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Indian markets could open mildly lower in line with lower Asian markets today and largely lower US markets on Thursday- HDFC Securities

U.S. stock indexes on Thursday all closed lower, as the Dow fell just into the red in the final minutes of trading, while investors waited for Friday’s November consumer price index report which could see annual inflation rise to 6.7%, its highest level in about 40 years.

While U.S. stocks have recovered to near record levels in the past week as the fear that the omicron variant of coronavirus might slow economic growth has faded, concern has risen over the potential for tighter monetary policy at next week’s Federal Reserve policy meeting. A Reuters poll of economists predicted the Fed would raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year. However, most saw the risk that a hike comes even sooner.

U.S. jobs data showed new applications for unemployment benefits sank to a 52-year low of 184,000 for the week ended Dec. 4. U.S. consumer price index (CPI) for November is due later Friday and a Reuters poll of economists expect it to have risen 6.8% year-on-year, overtaking a 6.2% increase in October, which was the fastest gain in 31 years.

Japan's wholesale inflation hit a record 9.0% in November, pushing gains for a ninth straight month, a sign upward pressure on prices from supply bottlenecks and rising raw material costs were broadening. Chinese markets are in focus after China Evergrande Group and Kaisa Group Holdings Ltd. officially defaulted on their dollar debt.

Net inflows into equity and equity-linked schemes more than doubled month-on-month to Rs 11,614.73 crore in November. Monthly contributions into systematic investment plans rose for the seventh straight month. According to the mutual fund lobby, monthly SIP contributions hit a fresh all-time high of Rs 11,004.94 crore. Around 14 lakh SIP accounts opened during the reported month. Asian shares slipped on Friday as traders edged away from riskier assets amid renewed concerns about COVID-19 and ahead of key U.S. inflation data that could set direction on Federal Reserve rates.

Nifty ended higher for the third consecutive session on Dec 09 helped by positive global cues. At close Nifty was up 0.27% or 47 points at 17517. Nifty saw lower upward momentum on day three as expected. However, the advance decline ratio continues to remain high, comforting the sentiments. Nifty could face resistance from 17564-17600 band while 17351-17379 band could provide support.

Daily Technical View on Nifty

Market: Observation

* Markets ended higher on Thursday for third consecutive day. The Nifty Fut finally gained 0.25% to close at 17558. Broad market indices like the BSE Mid Cap gained 0.38% while Small Cap index gained 0.80%, thereby out performing the Sensex/Nifty. Market breadth was positive.

Nifty: 15 min chart indicates breakout

* Nifty 15 minutes future chart shows that index is moving up continuously after the channel breakout.

* The uptrend could continue towards north in forthcoming session or may take breather.

* Immediate upside targets are around 17605– 17805 levels. The current short term uptrend would reverse if the Nifty moves below the swing lows of 17327.

Nifty: Daily chart indicates uptrend

* On daily chart, Nifty has continued to show positive momentum and extended the uptrend. Index has moved above previous swing high which is a positive sign.

* Index is trading above all key moving averages of short to medium term, which gives strength to bulls for short term.

* Trend remains up and expect further upside levels in coming days. Watch the crucial reversal level of 17327 in coming days.

Nifty – Daily Timeframe chart

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