Monday, February 6, 2017



WORLD MARKETS                             

US indices climbed 0.5%-0.9% on Friday, with the Dow posting its best trading day of the year, following a stronger-than-expected employment report. Financials lead the gains.

The U.S. economy added 227,000 jobs in January, while the unemployment rate ticked higher to 4.8%. Average hourly earnings, however, rose just 3 cents and 2.5% on an annualized basis. December factory orders rose 1.3%, and the January read on the ISM nonmanufacturing index came in at 56.5, slightly below December's 56.6.

Trump signed executive orders aimed at watering down financial regulations in the U.S.

U.S. Treasuries whipsawed following data release, with the benchmark 10-year note yield rising to 2.47%, while the short-term two-year note yield held near 1.1205%. Dollar index, after touching an intrady high of 100.26, slipped to end at 99.73, the previous close being 99.82.

US oil rose 29 cents to $53.83 per barrel as the U.S. unleashed a new round of sanctions against Iran after its ballistic missile test. Gold rose $1.40 to settle at $1221 per ounce.

European markets added 0.2%-1.2%.

For the week, Nasdaq and S & P 500 managed to end 0.1% higher but Dow lost 0.1%. In Europe, FTSE edged up 0.1% but CAC and DAX fell 0.3% and 1.4%. In Asia, Nikkei plunged 2.8% while Hang Seng and Shanghai gave away 1% and 0.6% respectively.

At the weekend, U.S. President Donald Trump's immigration ban on travelers from seven Muslim-majority countries and indefinite block on refugees faced legal setbacks as a federal judge blocked the move with a temporary restraining order on Friday. A U.S. appeals court denied an emergency appeal from the U.S. Department of Justice to restore the immigration order on Saturday. Trump continued his barrage of Tweet attacks on the federal judge, U.S. District Judge James Robart and the court system.


Benchmark indices ended marginally in the green after a rangebound but choppy session. Sensex settled at 28241, up 14 points while Nifty added 7 points to finish at 8741. BSE mid-cap and small-cap indices however outperformed, gaining 0.6% and 1.1% respectively. BSE Healthcare index climbed 1.6%, becoming top gainer among the sectoral indices, followed by 0.9% each rise in Realty and Telecom indices. Auto and Consumer Durable indices were the top losers, down 0.8% each.

FIIs net bought stocks worth Rs 354 cr but net sold index futures and stock futures worth Rs 275 cr and 59 cr respectively.  DIIs were net sellers to the tune of Rs 43 cr.

Rupee appreciated 6 paise to end at 67.31/$.

For the week, Sensex and Nifty gained 1.3% and 1.2% respectively, extending the winning streak to second consecutive week.

Dr Reddy's quarterly profit dipped 16% y-o-y to Rs 492 cr but was up 59% q-o-q. Revenue fell 6.4% y-o-y but was up 3% q-o-q at Rs 3723 cr. Operating profit fell 12% to Rs 864 cr and margin contracted by 150 bps to 23.2% y-o-y but were up 38% and 590 bps q-o-q, respectively.

ACC reported 45% decline in consolidated net profit at Rs 56 cr. Revenue fell 6.1% to Rs 2734 cr. Operating profit fell 9% to Rs 256 cr and operating margin fell to 9.4% from 9.6%.


China's January Caixin services PMI has come in at 53.1, down from 53.4 in December. Composite PMI has dipped to 52.2 from 53.5.

Today morning, Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting about 35 points higher start for our market.

Readers would recall that after Nifty crossed the 61.8% retracement level of the entire 8970-7894 fall placed at 8560, we have been working with major target of 8970 itself and have said that before 8970, 8740, 8800 and 8900 would be the intermediate targets to eye.

The benchmark achieved 8740 target last week and a higher start today would take it closer to 8800 mark.

Immediate support on the hourly chart, after today's higher start, would have moved to 8660, with the stop-loss of which trading longs should be held on to.

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