VIEW POINT : IIP IN FOCUS
US markets closed higher for the second consecutive day on the back of a narrower October trade deficit and signs of improving trends in the labor market. While the new Jobless claims climbed to 474000 against expectation of 455000, the four week moving average fell 7750 to 473750. More importantly, continuing claims, defined as claims lasting more than one week, plunged by 303000 to 5.16 mn. European markets closed higher led by banks after the lack of a mooted windfall tax in British finance minister Alistair Darling's pre-budget report, and with Standard Chartered's upbeat trading update.
Our market however, will focus on the October IIP data to be released today which is expected to show a growth of around 12.5%. While that will be a matter to cheer, coupled with a whopping 19.8% food inflation and a lot of liquidity sloshing in the system, will be an ideal recipe for the RBI to move towards rate tightening. On chart, Sensex is forming an ascending triangle pattern and a decisive close above 17300 will give the breakout. On the derivatives front Nifty futures turned into a discount of 3 points from a premium of 11 points the previous day with open interest going down by 2%, suggesting unwinding of long positions. Put call ratio fell from 1.40 to 1.38 as calls added substantially higher OI than puts. Dena Bank, ICSA, R Com and Uco Bank saw long build up and can be looked at for taking long positions with appropriate stop loss
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Happy Trading,
United we grow!!!
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