8275 CONTINUES TO BE NEXT TARGET; 8130 IMMEDIATE SUPPORT

8275 CONTINUES TO BE NEXT TARGET; 8130 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices added 0.3%-0.9% yesterday after digesting the Federal Reserve's December meeting minutes. Consumer discretionary and material stocks led the gainers.

The minutes showed the central bank is concerned about a strengthening dollar, and that more fiscal stimulus could raise demand above sustainable levels.

Mortgage applications tanked 12% week-on-week as rising interest rates weighed. U.S. auto sales for December came in much stronger than expected, with a pace of 18.4 million, versus an estimate of 17.7 million.

U.S. Treasurys rose after the Fed minutes were released, with the benchmark 10-year yield at 2.435% and two-year note yield at 1.222%. Dollar index fell about 0.6% to 102.52.

WTI oil rose 2% to $53.26 and Brent added 1.8% to $56.46 a barrel after data from the American Petroleum Institute showed a surprise 7.4 milllion barrel drawdown in inventory.

European markets ended flat to modestly higher. The latest flash euro zone inflation figures showed an increase of 0.5% increase in consumer prices. The yearly rate moved from 0.6% in November to 1.1% in December.

The Bank of England said Wednesday that consumer credit grew at its fastest pace since 2005 in the month of November.

Earlier, Nikkei soared 2.5% on the back of the dollar's weakness and strong domestic economic data.

AT HOME

Benchmark indices ended little changed after a rangebound but choppy trade. Sensex lost 15 points to settle at 26628 while Nifty finished at 8191, down 2 points. BSE mid-cap index ended marginally in the red while small-cap index gained 0.4%. BSE Telecom and Realty indices soared 2.4% each, becoming top gainers among the sectoral indices while Bankex and Energy indices were the top losers, down 0.9% each.

FIIs net sold stocks worth Rs 801 cr but net bought index futures and stock futures worth Rs 181 cr and 318 cr respectively. DIIs were net buyers to the tune of Rs 427 cr.

Rupee appreciated 28 paise to end at 68.05/$.

During the two-day GST Council meeting that concluded yesterday, Centre and states failed to iron out differences on contentious issues of “dual control” and taxing rights of goods moved through high seas. The council will again meet on January 16. The delay has worsened prospects of an early GST rollout and the original deadline of April 1, 2017 looks missed for now.

India's Nikkei/Markit Services PMI stood at 46.8 in December as against reading of 46.7 in November.

OUTLOOK

Today morning, Nikkei is modestly lower but Hang Seng and Singapore are 0.9% each and Shanghai is marginally in the green.  SGX Nifty is suggesting about 30 points higher start for our market.

After last week's mammoth 2.5% upmove, this week, so far, has belonged to consolidation. However, we have maintained positive bias through this phase and have been advising holding on to trading longs with a trailing stop-loss for the next target of 8275.

8275, the top made in December, which also coincides with 200-DMA, continues to be major upside target as well as hurdle to eye.

8130 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.