ALL EYES ON ELECTION RESULTS
US indices climbed 0.6%-1.2% on Friday as expectations of a Republican tax bill passing increased.
Reports suggested that Republicans had agreed to extend the child tax credit and that Republican Sen. Marco Rubio will support the tax bill after the tweaks. Bob Corker, a Republican senator from Tenessee who originally opposed the bill, said he would vote in favor of the measure.
In Europe, FTSE and DAX gained 0.6% and 0.3% respectively while CAC and Italy fell 0.2% and 0.4% respectively. Euro zone trade balance numbers came in lower than expected with exports dropping 2.4% in October.
For the week, US indices gained 0.9%-1.4%. In Europe, FTSE gained 1.3% but DAX and CAC lost 0.4% and 0.9% respectively. In Asia, Nikkei and Shanghai fell 0.7% and 1.1% respectively while Hang Seng rose 0.7%.
Later on Friday, Republicans unveiled their final tax plan as two holdout GOP senators indicated they would support the tax bill after compromises were made. Among the provisions that made the cut was a reduction in the corporate tax rate from the existing 35 percent to 21 percent, with effect from 2018. Republicans intend to pass the measures by the middle of this week.
After a gap up opening, Sensex and Nifty traded in a narrow range through the session and finally ended higher by 0.6% and 0.8% respectively. Senex added 216 points to settle at 33463 while Nifty finished at 10333, up 81 points. BSE mid-cap and small-cap indices climbed 1% and 1.4% respectively. Except a half a percent lower Telecom index, all the BSE sectoral indices ended in green with Metal and Realty indices leading the tally, up 2.8% and 2% respectively.
FIIs net sold stocks and index futures worth Rs 921 cr and 90 cr respectively but net bought stock futures worth Rs 631 cr. DIIs were net buyers to the tune of Rs 635 cr.
Rupee appreciated 20 paise to end at 3-month high of 64.05/$.
For the week, Sensex and Nifty gained 0.6% and 0.7% respectively, extending the winning streak to second consecutive week.
The Union Cabinet approved a Rs 2,600 crore special package for the leather and footwear sector, which the government believes has the potential to generate 3.24 lakh jobs in three years.
India's trade deficit in November narrowed to USD 13.83 billion from USD 14.02 billion in October. Exports rose 30.6% to USD 26.20 bn while imports rose 19.6% to USD 40.02 bn.
Ferrying goods across states may get quicker as the GST Council on Saturday decided to make rollout of all India electronic-way bill compulsory from February 1, two months ahead of the earlier plan.
Today morning, Nikkei is up nearly a percent while Hang Seng and Shanghai are little changed. SGX Nifty is suggesting about 40 points higher start for our market.
All eyes would be on the Gujarat and Himachal Pradesh assembly election results, counting for which begins at 8 AM today.
Exit polls showed anywhere between 99-135 seats for BJP. Markets would be ok with 110-120 seats. A figure below 100 will be taken negatively while a number close to 135 would be positive.
Technically, in Friday's report we had mentioned that traders can initiate longs once the top made in the first hour is taken out. Nifty, after making a high of 10373 in first hour, treaded below that through rest of the session and finally ended at 10333.
A higher start would take it close to Friday's high. A crossover of 10373 would confirm a "buy" on the hourly chart and would pave the way for further upmove. 10490, the top made in early November, would be the next upside target if that happens. 10260 is the immediate support on the hourly chart with the stop-loss of which long positions can be initiated once 10373 is taken out.