NIFTY CONSOLIDATES AFTER A STEEP RUN-UP; STAY LONG THROUGH OPTIONS

NIFTY CONSOLIDATES AFTER A STEEP RUN-UP; STAY LONG THROUGH OPTIONS

WORLD MARKETS                             

Dow and S & P 500 fell 0.6% each and Nasdaq eased 0.8%, posting the worst performance of 2017 so far on the back of measure taken by the Trump administration on immigration late Friday.

In economic news, pending home sales for December rose 1.6%, while personal income rose 0.3%, below an expected increase of 0.4%.

Dollar index fell 0.1% to 100.37. Gold gained $5 to $1196 an ounce.

WTI crude fell 54 cents to $52.63 a barrel and Brent fell 29 cents to $55.23. The number of active U.S. oil rigs rose last week to the highest level since November 2015.

European markets tumbled 0.9%-3% with Italy leading the losses. Italy's biggest bank in terms of assets, UniCredit announced it would miss the European Central Bank's requirements for 2016. Basic resources stocks fell sharply after the European Union announced it had decided to impose definitive dumping duties on Chinese steel tube imports.

AT HOME

After four days of fanatic upmove, it was a day of consolidation as benchmark indices ended marginally in the red after trading in a half a percent range. Sensex settled at 27850, down 33 points while Nifty lost 8 points to finish at 8633. BSE mid-cap index however gained 0.3% while small-cap index lost 0.3%. BSE Telecom index jumped 5.9%, becoming top gainer among the sectoral indices, followed by 0.8% rise in Teck index. Auto index and Bankex were the top losers, down 0.9% and 0.8% respectively.

FIIs net bought stocks and stock futures worth Rs 607 cr and 516 cr respectively but net sold index futures worth Rs 369 cr. DIIs were net buyers to the tune of Rs 40 cr.

Rupee appreciated 9 paise to end at 67.95/$.

Idea Cellular soared after the London-based parent of Vodafone India confirmed that the company was in discussion with the Aditya Birla Group for an all-share merger of Vodafone India and Idea Cellular.

Tech Mahindra reported a q-o-q dollar revenue growth of 4.1% for the quarter ended December 2016. Rupee revenue rose 5.4% to Rs 7558 cr. Net profit rose 31% to Rs 845 cr.

RBI yesterday announced removal of cash withdrawal limits from ATMs from February 1. The central bank also removed limits from withdrwals from current, cash credit and overdraft accounts with immediate effect. The withdrawal limit on savings account will continue however. Currently, RBI has limit of Rs 24,000 a week on saving accounts.

OUTLOOK

Today, markets in China and Hong Kong are closed for the Lunar New Year public holidays. Nikkei is down a percent and SGX Nifty is suggesting a marginally lower start.

Nifty yesterday ended little changed after trading in a narrow range, consolidating after four days of heady gains and two days ahead of the Union Budget.

Overall trend however continues to be positive and 8740, the top made in October 2016, is the next target to eye. Above 8740, 8800, 8900 and 8970 would be subsequent targets to eye.

On the way down 8460, the erstwhile resistance, is the important immediate support, with the stop-loss of which trading longs can be held on to. However, tomorrow being the budget day, one would do well to carry long positions through options rather than futures.

ICICI Bank, Bajaj Auto and ONGC will report their quarterly earnings today.

8740 CONTINUES TO BE NEXT UPSIDE TARGET; 8460 IMMEDIATE SUPPORT

8740 CONTINUES TO BE NEXT UPSIDE TARGET; 8460 IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow and S & P 500 ended marginally lower while Nasdaq rose 0.1% on Friday.

The first estimate of fourth-quarter GDP showed US economy expanded at a 1.9% annual rate, a sharp deceleration from the 3.5% growth pace logged in the third quarter. Durable goods orders fell 0.4% in December and consumer sentiment for January hit 98.5, above an estimate of 98.1.

Energy stocks were under pressure as WTI crude fell 1.13% to $53.17 and Chevron shares declined after the firm reported disappointing quarterly results.

European markes, except a 0.3% higher FTSE, lost 0.1%-0.6%. Autos stocks led the losers after Trump's hawkish remarks on trade tariffs for the sector.

For the week, US indices gained 1%-1.9%. In Europe, DAX soared 1.6% but FTSE and CAC lost 0.2% each. In Asia Shanghai and Hang Seng rose 1.2% and 2% respectively and Nikkei was up 1.7%.

Trump, on Friday, signed an executive order which suspends the arrival of refugees for at least 120 days and bars visas for travelers from seven Muslim majority countries for the next three months. The order however has met severe criticism from several countries.

AT HOME

Extending the upmove to fourth straight day, Sensex and Nifty gained 0.6% and 0.4% respectively on Friday to close at the highest level since 25th October and 30th October 2016, respectively. Sensex added 174 points to settle at 27882 while Nifty finished at 8641, up 38 points. BSE mid-cap and small-cap indices gained 0.6% and 0.5% respectively. Except a 1.5% and 0.5% lower FMCG and Realty indices respectively, all the BSE sectoral indices ended in green, with Telecom and Power indices leading the tally, up 2.5% and 2.1% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 212 cr, 586 cr and 71 cr respectively. DIIs were net buyers to the tune of Rs 483 cr.

Rupee appreciated 4 paise to end at 68.04/$.

For the week, Sensex and Nifty soared 3.1% and 3.5% respectively, registering the biggest weekly gain in 8-months.

ITC reported 5.7% rise in quarterly net profit at Rs 2650 cr. Total income grew 5% to Rs 13570 cr. EBIDTA rose 2.1% to Rs 3546 cr while margins contracted 7 bps to 26.1%. Cigarette revenue rose 2.2% to Rs 8288 cr.

L & T's consolidated net profit rose 39% y-o-y to Rs 972 cr while revenue rose 1.4% to Rs 26286 cr. Operating profit rose 18.7% to Rs 2522 cr and margin expanded by 140 bps to 9.6%. Order inflow stood at Rs 34885 cr, down 10% y-o-y but was better-than-expected. The company however slashed its full year revenue growth guidance to 10% from 12-15% earlier.

OUTLOOK

Today, markets in China, Singapore, Hong Kong, South Korea and Taiwan are shut for public holidays. Nikkei is down about 0.8% and SGX Nifty is suggesting about 40 points lower start for our market.

Readers would recall that after Nifty crossed 8440 hurdle decisively, we had given a target of 8560, which was the 61.8% retracement level of the entire 8970-7894 fall. After this target was also met, we had given next level of 8740, which was the top made in October 2016.

Nifty on Friday touched a high of 8673 and closed at 8641 and is set to open around 8600 today.

Looking at the steep run-up over past four sessions, some sort of consolidation/correction cannot be ruled out.

8740 continues to be immediate target on the way up. 8460, the erstwhile resistance, would now act as the support on the way down, with the stop-loss of which, trading longs should be held on to.

HDFC and Tech Mahindra will report their quarterly earnings today.

NIFTY ACHIEVES 8560 TARGET; STAY LONG WITH THE STOP-LOSS OF 8460

NIFTY ACHIEVES 8560 TARGET; STAY LONG WITH THE STOP-LOSS OF 8460

WORLD MARKETS                             

On Wednesday, Dow and S & P 500 climbed 0.8% each while Nasdaq soared 1%, with the Dow breaking above 20,000 for the first time.

Yesterday, Dow gained 0.2% while S & P 500 and Nasdaq ended marginally lower.

The U.S. IHS Markit services PMI showed the sector expanded at its fastest pace since 2015, hitting 55.1 from 53.9. Initial jobless claims jumped 22,000 to 259,000, but have remained below 300,000 for 99 weeks straight, their longest stretch since 1970. New home sales fell 10.4% in December.

Ford matched earnings estimates, while topping sales expectations. Caterpillar beat earnings estimates but fell short of revenue expectations.

Dollar index rose abotu 0.6% to 100.53. U.S. Treasury yields fell slightly, with the benchmark 10-year note yield hovering around 2.50% percent, while the short-term two-year note yield traded at 1.22%. Gold fell $8 to $1191 per ounce.

US oill rose 2% to $53.78 per barrel. Brent added 2.1% to $56.24.

European markets, except a 0.4% higher DAX, lost upto 0.7%. Britain's economy expanded 0.6% Q-o-Q and 2.2% y-o-y in the October-December quarter.

AT HOME

Bulls continued to call the shot as Sensex and Nifty soared 1.2% and 1.5% respectively on Wednesday, extending the winning streak to third straight day and closing at the highest level since 1st November, 2015. Sensex added 333 points to settle at 27708 while Nifty finished at 8603, up 127 points. BSE mid-cap and small-cap indices rose 0.9% each. BSE Finance index climbed 2.6%, becoming top gainer among the sectoral indices, followed by 2.3% rise in Bankex and Consumer Durable index.

FIIs net bought stocks, index futures and stock futures worth Rs 1379 cr, 567 cr and 1441 cr respectively. DIIs were net buyers to the tune of Rs 383 cr.

Maruti reported 47.5% growth in quarterly net profit at Rs 1744 cr. Revenue rose 12.4% to Rs 16624 cr. Operating profit was up 16% at Rs 2489 cr and margin expanded by 50 bps to 15% y-o-y. On q-o-q basis, margin contracted by 230 bps on the back of higher discounts and raw material costs.

Kotak Mahindra Bank's standalone net profit shot up 39% to Rs 880 cr. NII grew by 16% to Rs 2050 cr. Net interest margin improved 2 bps q-o-q to 4.49%. Asset quality improved sequentially. Gross NPA ratio improved 7 bps to 2.42% and net NPA ratio improved 13 bps to 1.07%.

Wipro results disappointed with the dollar revenue down 0.7% to USD 1903 mn and constant currency growth of 0.6%. Rupee revenue rose half a percent to Rs 13196 cr with EBIT rising 3.4% to Rs 2416 cr and margin expansion of 50 bps. Company also slashed fourth quarter guidance to 1-2%. Consolidated net profit grew by 1.9% to Rs 2110 cr.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is trading around, which is about 50 points higher than Wednesday's close of February Nifty future.

After Nifty closed above the 8440 hurdle on Tuesday, we had said that 8560 the 61.8% retracement level of the 8970-7894 fall, is the upside target to eye.

Nifty soared 127 points on Wednesday to close at 8603, achieving the target mentioned above and vindicating our view.

8740, the top made in October 2016, is the next target to eye on the way up.

8460, the erstwhile resistance, would now act as immediate support, with the stop-loss of which trading longs should be held on to.

NIFTY CROSSES 8440 HUMP; STAY LONG WITH THE STOP-LOSS OF 8410

NIFTY CROSSES 8440 HUMP; STAY LONG WITH THE STOP-LOSS OF 8410

WORLD MARKETS                             

US indices gained 0.6%-0.9%, with the S & P 500 hitting a record high, on the back of more executive orders from President Donald Trump. Materials lead the upmove.

President Trump signed executive orders to make it easier for TransCanada to build the Keystone XL pipeline and for Energy Transfer Partners to build the final potion of the Dakota Access pipeline. The two pipelines have been fiercely disputed and had been delayed under the former President.

IHS Markit Manufacturing PMI for January rose to 55.1, from 54.3 in December, lifted by a surge in new orders. Existing home sales fell 2.8% in December.

Dollar index gained a third of a percent to 100.30.

Brent oil rose 0.4% to $55.44 a barrel, while US crude added 0.8% to settle at $53.18 on evidence of lower production by OPEC and other exporters. Post settlement however, crude oil prices slipped as U.S. weekly inventory data showed U.S. crude, gasoline and diesel stocks all increased last week.

European markets, except a flat FTSE, gained 0.2%-0.9%. The euro zone purchasing managers index eased slightly to 54.3 in January from 54.4 in December.

AT HOME

After a marginally higher start, benchmark saw a sustained northward move through the session to end with big gains of a percent and closed at the highest level since 10th November, marking a two and a half month high. Sensex soared 258 points to settle at 27376 while Nifty finished at 8476, up 84 points. BSE mid-cap and small-cap indices gained 1% and 0.8% respectively. Except a 0.2% and 0.1% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Auto and Metal indices leading the tally, up 1.7% each.

FIIs net bought stocks and index futures worth Rs 94 cr and 371 cr respectively but net sold stock futures worth Rs 46 cr. DIIs were net buyers to the tune of Rs 534 cr.

Rupee appreciated 5 paise to end at 68.15/$.

HCL Tech reported dollar revenue growth of 1.3% for the October-December quarter at USD 1745 mn. Growth in constant currency was 3%. Rupee revenue increased 2.6% to Rs 11814 cr and net profit grew by 2.3% to Rs 2062 cr. EBIT margin expanded by 28 bps to 20.38%. The company retained FY17 constant currency dollar revenue growth guidance at 12-14%.

HDFC Bank reported 15% growth in net profit at Rs 3865 cr. NII increased 17.5% to Rs 8309 cr, with loan growth of 13.5%. Net interest margin fell 10 bps q-o-q to 4.1%. Asset quality was stable with Gross NPA ratio rising to 1.05% from 1.02% sequentially while net NPA ratio at 0.32% vs 0.3%.

Bharti Airtel reported a massive 65% q-o-q fall in third quarter profit at Rs 504 cr. Revenue fell 5.3% to Rs 23336 cr. Operating profit fell 9.5% to Rs 8570 cr and margin declined 170 bps to 36.7% q-o-q.

OUTLOOK

Today morning, except a 0.3% lower Shanghai, other Asian markets are trading with gains of 0.3%-1.3% with Nikkei on the top. SGX Nifty is suggesting about 30 points higher start for our market.

Nifty yesterday soared 84 points to settle at 8476, crossing the 8440 hurdle decisively. Next target, as we have been mentioning, is 8560, which is the 61.8% retracement level of the entire 8970-7894 fall.

Meanwhile, immediate support on the hourly chart is placed at 8410, with the stop-loss of which trading longs can be held on to.

Maruti, Kotak Bank, Ashok Leyland and Wipro will report their quarterly earnings today.

8424-8440 IS THE RESISTANCE ZONE; 8275-8244 SUPPORT AREA

8424-8440 IS THE RESISTANCE ZONE; 8275-8244 SUPPORT AREA

WORLD MARKETS                             

US indices fell upto 0.3% with Energy and Industrial stocks leading the decline.

President Trump signed an executive order announcing his intention to withdraw from the Trans-Pacific Partnership (TPP), a trade agreement among 11 other Pacific Rim countries which was negotiated by former President Barack Obama's administration. Trump also said his administration could cut regulations by 75% or "maybe more" although further details were not given.

Treasuries rose, with the benchmark 10-year note yield falling to 2.40%, while the two-year note yield slipped to 1.15%. Dollar index fell about two-third of a percent to 99.93, marking a seven-week low. Gold rose $11 to $1,216 per ounce.

Brent crude fell 0.5% to $55.23 a barrel, while US oil eased 0.9% to $52.75 after data from Baker Hughes showed that U.S. drillers added the most rigs in nearly four years last week.

European markets fell 0.6%-0.8%.

AT HOME

Sensex and Nifty managed to end higher by 0.3% and 0.5% respectively after a choppy trading session. Sensex added 83 points to settle at 27117 while Nifty finished at 8391, up 42 points. BSE mid-cap and small-cap indices gained half a percent each. BSE Metal index soared 2.6%, becoming top gainer among the sectoral indices, followed by 1.4% rise in Basic Material index. Capital Goods and Healthcare indices were the top losers, down 0.6% and 0.5% respectively.

FIIs net sold stocks and stock futures worth Rs 289 cr and 26 cr respectively but net bought index futures worth Rs 353 cr. DIIs were net buyers to the tune of Rs 520 cr.

Rupee depreciated 2 paise to end at 68.20/$.

HUL's December quarter profit, boosted by exception gain, rose 7% to Rs 1038 cr. However, stripped of exceptional items, profit fell 10%. Income fell 0.8% to Rs 8318 cr. Volume growth was disappointing at negative 4% from negative 1% q-o-q. EBIDTA margin stood at 16.3% v/s 17% y-o-y.

Asian Paints reported 1.5% y-o-y rise in net profit at Rs 489 cr. Revenue rose 2.6% to Rs 4354 cr.

OUTLOOK

Today morning, except a marginally lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points higher start for our market.

After Nifty broke immediate support of 8370, we have been working with downside target of 8275-8244 where 8275 is the top made in December and 8244 is the 38.2% retrcement level of the recent 7900-8460 upmove.

The benchmark, after opening at 8327 yesterday, recoerd to close at 8391 and is set to open higher today. After this opening, it would be again back in the vicinity of 8425-8440 resistance area where 8425 is where the trendline adjoining recent tops on the hourly chart is placed while 8440 is where the 34-week moving averge is palced. Only when 8440 is taken out decisively, a clean, fresh upmove can happen.

Traders are advised to hold on to short positions until 8440 hurdle is taken out decisively.

HCL Tech, Bharti Airtel, HDFC Bank and Kotak Bank will report their quarterly earnings today.

NIFTY RETREATS FROM IMPORTANT HURDLE; STAY SHORT WITH STOP-LOSS OF 8410

NIFTY RETREATS FROM IMPORTANT HURDLE; STAY SHORT WITH STOP-LOSS OF 8410

WORLD MARKETS                             

US indices gained 0.3%-0.5%, with the Dow snapping a five-day losing streak.

Donald Trump took a protectionist tone in his first speech as president by saying that "We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs," and added that "We will follow two simple rules: Buy American and hire American.”

Trump signed his first executive order on shortly after his inaugural parade ended, directing agencies to ease the regulatory burdens associated with Obamacare. A special session of the US Congress will soon be held to "repeal and replace" Obamacare.

Trump also spelled out his priorities for trade policies, Security and job creation through White House website in which he said that he is committed to renegotiate NAFTA and should the partners refuse negotiation, US will withdraw from NAFTA. Personal and Corporate tax rates are also likely to go down.

U.S. Treasury yields gave back some gains after Trump's speech, with the benchmark 10-year note yield trading around 2.489% and the two-year note yield near 1.19%. Dollar index fell about 0.3% to 100.81.0

GE posted in-line adjusted earnings per share while revenue came slightly below estimates. P&G's results topped estimates on both the top and bottom lines.

European markets, except a 0.1% lower FTSE and marginally lower Italy, gained upto 0.3%.

For the week, US indices fell 0.2%-0.3%. In Europe, FTSE and CAC tumbled 1.9% and 1.5% respectively but DAX ended flat. In Asia, Nikkei fell 0.8%, Hang Seng was down 0.2% but Shanghai gained 0.3%.

AT HOME

After a modestly lower start, benchmark indices traded in a narrow range in the morning session but saw a sharp plunge in the noon trade to end with deep cuts of 1%, marking the biggest single day fall in a month. Sensex slumped 274 points to settle at 27034 while Nifty ended at 8349, down 86 points. BSE mid-cap and small-cap indices tumbled 1.5% and 1.3% respectively.

FIIs net sold stocks and stock futures worth Rs 26 cr and 656 cr respectively but net bought index futures worth Rs 437 cr. DIIs were net sellers to the tune of Rs 437 cr.

Rupee depreciated 6 paise to end at 68.18/$.

For the week, Sensex and Nifty lost 0.7% and 0.6% respectively, breaking the three-week winning streak.

Ultratech reported better-than-expected 5% rise in net profit at Rs 594 cr. Topline was down 2% at Rs 8372 cr. Operating profit margin improved to 17.5% from 17.1%.

OUTLOOK

Today morning Nikkei is down a percent, other Asian markets are trading and SGX Nifty is suggesting a flattish start for our market.

For couple of session we had been cautioning that a decisive crossover of 34-week moving average, placed around 8435, is required for a fresh upmove. Nifty, after hovering around this level for five-sessions, plunged on Friday to end at 8349, vindicating our caution.

We had also said that 8370 is the immediate support on the hourly chart, upon breach of which 8300-8275, where 200 DMA and the top made in December are placed, would be the downside target area to eye.

As mentioned above, Nifty, on Friday touched a low of 8341 and is set to open flat today. 8300-8275 continues to be immediate support, below which 8244, the 38.2% retracement level of the recent 7894-8461 upmove, would be the next support to eye.

Meanwhile, immediate hurdle on the hourly chart is placed around 8410, with the stop-loss of which trading shorts can be held on to.

HUL and Asian Paints will report their quarterly earnings today.

8440 CONTINUES TO BE A HURDLE; TRUMP INAUGURATION IN FOCUS

8440 CONTINUES TO BE A HURDLE; TRUMP INAUGURATION IN FOCUS

WORLD MARKETS                             

US indices fell 0.3%-0.4% ahead of Donald Trump's inauguration. For the Dow, it was the fifth straight day of losses.

Weekly jobless claims dropped 15,000 to 234,000, around their lowest levels in 40 years. Housing starts spiked 11.3% in December, beating estimates. The Philadelphia Federal Reserve business conditions index rose to 23.6, above a consensus estimate of 15.8.

U.S. Treasury yields extended gains following the data releases, with the benchmark 10-year note yield at 2.487%, while the two-year note yield advanced to 1.238%. Dollar index, after toughing a high of 101.73, slipped to end at 101.17, the previous close being 101.29.

European market, except a 0.7% higher Italy, fell upto 0.5% with FTSE leading the losses. European Central Bank kept monetary policy unchanged. The euro briefly fell versus the dollar after ECB President Mario Draghi said in a news conference there is no sign of a convincing upward trend in underlying inflation.

AT HOME

After a flattish start, benchmark indices managed to add a fifth of a percent through the choppy trade. Sensex settled at 27309, up 51 points while Nifty added 18 points to finish at 8435. BSE mid-cap and small-cap indices rose 0.4% and 0.3% respectively. BSE Oil & Gas and Telecom indices climbed 2% and 1.4% respectively to become top gainers among the sectoral indices while Healthcare and Finance indices were the top losers, down 0.5% and 0.2% respectively.

FIIs net sold stocks and index futures worth Rs 132 cr and 210 cr respectively but net bought stock futures worth Rs 589 cr. DIIs were net buyers to the tune of Rs 380 cr.

Rupee depreciated 4 paise to end at 68.12/$.

Yes Bank's third quarter earnings beat expectations with profit rising 31% to Rs 883 cr. NII grew by 30% to Rs 1507 cr, with loan growth of 39%. Gross NPA ratio stood at 0.85%, up from 0.83% q-o-q while net NPA ratio was unchanged at 0.29%.

Axis Bank however disappointed as profit fell 73% to Rs 580 cr. NII grew 4.1% to Rs 4334 cr. Asset quality weakened with gross NPA ratio at 5.22% from 4.17% q-o-q and net NPA ratio at 2.18%, up from 2.02%. NIMs fell 21 bps to 3.43%. Watch list loans reduced to 2.8% of customer assets in December 2016, from 3.5% in September 2016 and 6.2% at the beginning of the current financial year. However non-watchlist slippages rose 33%. Gross slippages were down by 48% QoQ at Rs 4,560 crore, which were lower than estimates of Rs 4,500 crore.

OUTLOOK

Today morning, Shanghai is marginally higher, Nikkei is flat but Hang Seng is down half a percent. SGX Nifty is suggesting about 25 points lower start for our market.

At the risk of repeating, we have been mentioning that the 34-week moving average for Nifty is placed around 8440, a decisive crossover of which is required for a fresh upmove. For past five sessions, Nifty has been struggling to cross this level decisively.

Today being the weekly close, is would be interesting to see if the benchmark is able to cross this hurdle or moves further away from it. If 8440 is taken out decisively, 8560, the 61.8% retracement level of the 8970-7893 fall, would be the next target to eye.

8370 continues to be immediate support on the hourly chart below which 8300-8275 would be the next support area.

NIFTY FAILS TO CROSS 8435 HUMP; 8370 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY FAILS TO CROSS 8435 HUMP; 8370 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow lost 0.1% while S & P 500 and Nasdaq gained 0.2% and 0.3% respectively after digesting remarks from Yellen, corporate earnings and economic data.

In prepared remarks, Yellen said the U.S. economy was closing in on the central bank's goals, giving it impetus to start reducing the extreme levels of support it has provided over the past decade.

Fed released its latest Beige Book, which said that a pickup in manufacturing, "widespread" reports of labor shortages and improving business investment set the stage for the Fed's December rate hike.

In economic news, the Consumer Price Index rose 0.3%, in line with expectations, putting it up 2.1% y-o-y. This was also the first time CPI rose above 2% since 2014. Industrial production grew 0.8% in December and the NAHB survey for January showed homebuilder sentiment pull back slightly.

Remarks from Yellen, stronger U.S. data and a positive Beige book pushed the dollar to 101.30, up nearly a percent. Treasury yields rose with benchmark 10-year note yielding 2.42%.

Goldman Sachs and Citigroup posted better-than-expected earnings.

Oil slipped with Brent down 2.8% at $53.92 a barrel and WTI down 2.7% at $51.08.

European markets, except a 0.1% lower CAC, gained 0.3%-0.5%.

AT HOME

After gaining about three fourth of a percent in first hour and half, benchmark indices gave away quite a bit of them through the session to end just marginally higher. Sensex settled at 27255, up 22 points while Nifty added 19 point to finish at 8417. BSE mid-cap and small-cap indices rose 0.4% and 0.6% respectively. BSE Metal and Basic Material indices climbed 2.3% and 1.9% respectively to become top gainers among the sectoral indices while Telecom and Oil & Gas indices were the top losers, down 0.9% and 0.2% respectively.

FIIs net bought stocks and stock futures worth Rs 319 cr and 245 cr respectively but net sold index futures worth Rs 896 cr. DIIs were net buyers to the tune of Rs 245 cr.

Rupee depreciated 13 paise to end at 68.08/$.

The Cabinet yesterday approved plans to divest a 25% stake in each of the five fully-owned public sector general insurance companies by listing these on stock exchanges.

OUTLOOK

Today morning Nikkei is up more than a percent while Hang Seng and Shanghai are down about four tenth of a percent. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had reiterated the view that a decisive crossover of 8435, where 34-week moving average is placed, is required for a fresh upmove.

The benchmark, after touching a high of 8460, slipped to end at 8417, failing to close above the 8435 hurdle.

Upon a decisive crossover of this hurdle, next target to eye would be 8560, which is the 61.8% retracement level of the 8970-7893 fall.

Meanwhile, 8370 is where Nifty has been taking support for past couple of days. If that is taken out, next support to eye would be 8300-8275 region where 8300 is 200-DMA and 8275 is the top made in December.

Traders are advised to hold on to long positions with the stop-loss of 8370.

Axis Ban and Yes Bank will report their quarterly earnings today.

NIFTY AGAIN RESISTED NEAR 34-WMA; TRAIL STOP-LOSS TO 8370

NIFTY AGAIN RESISTED NEAR 34-WMA; TRAIL STOP-LOSS TO 8370

WORLD MARKETS                             

Dow and S & P 500 fell 0.3% each while Nasdaq lost 0.6% with financials leading the losses on concerns of a hard Brexit and as uncertainty around President-elect Donald Trump's policies grew ahead of his inauguration scheduled for Friday.

Dollar index tumbled about 0.8% to 100.30, a one-month low, after Trump's comments that "dollar was too strong which makes it hard for American companies to compete with China".

In a speech, British Prime Minister Theresa May indicated the United Kingdom would seek a clean break from the European Union. She added, however, The U.K. government will put the Brexit deal it agrees with the European Union to a parliamentary vote.

The British pound skyrocketed more than 2.5% against the dollar, trading around $1.24, on track for its best day since 2008.

European markets, except a 0.2% higher Italy, fell 0.2%-1.5% with FTSE leading the losses

Speaking at the World Economic Forum in Davos, Chinese President XI Jinping said that nobody would emerge as a winner in a trade war. This was the first time a Chinese president ever attended the forum

AT HOME

After gaining about a third of a percent in the initial trade, benchmark indices saw a sustained downward move through the session to end lower by a fifth of a percent. Sensex lost 53 points to settle at 27236 while Nifty finished at 8398, down 15 points. BSE mid-cap index ended flat while small-cap index gained 0.3%. BSE Energy and Metal indices tumbled 2.1% and 1.5% respectively, becoming top losers among the sectoral indices while FMCG and Utilities indices were the top gainers, up 1% and 0.6% respectively.

FIIs net bought stocks worth Rs 142 cr but net sold index futures and stock futures worth Rs 170 cr and 305 cr respectively. DIIs were net sellers to the tune of Rs 607 cr.

Rupee appreciated 15 paise to end at 67.95/$.

In a relief to FPIs who were fearing multiple taxation, the tax department yesterday kept in abeyance its recent circular on indirect transfer of shares by foreign investors.

OUTLOOK

Today morning, except a 0.2% higher Hang Seng, other Asian markets are trading with cuts of upto 0.8% with Nikkei leading the losses. SGX Nifty is suggesting a marginally higher start for our market.

Readers would recall that after Nifty achieved 8430 target, we have been mentioning that a decisive crossover of this level, which coincides with 34-week moving average, is required for the fresh upmove.

Nifty, yesterday, after touching a high of 8440, slipped to end at 8398.

We would like to reiterate that a decisive crossover of 34-WMA, placed around 8435, is required for the fresh upmove. If that happens, 8560, the 61.8% retracement level of the 8970-7894 fall, would be the next target to eye.

Meanwhile, Nifty has been taking support around 8370 mark for past 3-sessions. A breach of 8370 would pave the way for further correction and next support area to eye in that case would be 8300-8275 where 8300 is the 200-DMA while 8275 is the top made in December.

Traders are advised to trail the stop-loss in long positions to 8370.

NIFTY CONSOLIDATES AROUND 34-WMA HURDLE; MAY SPEECH IN FOCUS

NIFTY CONSOLIDATES AROUND 34-WMA HURDLE; MAY SPEECH IN FOCUS

WORLD MARKETS                             

US markets were shut yesterday on account of Martin Luther King Day.

European markets ended with cuts of 0.2%-1.4% ahead of British Prime Minister Theresa May's speech on Brexit plans due today.

The British pound fell to three-month lows, following media reports that suggested May will announced a "clean" and "hard" Brexit, pulling the country from the European market and the European customs union, in exchange for the ability to control immigration laws and leave the jurisdiction of the European Court of Justice.

Euro zone exports rose in November, exceeding the number of imports by 25.9 billion euros ($27.6 billion).

AT HOME

After opening with cuts of about three tenth of a percent, benchmark indices saw a sustained northward journey through the session to end higher by about a fifth of a percent. Sensex settled at 27288, up 50 points while Nifty added 12 points to finish at 8413. BSE mid-cap and small-cap indices gained 0.3% and 0.6% respectively. BSE Realty index soared 1.6%, becoming top gainer among the sectoral indices, followed by 1.03% rise in Finance index. IT and Teck indices were the top losers, down 1% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 347 cr, 119 cr and 200 cr respectively. DIIs were net buyers to the tune of Rs 203 cr.

Rupee appreciated 6 paise to end at 68.10/$.

India’s wholesale inflation rate grew 3.39% in December, marginally quicker than November’s 3.15%.

Reliance Industries reported 4.1% q-o-q rise in net profit at Rs 8022 cr, boosted by other income that grew sharply by 33% q-o-q to Rs 3025 cr. Revenue rose 3.5% to Rs 66606 cr. Gross refining margin stood at USD 10.80  barrel, up from 10.1 a barrel but were lower than the expected 11.50 mark.

IMF cut India's growth forecast for current fiscal to 6.6%from 7.6% earlier due to the "temporary negative consumption shock" of demonetisation.

GST is likely to be rolled out from July 1 as the Centre and states reached an agreement over the two thorny issues of "dual control" and taxing rights of goods moved through high seas.

Under the agreed model, all assesses with an annual turnover of Rs 1.5 crore or below will be split on a 90:10 ratio between the states and the Centre. States would assess 90% of businesses with an annual turnover Rs 1.5 crore, while the Centre will assess the remaining 10%. Businesses with a turnover of more than Rs 1.5 crore will be split equally with the states assessing 50% of such traders and the Centre the remaining 50%.

The issues agreed upon on Monday will now be incorporated in the draft IGST, CGST and SGST laws. Once those drafts are approved by the council, respective legislative bodies (the Parliament and state Assemblies) will take these for approval.

OUTLOOK

Today morning, Hang Seng is flat, Nikkei and Shanghai are down about half a percent and SGX Nifty is suggesting a flattish start for our market.

As we have been mentioning, Nifty has achieved the 34-week moving average target placed around 8435 and a decisive crossover of this hurdle is required for a fresh upmove. 8560, the 61.8% retracement level of the 8970-7893 fall, would be the next target if that happens.

Meanwhile, 8300 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs should be held on to.