12400 IS NEXT TARGET; 12175 IMMEDIATE SUPPORT

12400 IS NEXT TARGET; 12175 IMMEDIATE SUPPORT

WORLD MARKETS

US indices soared 0.8%-1.3% on the first trading day of the new year to hit fresh record highs.

U.S. President Donald Trump said in a tweet on Tuesday that a phase one trade deal with China will be signed on January 15.

Weekly jobless claims came in at 222,000, slightly below an estimate of 225,000.

Brent crude futures rose 0.4% to $66.27 per barrel, while U.S. WTI crude settled up 0.2% at $61.18 per barrel.

European markets gained 0.8%-1.5%. Euro zone manufacturing PMI data showed that factory activity contracted for the 11th straight month, coming in at 46.3 in December. U.K. manufacturing PMI was revised up to 47.5 for December but remained below November’s 48.9 reading.

AT HOME

Benchmark indices climbed eight tenth of a percent, with Nifty hitting fresh record high on closing basis. Sensex added 320 points to settle at 41626 while Nifty finished at 12282, up 100 points. BSE mid-cap and small-cap indices soared 1.2% and 1.4% respectively. Except 0.2% lower IT and Teck indices, all the BSE sectoral indices ended in green with Basic Materials and Metals indices leading the tally, up 2.9% and 2.6% respectively.

FIIs net bought stock and stock futures worth Rs 689 cr and 703 cr respectively while net sold index futures worth Rs 235 cr. DIIs were net buyers to the tune of Rs 64 cr.

India's December manufacturing PMI came in at 10-month high of 52.7 in December, up from 51.2 in November.

Tata Motors surged after December sales came in better-than-estimates; Tata Steel climbed after steel companies hiked product prices by over Rs 1000/tonne.

Hero Motocorp December sales fell 6.4% y-o-y to 4.24 lakh units. TVS Motors posted 14.7% fall at 2.31 lakh units. Eicher Motor's Royal Enfield sales fell 13% to 50416 units. Ashok Leyland total sales were down 28% at 11168 units. Bajaj Auto registered 3% dip.

OUTLOOK

Today morning, Nikkei is shut while Hang Seng is up more than a percent and Shanghai is marginally in the green. SGX Nifty is suggesting about 35 points higher start for our market.

For past couple of days we had been saying that 12118-12294 is the immediate range, a crossover of which, on either side, is required for a fresh move.

Nifty yesterday touched a high of 12290 before closing at 12282 and is set to open above 12300 today.

12400, where an upward sloping trendline adjoining tops made in August 2018 and June 2019 is placed, is the next major target/resistance to eye.

Immediate support on the hourly chart is placed around 12175, with the stop-loss of which, trading longs should be held on to.