EQUITIES EXTEND GAINS ON CENTRAL BANK SUPPORT HOPES; INFY, US JOBS REPORT IN FOCUS TODAY

EQUITIES EXTEND GAINS ON CENTRAL BANK SUPPORT HOPES; INFY, US JOBS REPORT IN FOCUS TODAY

WORLD MARKETS                             

US indices surged 1.8% each yesterday on speculation that central banks will support growth even as the American economy shows signs of strength.

Minutes of the latest Fed meeting released on Wednesday suggested that the Fed is unlikely to raise interest rates before late April. The minutes also showed some Fed officials are concerned about risks posed by overseas economies.

Fed Bank of Chicago President Charles Evans yesterday said he did not believe the central bank should be in a rush to hike interest rates.

Weekly jobless claims dropped by 4000 to 294000.

In a letter to European lawmakers, ECB President Mario Draghi said the ECB would reassess its monetary-policy stance early this year, and that ECB moves could include sovereign bond purchases.

Nymex oil rose 14 cents or 0.3% to $48.79 a barrel; Brent fell 26 cents to $51 a barrel.

European markets climbed between 2.3%-3.6% on Draghi's reiteration that the ECB was ready to start "full-blown" quantitative easing. A euro area business confidence index for December fell to 0.04 versus a reading of 0.17 in November. Also, German factory orders showed a sharp monthly fall in November, with new orders down 2.4%.

AT HOME

After three days of retreat, bulls were back with a vengeance as Nifty and Sensex soared 1.64% and 1.36% respectively in today's trade, with Nifty registering largest gain since 31st October 2014. Sensex gained 366 points to settle at 27275 while Nifty finished at 8235, up 132 points. BSE mid-cap and small-cap indices gained 1.8% each. All the BSE sectoral indices ended in green with Realty index and Bankex leading the tally, putting on 2.6% and 2.1% respectively.

FIIs net sold stocks and index futures worth Rs 467 cr and 177 cr respectively but net bought stock futures worth Rs 508 cr. DIIs were net buyers to the tune of Rs 289 cr.

Rupee appreciated 50 paise to end at 62.67/$, marking a 4-week high.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1% and SGX Nifty is suggesting about 50 points higher opening for our market.

In yesterday's report we had mentioned that after holding the 8050 support Nifty was set for a bounce back and that 8211, the 38.2% retracement level of the recent 8446-8065 fall, would be the first hurdle above which 8300, the 61.8% retracement level, would be the next resistance.

Nifty surged 132 points yesterday to end at 8235 and is set to open about 60 point higher today which would take it closer to 8300 mark. A sustained trading above 8300 would generate a buy on the hourly chart and would pave the way for the further upside till 8446, the top made on Monday.

Traders are advised to book some profits in trading longs around 8300 and can initiate fresh ones if the benchmark sustains above 8300.

Tech major Infosys will kick start the December quarter earnings season today. Dollar revenues are expected to grow 1% q-o-q to USD 2222 mn while rupee revenues may rise 3.3% to Rs 13783 cr. Net profit is expected at Rs 3157 cr, up 1.9%. EBIDTA margin is expected at 25.95% vs 26.1% in previous quarter. The company is expected to cut its FY15 dollar revenue growth guidance to 6-8% from 7-9% due to cross currency impact.

Also in focus would be US non-farm payroll report which is expected to show an addition of 240000 jobs in December. Unemployment rate is expected to dip to 5.7%.

WORLD EQUITIES REBOUND AS OIL STABILIZES, GREEK WORRIES EBB; NIFTY FIND SUPPORT AROUND 8050 AS EXPECTED

WORLD EQUITIES REBOUND AS OIL STABILIZES, GREEK WORRIES EBB; NIFTY FIND SUPPORT AROUND 8050 AS EXPECTED

WORLD MARKETS                             

US indices surged a percent and fifth yesterday, with the S & P 500 rebounding from a five-session dip, as oil rebounded, concerns eased about a Greek exit from the European Union and investors offered a favorable reaction to minutes from the Federal Reserve.

After four sessions of losses, Nymex crude settled 1.5% or 72 cents higher yesterday at $48.65 per barrel. Brent rose 5 cents to $51.15 after earlier falling below $50 for the first time since May 2009.

Germany left open the door to discussing options with Greece's next government on its debt, easing worries about a Greek departure from the euro zone.

The release of the Federal Reserve's December meeting minutes, which indicated the Fed wasn't ready to hike for at least the next couple of meetings, also lifted sentiment.

Private employers added 241,000 jobs to their payrolls in December, surpassing projections of a 226,000 gain, according to the ADP National Employment report.

European markets, except a 0.1% lower Italy, gained between 0.2%-0.8%. Eurozone inflation for December came in at negative 0.2%, dipping in the territory for the first time since 2009, adding more pressure on the ECB to launch a US fed style bond buying program.

AT HOME

Benchmark indices ended lower by three tenth of a percent after a choppy trading session, extending the losing streak to third straight day. Sensex lost 79 points to settle at 26909 while Nifty finished at 8102, down 25 points. BSE mid-cap and small-cap indices ended flat. BSE Metal index and Bankex lost 1.4% and 0.6% respectively, becoming top losers among the sectoral indices while Oil & Gas index was the top gainer, up 1.4%, followed by a 0.3% rise in the Consumer Durable index.

FIIs net sold stocks, index futures and stock futures worth Rs 1073 cr, 217 cr and 193 cr respectively. DIIs were net buyers to the tune of Rs 601 cr.

Rupee appreciated 40 paise to end at 63.17/$.

OUTLOOK

Today morning, barring a half a percent lower Shanghai, other Asian markets are trading with gains ranging from 0.5% to 1.5% and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that a trendline adjoining bottoms made in October and December 2014 lands a support around 8050 and the lower bad of bollinger on the daily chart is also placed around that level and had therefore advised booking profits in short positions as 8050 approaches.

Nifty, after touching a low of 8065, rebounded to end at 8102 and is set to open higher today, giving more credence to the 8050 support.

On the way up, 8211, the 38.2% retracement level of the recent 8446-8065 fall, would be the first hurdle above which 8300, the 61.8% retracement level, would be the next resistance.

Traders can play for the pullback but book profit above 8211. Fresh shorts should be created only below 8050.

LARGEST PERCENTAGE FALL FOR NIFTY IN FOUR MONTHS; 8050 IS THE NEXT MEANINGFUL SUPPORT

LARGEST PERCENTAGE FALL FOR NIFTY IN FOUR MONTHS; 8050 IS THE NEXT MEANINGFUL SUPPORT

WORLD MARKETS                             

US indices fell between 0.7%-1.3% yesterday, with the S & P 500 extending the losing streak to fifth straight day.

Energy stocks led the losers as oil continued to fall with the Nymex oil plunging another 4.2% to close at $47.93 a barrel. Brent fell 4% to $50.90. Gold rose 1.3% to $1219 an ounce. Dollar index surged to 91.73. US 10-year treasury yield fell 9 bps to 1.9429%.

Yesterday's economic reports had the Institute for Supply Management's non-manufacturing index declining to 56.2 last month from 59.3 in November, marking the lowest reading in six months. Separate data had factory orders down in November.

European markets saw cuts of upto 1.2% with the Spain and FTSE leading the tally. Markit's final composite PMI for the euro zone came in at 51.4—lower than the earlier estimate of 51.7. In the U.K., Markit's PMI index for the services sector hit a 19-month low and suffered its biggest decline in more than three years.

AT HOME

Suffering the worst percentage fall since 3rd September 2013, benchmark indices plunged 3% in today's trade to end at the lowest level since 17th December 2014. Sensex nosedived 855 points to settle at 26987 while Nifty finished at 8127, down 251 points. BSE mid-cap and small-cap indices also lost 3% each. All the BSE sectoral indices ended in red with Oil & Gas and Realty indices leading the tally, giving away 4.2% and 3.7% respectively.

India's HSBC Services PMI for December fell to 51.1 from 52.6 in November. The composite PMI too eased to 52.9 from 53.6.

FIIs net sold stocks and index futures worth Rs 1571 cr and 2817 cr respectively but net bought stock futures worth Rs 260 cr. DIIs were net buyers to the tune of Rs 1190 cr.

Rupee depreciated 16 paise to end at 63.57/$.

OUTLOOK

Today morning, barring a modestly lower Hang Seng and a flattish Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that the immediate support on the hourly chart is placed at 8290, a sustained trading below which would generate a sell on the hourly chart and would pave the way for the further correction and had therefore advised keeping a stop loss of 8290 in trading longs.

The benchmark broke 8290 support in the initial trade itself and as feared plunged all the way to 8111 before closing at 8127.

With yesterday's fall, benchmark has also broken immediate previous bottom placed at 8147 which was also the 61.8% retracement level of the recent 7961-8446 upmove. This has opened up the possibility of the retest of the 7961 bottom. Before that a trendline adjoining bottoms made in October and December 2014 lands a support around 8050. Also, that is where the lower bad of bollinger on the daily chart is placed. This makes 8050-7960 a broad support zone.

On the way up 8300 is the immediate resistance on the hourly chart above which 8446, the top made yesterday would be the bigger hurdle to eye.

Traders are advised to book profit in short positions as 8050 support approaches. Fresh longs should wait for the crossover of 8300.

PLUNGING OIL, EUROPEAN WORRIES PULL WORLD EQUITIES LOWER

PLUNGING OIL, EUROPEAN WORRIES PULL WORLD EQUITIES LOWER

WORLD MARKETS

US indices plunged 1.6%-1.9% yesterday, with the S & P 500 extending losing streak to fourth session, as energy stocks tracked steep fall in oil and worries over Greece and European economy weighed on the sentiment.

U.S. automakers reported strong domestic sales in December, with General Motors surpassing estimates and posting a 19% gain for the month.

Nymex oil nosedived $2.65 or 5% to 50.04 a barrel, the lowest level since April 2009. Brent fell $3 to $53.

Greek Prime Minister Antonis Samaras said the current election could result in an exit from the European Union should the Syriza party win, with the comments pushing the euro to a near nine-year low.

European markets tumbled 2%-6%, with Greece leading the tally, followed by Spain and Italy. Inflation in Germany fell to a five-year low of 0.1% in December from 0.5% in December.

                                                             

AT HOME

After rising more than half a percent in the initial trade, benchmark indices saw a steep profit booking through rest of the session to end lower by  a fifth of a percent, breaking six-day winning streak. Sensex settled at 27842, down 46 points while Nifty finished at 8378, down 17 points. BSE mid-cap and small-cap indices however ended higher by 0.2% and 0.1% respectively. BSE Auto and Consumer Durable indices gained 1.1% each, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, giving away 1% each.

FIIs net bought stocks worth Rs 472 cr but net sold index futures and stock futures worth Rs 605 cr and 26 cr respectively. DIIs were net sellers to the tune of Rs 576 cr.

Rupee fell 13 paise to end at 63.41/$.

The Union Cabinet yesterday approved the largest ever telecom spectrum auction that is targeted to fetch at least Rs 64,840 crore from its sale next month. The Cabinet also approved an ordinance for auction of iron ore and other minerals, yet again opting the emergency route that was adopted for coal, insurance and land acquisition reforms.

OUTLOOK

China's HSBC Services PMI for December has come in at 53.4, which is up from 53 in November and is a 3-month high.

Barring a modestly higher Shanghai, other Asian markets are trading with cuts ranging from 0.5%-2% and SGX Nifty is suggesting about 65 points lower opening for our market.

In yesterday's report we had mentioned that the near term view in Nifty has turned bullish as the benchmark has closed above the 61.8% retracement level of the 8627-7961 fall and also regained higher-top higher-bottom formation on the daily chart.

We had also mentioned that 8500 is the immediate target above which 8627 would be the next target and had advised staying long with the stop loss of 8280.

Nifty, yesterday, after touching a high of 8446 in the initial trade, reversed to end at 8378 and is set to open with a downward gap today, which will take it close to the immediate support on the hourly chart, which is now placed around 8290. A sustained trading below 8290 would generate a sell on the hourly chart and would pave the way for the further correction.

On the way up, 8446, the top made yesterday, would now act as the immediate resistance, a crossover of which would be required to take the benchmark to higher levels.

Traders are advised to keep a stop loss of 8290 in trading longs.

NIFTY BREAKS OUT AFTER A CONSOLIDATION; STAY LONG WITH THE STOP LOSS OF 8280

NIFTY BREAKS OUT AFTER A CONSOLIDATION; STAY LONG WITH THE STOP LOSS OF 8280

WORLD MARKETS

Dow and S & P 500 ended little changed on Friday while Nasdaq lost 0.2%.

ISM manufacturing index came in at 55.5 in December, below expectations of a decline to 57.6 from 58.7 in November; separately, construction spending dropped 0.3% in November, versus a projected 0.3% gain.

Dollar index hit a nine-year high of 91.15 and the Euro slid to an almost nine-year low at 1.1996/$ after ECB chief Draghi, in an interview, said that he couldn't exclude the risk of deflation, stroking speculation that a full-scale quantitative easing is coming. Political situation in Greece also weighed on the currency.

Main European markets ended with cuts of 0.3%-0.5% while Italy and Spain gained about two third of a percent. Markit's final manufacturing PMI for the euro zone read 50.6 in December, slightly below the flash estimate.

Nymex oil fell 1.1% to $52.7 a barrel while Brent dipped 91 cents to $56.42 a barrel.

For the week, US indices lost between 1.2%-1.7% while European markets were down 0.4%-1.6%.

                                                             

AT HOME

Benchmark indices broke out after five days of consolidation, gaining nearly a percent and half in today's trade to close at the highest level since 8th December. Sensex surged 380 points to settle at 27888 while Nifty finished at 8395, up 111 points. BSE mid-cap and small-cap indices gained 0.9% and 0.7% respectively. All the BSE sectoral indices ended in green with BSE Capital Goods index and Bankex leading the tally, putting on 1.7% each.

India's HSBC manufacturing PMI for December climbed to a two-year high of 54.5, up from 53.3 in November.

FIIs net bought stocks, index futures and stock futures worth Rs 260 cr, 452 cr and 200 cr respectively. DIIs were net buyers to the tune of Rs 70 cr.

Rupee appreciated 7 paise to end at 63.28/$.

For the week, Sensex and Nifty gained 2.4% each.

At the two day meet of public sector financial institutions called "Gyan Sangam", government stayed away from announcing any immediate major decision, either with respect to government control on banks, recapitalization or, importantly, consolidation but laid out a broad agenda for change.

Among the key commitments PSU banks made were to reorient strategies to enable small ones to focus on niche capabilities, implement steps to shore up talent, use technology in a greater way, strengthen risk management and work more closely with non-bank channels such as payment management systems or bank correspondents. At the same time, banks urged the government to provide them greater leeway by considering transferring its stake to an independent bank investment committee run by professionals, and in the long run look to reducing its stake below 51 percent – key recommendations of the PJ Nayak committee. Bank chiefs also stressed upon the need for greater freedom in hiring decisions, lesser scrutiny from vigilance agencies, stronger debt recovery laws and fewer interference from governments in the form of market-distorting debt waivers or interest rate caps.

OUTLOOK

Today morning barring a 1.5% higher Shanghai, other Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 20 points lower opening for our market.

On Friday, Nifty soared 111 points to end at 8395, decisively closing above the 8373 resistance, which was the 61.8% retracement level of the entire 8627-7961 fall. The benchmark has also regained the higher-top higher-bottom formation on the daily chart, turning the near term view decisively bullish.

8500, where the uppder band of bollinger on the daily chart is placed, would be the immediate target to eye above which 8627 would be the ultimate target for this upmove.

Immediate support on the hourly chart is placed around 8280, with the stop loss of which trading longs should be held on to.

BROADER MARKET CONTINUES TO PARTY WHILE NIFTY EXTENDS CONSOLIDATION

BROADER MARKET CONTINUES TO PARTY WHILE NIFTY EXTENDS CONSOLIDATION

WORLD MARKETS                             

Most of the world markets were shut yesterday for New Year's Day.

Data released yesterday showed that China's official purchasing managers' index (PMI) slipped to 50.1 in December from 50.3 in the previous month.

AT HOME

After falling nearly half a percent in the initial trade, benchmark recouped all the losses by the end of the trade to end almost flat. Sensex gained 8 points to settle at 27505 while Nifty finished at 8284, up 1 point. BSE mid-cap and small-cap indices gained 0.6% and 1.2% respectively. BSE Metal and Teck indices gained the most among the sectoral indices, rising 1.1% and 0.5% respectively while FMCG and Healthcare indices fell 0.3% and 0.1% respectively.

FIIs net bought stocks and stock futures worth Rs 18 cr and 20 cr respectively but net sold index futures worth Rs 29 cr. DIIs were net buyers to the tune of Rs 20cr.

Rupee tumbled 32 paise to end at 63.35/$.

Maruti Suzuki reported 20.8% y-o-y rise in December sales at 1.1 lac units. That of M & M fell 8.3% to 36328 units. Hero MotoCorp reported 0.2% rise at 5.26 lac units. TVS reported 20% jump at 1.92 lac units.

Government yesterday raised excise duty on petrol and diesel by Rs 2 per litre each. The third excise duty hike since November will help raise additional Rs. 6,000 crore during remaining three months of the current fiscal."Allocation of these resources to the roads sector will spur economic activity and employment generation in this sector,” said an official statement.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

For Nifty and Sensex it was yet another day of consolidation while broader market continued to party. Nifty and Sensex are up just about a percent this week while the CNX Small-cap index is up 4.4% and the mid-cap index is up 2.5%.

8373, the 61.8% retracement level of the entire 8627-7961 fall, continues to be important hurdle to eye while 8150-8115 continues to be the support area.

A two day retreat for PSU Banks, Public sector insurance companies and financial institution, named "Gyan Sangam", starts in Pune today to find out "what has gone wrong and what should be done both by banks as well as by the government to improve and consolidate the position of PSBs." At the retreat, there will be sessions by prominent experts, group discussions, sharing and demonstration of best practices and technologies. The retreat will end with presentation of a draft action plan to Prime Minister Narendra Modi on the second day.

India's HSBC Manufacturing PMI for December will be released today. In November the figure had risen to 53.3 from October's 51.6 reading.

INDIAN EQUITIES WRAP UP 2014 WITH BEST GAINS IN FIVE YEARS; DECEMBER AUTO SALES IN FOCUS TODAY

INDIAN EQUITIES WRAP UP 2014 WITH BEST GAINS IN FIVE YEARS; DECEMBER AUTO SALES IN FOCUS TODAY

WORLD MARKETS

After a positive start, US indices saw a sustained downward move through the session to end with cuts of 0.9%-1% on the last day of 2014.

Weekly initial jobless claims numbers came in a bit higher than expected at 298,000. The Chicago Purchasing Managers' Index for December came out at 58.3, below expectations. Pending home sales rose just 0.8% in November from a downwardly revised October reading.

Nymex crude fell 85 cents to $3.3 a barrel, down 46% for the year and the lowest since May 2009. Brent fell 44 cents to $57.5. Gold fell to settle at $1184, down 1.5% for the year.

In Europe, Germany and Spain were shut while FTSE and CAC gained 0.3% and 0.6% in the truncated session.

For 2014, Dow gained 7.5% while S & P 500 and Nadaq rose 11.4% and 13.4% respectively. In Europe, FTSE and CAC lost 2.7% and 0.5% respectively while DAX gained 2.6%. Argentina was the best performing market with 59% gain, followed by Shanghai Composite, up 53%. Russia was the worst performer with 45% dip, followed by 29% lower Greece.

                                                             

AT HOME

It was a positive end to the calendar 2014 as benchmark indices gained four tenth of a percent, extending the winning streak to fourth straight day. Sensex gained 96 points to settle at 27499 while Nifty finished at 8283, up 34 points. BSE mid-cap and small-cap indices soared 1.1% each. Except a 0.3% cut in BSE Auto index, all other sectoral indices ended higher with Power and Realty indices leading the tally, putting on 1% each.

FIIs net bought stocks and index futures worth Rs 481 cr and 131 cr respectively but net sold stock futures worth Rs 21 cr. DIIs were net sellers to the tune of Rs 31 cr.

Rupee appreciated 35 paise to end at 63.03/$.

For the calendar 2014, Sensex and Nifty gained 30% and 31.4% respectively, registering best yearly gain after 2009.

Data released yesterday showed that India's fiscal deficit for the April-November period stood at Rs. 5.25 trillion, 99% of the budget estimate of Rs 5.31 trillion for the fiscal. This was mainly on account of a slippage in revenue collections. While total revenue receipts were at 45.5% of budget estimates, total expenditure was at 60% of the budgeted amount.

The output of eight crucial industries grew by a five-month high of 6.7% in November, marginally higher than 6.3% in the previous month. The output had risen 3.2% in November last year.

OUTLOOK

Today most of the world equity markets are shut for New Year’s Day. SGX Nifty is suggesting about 10 points lower opening for our market.

It was yet another day of consolidation for Nifty within the broad 8373-8150 range. As we have been mentioning 8373 is the 61.8% retracement level of the entire 8627-7961 fall, a crossover of which will also confirm a higher-top higher-bottom formation on the daily chart, which is required to turn the near term view decisively bullish.

On the way down 8150-8115 continues to be the support area, where 8150 is the bottom made last week while 8115 is the 61.8% retracement level of the recent 7961-8365 pullback. A breach of this support zone can take the benchmark back to the 7961 bottom.

Till this range is taken out, one should adopt a stock-specific approach. Within this broad range, 8300 and 8200 would be immediate resistance and support levels respectively.

Auto companies will report their December sales figures starting today.

US markets will be closed today for New Year's Day.