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BL Research Bureau
The Indian benchmark indices have been moving up over two trading days. The Sensex had closed at 57,897, up 0.83 per cent and Nifty 50 at 17,233, up 0.86 per cent on Tuesday. For the week, both indices are up 1.35 per cent each so far. The move this week indicates that the Santa Claus rally has begun well. This positive sentiment is more likely to continue for the rest of the week as the market approaches the new year.
However, for today, the SGX Nifty indicates a slightly lower opening on the domestic bourses. The SGX Nifty is currently trading marginally lower by 0.16 per cent at 17,260.
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All you need to know about Santa Claus Rally
A Santa Claus Rally is where stocks climb higher in December last week and the first two New Year's trading days.The Asian markets are also trading on a weak note. Barring Australia’s ASX 200 (7,495, up 1 per cent), all other major Asian indices are trading in the red. Japan’s Nikkei 225 (28,742) is down 1.12 per cent, China’s Shanghai Composite (3,613) is down 0.45 per cent. Hong Kong’s Hang Seng (23,101) and Korea’s Kospi (2,992) are down 0.76 per cent and 0.94 per cent, respectively.
In the US, the Dow Jones Industrial Average (36,398, up 0.26 per cent) had closed on a positive note yesterday. It has room to move up towards 37,000 in the coming days. However, other US indices such as the Nasdaq (15,781), S&P 500 were down yesterday by 0.56 per cent and 0.1 per cent, respectively.
The weakness in the SGX Nifty and the other Asian indices could weigh on the Sensex and Nifty today. However, on the charts, the near-term outlook is positive. As such, dips are likely to be bought.
Supports and resistances
Nifty has good support in the 17,100-17,000 region. For Sensex, the support is at 57,500-57,000. While these supports hold, Nifty and Sensex can see a rise to 17,400-17,500 and 59,000 respectively in the coming days. Having said that, the broader picture is still weak. As such the upside could be capped in both the Sensex and Nifty. We will be looking for a reversal in the next couple of weeks as the market enters into the new year.
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