22250-22200 IS THE NEXT TARGET AREA; 21700-21650 IS THE SUPPORT ZONE

 

22250-22200 IS THE NEXT TARGET AREA; 21700-21650 IS THE SUPPORT ZONE

 

WORLD MARKETS

 

Dow fell 0.3% while S & P 500 and Nasdaq ended marginally in the green on Friday as traders parsed through the first batch of fourth-quarter earnings and digested the wholesale inflation data.

 

December producer price index fell 0.1% for the month and rose 1% y-o-y, as against expectation of a monthly gain of 0.1%. Excluding food and energy, core PPI was flat against the estimate for a 0.2% increase.

 

Bank of America shares fell 1.1% after posting declining fourth-quarter profit, while Wells Fargo

 shed 3.3% despite posting a higher profit for the quarterly period. Shares of JPMorgan Chase

 lost 0.7% after the bank said its earnings slipped by 15% from a year earlier. Citigroup rose 1% after announcing 10% workforce cut and posting a $1.8 billion quarterly loss after incurring several large charges. Dow component UnitedHealth fell 3.4% despite the company announcing higher-than-expected earnings and revenue for the fourth quarter. Delta Air Lines also plunged 9% even after exceeding quarterly earnings expectations.

 

U.S. 10-year treasury yield fell 3 bps to 3.941%. Dollar index inched up 0.1% to 102.44. Gold jumped 1.1% to $2049 per ounce.

 

Oil prices intraday surged more than 4% to hit their highest levels since Dec. 27 after Britain and the United States carried out military strikes against targets in Houthi-controlled areas of Yemen.  U.S. crude oil jumped to $75.25 before coming back to $72.68 a barrel while Brent touched $80.75 but reversed from there to settle at $78.29.

 

European markets gained 0.6%-1%.

 

For the week, Dow, S & P 500 and Nasdaq gained 0.3%, 1.8% and 3.1% respectively. In Europe, FTSE was down 0.8% but DAX and CAC gained 0.6% each. In Asia, Nikkei soared 6.6%, Nifty inched up 0.8% but Hang Seng and Shanghai fell 1.8% and 1.6% respectively. WTI crude fell 1.6%. U.S. 10-year treasury yield fell 10 bps to 3.944. Dollar index was flat at 102.44. Gold inched up 0.2%.

 

AT HOME

 

Benchmark indices surged 1.1% each for their best day since 15th December and hit fresh record highs. Sensex settled at 72568, up 847 points while Nifty added 247 points to finish at 21894. Nifty mid-cap and small-cap indices rose 0.4% each, with the former posting record close while the latter hit intraday as well as closing record high. Nifty IT index soared 5.1%, becoming top gainer among the sectoral indices and posting it's best single day gain after 15th July 2020. PSU Bank followed with 2.8 jump. Media and Healthcare indices were the top losers, down 0.6% and 0.5% respectively.

 

FIIs net sold stocks worth Rs 340 cr but net bought index futures and stock futures worth Rs 64 cr and 551 cr respectively. DIIs were net buyers to the tune of Rs 2912 cr.

 

Rupee appreciated 11 paise to end at 82.92/$.

 

For the week, Sensex and Nifty gained 0.8% each.

 

HCL Tech reported stellar set of results as dollar revenue grew 6% and margin expanded. Wipro's dollar revenue fell 2% revenue but beat estimate along with margin and the management said there are green shoots in discretionary spending.

 

Retail inflation accelerated marginally to 5.69% in December from 5.55% in November. Core CPI however eased to 3.9% from 4.1%. Industrial output growth slowed to 2.4% in November from 11.7% in October.

 

China’s annual exports dropped 4.6% in 2023, marking the first dip in seven years.

 

OUTLOOK

 

Today morning, Nikkei is up 0.6% but Hang Seng and Shanghai are down 0.8% and 0.4% respectively. GIFT Nifty is suggesting around 90 points higher start for our market.

 

In Friday's report we had reiterated that 21760 was the immediate hurdle.

 

Nifty, after crossing this hurdle, surged all the way to 21928 before closing at 21894 and is set to open near 22000 today.

 

22200-22250 is the next target area for Nifty; 21700-21650 is the immediate support zone on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

47900 continues to be immediate hurdle for Banknifty, above which, 48380 and 48636, the tops made on 5th January and 28th December respectively, would be next upside levels to eye; 47250, 47000 are downside levels to eye.