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.