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Indian markets could open flat in line with rangebound Asian markets today and despite negative US markets on Tuesday.- HDFC Securities

U.S. stock benchmarks ended lower Tuesday, booking back-to-back losses for the first time this month, after data showing another jump in wholesale inflation and ahead of a Federal Reserve policy statement on Wednesday that is expected to see a faster reduction in its bond buying program.

The US producer-price index rose 0.8% in November, above the 0.5% advance forecast by economists polled by The Wall Street Journal. That brought wholesale prices in the past year to 9.6%, from a 12-month pace of 8.8% in the prior month, marking the highest level in about four decades.

India's merchandise exports jumped 27.16 per cent to USD 30.04 billion in November (vs $23.62 bn last year) on the back of good performance by sectors like petroleum products, engineering goods and electronic items. Imports in November were at USD 52.94 billion, showing an increase of 56.58 per cent over inbound shipments of USD 33.81 billion in the year-ago month. November trade deficit stood at USD 22.91 billion. This compares with USD 10.19 billion in November 2020.

China's factory production rose at a faster pace in November as the country's power crunch eased, while consumption and investment decelerated. Value-added industrial output grew 3.8% from a year earlier in November, up from the 3.5% expansion marked in October. Retail sales, a major gauge for consumption, rose 3.9% from a year earlier in November, slowing from October's 4.9% increase and also lower than the 4.5% rise expected. Fixed-asset investment increased 5.2% in the January-November period, down from the 6.1% pace recorded in the first ten months.

Asian markets were precariously poised on Wednesday as the world waited to hear from the U.S. Federal Reserve on when it would stop buying assets and start raising interest rates, possibly piling pressure on its peers to follow. Futures have already priced in an end to tapering by March and a first hike to 0.25% in May or June, with rates approaching 0.75% by year end.

Nifty fell for the third consecutive session on Dec 14, though it did not close at the intra day low. At close Nifty was down 0.25% or 43.3 points at 17325.

Nifty has formed a near doji pattern after a fall, suggesting that the near term weakness in the markets may be coming close to end. 17484 could be the next resistance for the Nifty while 17226 could be a crucial support below which downmove can accelerate.

Daily Technical View on Nifty

Market: Observation

* Nifty remained range bound in yesterday’s trade

* After forming bearish engulfing pattern on 13th December, Nifty opened with gap down and consolidated thereafter

* Yesterday’s close did not show any directional move for the Nifty

* Likely range of Nifty for the day is seen at 17200-17500.

* 50 days EMA resistance is placed at 17507 for Nifty.

* The negative implication of bearish engulfing pattern formed on 13th December has not negated yet.

* So trend would be considered bearish till we see Nifty closing above 17640 mark

* However, on the down side 17150-17200 is a strong support for the Nifty

* From the sectors IT and Media looks the strongest.

* Traders are advised to remain nimble-footed in taking long positions in swing trading.

Nifty – Daily Timeframe chart

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