NIFTY TAKES OUT 7850 HURDLE; STAY LONG WITH STOP LOSS OF 7810

NIFTY TAKES OUT 7850 HURDLE; STAY LONG WITH STOP LOSS OF 7810

WORLD MARKETS                             

US indices soared 0.9%-1.2% yesterday on the back of healthy economic data and the recovery in oil prices, extending the winning streak to third straight day.

Personal consumption expenditures rose 0.3% on-month in November after remaining flat in October, adding to the market's optimistic mood one day after better-than-expected third-quarter growth data. The final University of Michigan consumer sentiment survey for December was 92.6, up from 91.3 in November. Durable goods orders were unchanged in November. New home sales rose 4.3% in November to a seasonally adjusted annual rate of 490,000 units, following a downward revision to October's sales pace to 470,000 units.

Energy stocks gained after Nymex oil soared $1.36 or 3.8% to $37.50 a barrel, after data showed U.S. crude inventories fell by 5.9 million barrels in the last week, compared with expectations for an increase of 1.1 million barrels.

European markets soared 1.9%-2.6%.

AT HOME

After a gap up opening, benchmark indices added some more gains through the session to end higher by a percent. Sensex settled at 25850, up 260 points while Nifty added 80 points to finish at 7866. BSE mid-cap and small-cap indices gained 0.3% and 0.4% respectively. All the BSE sectoral indices ended higher with Telecom and Metal indices leading the tally, up 2.3% and 1.9% respectively. FIIs net bought stocks, index futures and stock futures worth Rs 386 cr, 556 cr and 250 cr respectively. DIIs were net buyers to the tune of Rs 633 cr.

Rupee appreciated 11 paise to end at 66.205/$.

The Winter Session of Parliament ended on a disappointing note yesterday with both the Goods and Service Tax (GST) Constitutional Amendment Bill as well as the Bankruptcy Bill failing to clear vote.

In the Financial Stability Report released yesterday, RBI said that India's financial system continues to be stable and the relatively stronger macroeconomic fundamentals adds resilience to face the still prevailing uncertainty and emerging risks in the global economy and financial markets. The RBI further sounded caution on the quality of assets, adding that risks to the banking sector has increased since the publication of the last FSR (June 2015) that highlighted Indian economy's resilience, saying there was no room for complacency.

OUTLOOK

Today morning Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had reiterated our view that 7850 continues to be immediate hurdle, a sustained trading above which will open up the space for the further upside till about 7980, the top made in early December.

The benchmark, after four days of struggle, finally crossed this hurdle yesterday by closing at 7866 and as mentioned above, next target to eye now is 7980.

Immediate support on the hourly chart has moved up to 7810, with the stop loss of which long positions should be held on to.