the prior month. The RBI policy statement is due today, with the central bank widely expected to stand pat on key rates as the Omicron variant poses risks to India's recovery.

China's exports growth lost steam in November, pressured by a strong yuan, weakening demand and higher costs, but imports unexpectedly accelerated as the country scrambled to restock depleted commodities like coal. Exports rose 22% year-on-year in November, customs data showed on Tuesday, slower than the 27.1% jump in the previous month but faster than the 19.0% expected in a Reuters poll. Imports climbed 31.7%, beating the 19.8% rise in October and well above the forecast 20.6% gain.

Japan's economy shrank 3.6% in the third quarter, worse than the initial estimate of a 3.0% contraction, revised government data showed on Wednesday, posting a decline as private spending took a hit from a resurgence in COVID-19.

Asian shares extended gains on Wednesday, continuing a global relief rally as markets found positive news in early reports about the potential impact of the Omicron variant. Nifty reversed the losses of the previous day on Dec 07 and posted the biggest single day gain since September 23, 2021. At close Nifty was up 1.56% or 264 points to 17176.7.

Nifty clawed back most of the losses of the previous day on Dec 07.16983 could now be the support for the Nifty while 17401 could be the resistance. The way the advance decline ratio has improved suggests a few more days of upward moves in the Nifty, though the pace could slow.

Daily Technical View on Nifty

Market: Observation

* Markets ended higher on Tuesday after the recent sharp decline. The Nifty finally gained 1.57% to close at 17223. Broad market indices like the BSE Mid Cap gained 1.29% while Small Cap index gained 1.14%, thereby under performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: 15 min chart indicates breakout

* Nifty 15 minutes future chart shows that index has moved up sharply after the falling channel breakout which is a positive sign.

* The reversal could continue towards north in forthcoming session.

* Immediate upside targets are given at around 17350 – 17445 levels. The current short term uptrend would reverse if the Nifty goes below the previous intermediate swing low of 17180.

Nifty: Daily chart indicates uptrend

* On daily chart, Nifty has showed positive momentum and reversed the prevailing downtrend. Index has moved above previous day’s high.

* Index is still holding the key supports of 17180 - 16780 levels which indicates bulls are in momentum.

* Now trend has changed as up and expect further upside levels in coming days , watch the crucial reversal level of 17180 in coming days.

Nifty – Daily Timeframe chart

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