NIFTY CROSSES FIRST HURDLE; HEADED FOR 8294, 8373

NIFTY CROSSES FIRST HURDLE; HEADED FOR 8294, 8373

WORLD MARKETS                             

US indices gained between 0.2%-0.5% on Friday, extending the winning streak to third day and S & P 500 tallying its second best week in nearly two years as energy stocks continued to rebound.

Nymex oil climbed $2.41 or 4.4% to $56.52 a barrel. Brent crude too gained over 4% to $61.

European markets, except a 1.2 rise in FTSE, ended with modest cuts. Italian banks saw heavy declines after the rating agency S & P downgraded Italian Banks. Also weighing on the sentiment was a report that the European Central Bank may require certain peripheral countries such as Greece or Portugal to set aside extra money or provisions to cover potential losses from any quantitative easing it undertakes on next year. German research group GfK said its consumer climate indicator, based on a survey of around 2,000 Germans, forecast a rise to 9.0 in January, from 8.7 in December.

The euro hit a 28-month low against the dollar $1.2240 on diverging central bank policies.

For the week, S & P 500 climbed 3.4%, Nasdaq gained 2.4% and Dow rose 3%. European markets gained between 2%-4%.

AT HOME

After a gap up opening, benchmark indices traded in a range through the session and finally ended higher by about eight tenth of a percent, extending the winning streak to second day. Sensex gained 245 points to settle at 27372 while Nifty finished at 8225, up 66 points. BSE mid-cap and small-cap indices gained 0.4% and 0.6% respectively. BSE It and Metal indices gained the most among the sectoral indices, rising 2% and 1.8% respectively. FMCG and Realty indices lost 0.9% and 0.8% respectively.

FIIs net sold stocks and index futures worth Rs 669 cr and 80 cr respectively but net bought stock futures worth Rs 355 cr. DIIs were net buyers to the tune of Rs 623 cr.

Rupee depreciated 19 paise to end at 63.295/$.

For the week, Sensex and Nifty were almost flat, with the former gaining 20 points and the later just 1 point.

In a major development, government on Friday tabled the long awaited goods-and-services tax or GST in the Parliament. GST will eliminate a slew of levies currently in place to create a single internal market and is considered to be the biggest tax reform since independence. The bill will be taken up for discussion in the budget session.

Finance Ministry’s Mid-Year economic review, tabled in Parliament on Friday, pegged India's GDP growth in current fiscal at 5.5%.  Referring to fiscal challenges, the review said “the tax base was weaker than expected thanks to unanticipated moderation in inflation” and the revenue projections were “over-optimistic”.

OUTLOOK

Today morning Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 25 points higher opening for our market.

Nifty on Friday surged all the way to 8263 before closing at 8225, gaining 66 points compared to previous close. More importantly the benchmark on Friday crossed the 38.2% retracement level of the recent 8627-7961 fall placed at 8216 and also generated a buy signal on the hourly chart. This paves the way for the further upside to 50% and 61.8% retracement levels of 8627-7961 fall, placed at 8294 and 8373 respectively.

On the way down, 8148, the 38.2% retracement level of the 7961-8263 pullback, would be the first support, with the stop loss of which trading longs can be held on to.