NIFTY ON TRACK TO ACHIEVE 8627 TARGET

NIFTY ON TRACK TO ACHIEVE 8627 TARGET

WORLD MARKETS                             

US indices surged 1.1%-1.4% on Friday, breaking five day losing streak as energy stocks led gains with U.S. crude rising and as investors considered a mixed bag of economic reports.

Nymex oil rose $2.44 or 5.3% to $48.69 a barrel; Gold gained 0.9% to $1277 an ounce.

The University of Michigan's preliminary consumer sentiment index climbed to 98.2 from a final 93.6 December reading. The consumer-price index declined 0.4% in December, with the cost of living falling by the most in six years following a 0.3% fall the month before. A third report had factory production slowing in December, up 0.3% versus a 1.3% increase in output in November.

Goldman Sachs Group fell after the investment bank reported a 7% decline in quarterly profit.

European markets gained between 0.6%-2.2%. The Swiss National Bank's abandonment of its currency cap on the euro boosted risk sentiment in Europe ex-Switzerland, as it has added to hopes that the European Central Bank could announce more stimulus measures. On the data front, final euro area inflation data on Friday confirmed a month-on-month fall of 0.1% in December.

For the week, Dow fell 1.3%, S & P 500 declined 1.2% and Nasdaq gave away 1.5%. European markets however, except a modestly higher FTSE, climbed between 3%-6%.

AT HOME

After a lower opening, benchmark indices saw a gradual upmove through the session to end higher by a fifth of a percent. Sensex gained 46 points to settle at 28122 while Nifty finished at 8514, up 20 points. BSE mid-cap index gained 0.3% while the small-cap index ended flat. BSE Consumer Durable and Healthcare indices gained the most among the sectoral indices, rising 2% and 1.4% respectively while IT and Teck indices lost 0.2% and 0.1% respectively.

FIIs net bought stocks and stock futures worth Rs 1100 cr and 1206 cr respectively but net sold index futures worth Rs 848 cr. DIIs were net sellers to the tune of Rs 717 cr.

Rupee appreciated 19 paise to end at 61.87/$.

For the week, Sensex and Nifty gained 2.8% and 2.4% respectively.

Oil marketing companies on Friday cut petrol and diesel prices by Rs 2.42 and Rs 2.25 per litre respectively.

Meanwhile, the government raised the excise duty on petrol and diesel by Rs 2 a litre.

Reliance Industries on Friday reported 11.4% q-o-q dip in the standalone net profit at Rs 5085 cr for the December quarter which matched street expectations. Sales declined 17% to Rs 80196 cr. Gross refining margins dipped to $7.30 a barrel against 8.30 in the previous quarter. EBIDTA margin expanded by 50 bps.

Wipro reported better-than-estimated 1.3% rise in IT services revenue at USD 1.795 bn for the quarter ended December. Rupee revenue rose 3.9% to Rs 11344 cr. Net profit jumped 5% to Rs 2203 cr. Constant currency IT services revenue grew 3.7% q-o-q to USD 1.84 bn, which was higher compared to Infosys (2.6%) and TCS (2.5%). The company guided for a 1-3% growth in dollar revenue for the next quarter.

OUTLOOK

Today morning Shanghai is down more than 3%, led by brokerages after regulators took measures to rein in margin trading at three of the nation's biggest securities firms. HangSeng is down about half a percent. Other Asian markets are up between 0.5%-1% and SGX Nifty is suggesting about 50 points higher opening for our market.

In Friday's report we had mentioned that Nifty had broken out of the upper band of bollinger on the daily chart after a consolidation of a month and half. We had also mentioned that while 8627, the record high made in early December is the immediate target, the triangle breakout formation on the daily chart projects a target of about 9000, which can materialise over 6-8 weeks.

That continues to be the view. Immediate support on the hourly chart has moved up to 8380, with the stop loss of which trading longs should be held on to.

HUL will report its quarterly earnings today.

US markets will remain shut today for Martin Luther King Jr. day.

BSE CAPITAL GOODS INDEX SET TO SOAR

BSE CAPITAL GOODS INDEX SET TO SOAR (CMP:16200)

As shown in the chart below, BSE Capital Goods index, after touching a high of 21021 in 2007, plunged to 5394 in 2009 and was in a broad consolidation since then.

The consolidation took the shape of a symmetric triangle. The index broke out of this formation recently and is all set for a big upmove in the time to come. The formation projects the upside target of around 26700, which represents an upside of  65% from the current level and can materialise over next 2-3 years.

NIFTY CLIMBS THE MOST IN 9-MONTHS ON RBI SURPRISE; STAY LONG WITH THE STOP LOSS OF 8380

NIFTY CLIMBS THE MOST IN 9-MONTHS ON RBI SURPRISE; STAY LONG WITH THE STOP LOSS OF 8380

WORLD MARKETS

US indices fell between 0.6%-1.5%, extending the losing streak to fifth straight day, as large US banks reported disappointing results, oil resumed fall and Switzerland's central bank unexpectedly gave up its minimum exchange rate.

Bank of America dropped after the bank reported a 14% fall in quarterly profit; Citigroup also declined as it posted a slim fourth-quarter profit.

A measure of manufacturing in the New York region climbed to 9.95, above estimates. Other reports had wholesale prices falling 0.3% in December, and a larger-than-expected number filing for jobless benefits last week, up by 19,000 to 316,000.

Swiss National bank shocked markets by abandoning its currency cap against the euro. Swiss stocks fell by more than 10% at one point on the news, and the Swiss franc gained up to 30% against the euro. The appreciation of the franc will make Swiss exports much more expensive.

Nymex crude fell 4.6% or $2.23 to settle at $46.25 a barrel while Brent dropped nearly $1 to around $48. Gold climbed 2.5% to $1265 an ounce.

European markets climbed between 1.4%-2.4%.

                                                             

AT HOME

Delighted by the unexpected rate cut by the RBI, benchmark indices soared 2.6% each, registering the largest gain since 9th May 2014 and closing at the highest level since 5th December 2014. Sensex surged 729 point to settle at 28076 while Nifty finished at 8494, up 217 points. BSE mid-cap and small-cap indices gained 1.2% and 1% respectively. All the BSE sectoral indices ended in green with the Realty index and Bankex leading the tally, putting on 8% and 3.3% respectively.

In a surprise move RBI cut the repo rate by 25 bps and signaled it could cut further, amid signs of cooling inflation and what it said was a government commitment to contain the fiscal deficit.

FIIs net bought stocks and index futures worth Rs 1738 cr and 3897 cr respectively but net sold stock futures worth Rs 290 cr. DIIs were net sellers to the tune of Rs 527 cr.

Rupee appreciated 13 paise to end at 62.05/$, marking a two-month high.

India's trade deficit for December touched a 10-month low at $9.43 bn as against $16.8 bn in November. This was mainly on account of imports declining to $34.83 bn from $42.82 bn. Exports came in at $25.4 bn as against $26 bn.

TCS third quarter net profit grew 2.94% q-o-q to Rs 5444 cr, coming in slightly lower than expectations while revenue and operational performance was in line. Revenue rose 2.87% to Rs 24501 cr and dollar revenue increased half a percent to $3.9 bn.

OUTLOOK

Today morning Nikkei is down nearly 2% on the back of stronger Yen; other Asian markets, except a modestly higher Shanghai, are trading with cuts of 0.5%-1% and SGX Nifty is suggesting a flattish start for our market.

Ever since Nifty broke out of the 8300 hurdle on the hourly chart, we have been advising holding on to trading longs with a trailing stop loss.

In yesterday's session Nifty closed above 8446 where the previous top made on 5th January as well as the upper band of bollinger were placed, there by staging a breakout. While 8627, the record high made on 4th December would be the immediate target, the triangle breakout on the daily chart projects a target of about 9000, which can materialise over next 6-8 weeks.

On the way down, 8380, the bottom made yesterday, would be the immediate support, with the stop loss of which trading longs should be held on to.

Reliance Industries, Axis Bank and Wipro will report their quarterly earnings today.

US EQUITIES REBOUND ALONG WITH OIL; NIFTY HOLDS 8235 SUPPORT

US EQUITIES REBOUND ALONG WITH OIL; NIFTY HOLDS 8235 SUPPORT

WORLD MARKETS

After falling sharply in the first half on the back of disappointing retail sales and worries over global economic growth, US indices recovered nearly a percent from the bottom of the day as crude reversed higher and finally ended lower by 0.5%-1%, extending the losing streak to fourth day.

Retail sales fell 0.9% in December, marking the highest fall in a year.

JPMorgan Chase dropped after reporting a decline in fourth-quarter profit; Wells Fargo also fell after the mortgage lender posted results in line with expectations.

Copper prices hit a five-year-plus low after the World Bank lowered its global growth forecasts for 2015 and 2016 due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices.

Nymex crude jumped 5.6% to $48.5 a barrel, posting its biggest one-day percentage gain in more than two years. Brent crude rose $2.10 to settle at $46.4 a barrel.

European markets, weighed down by energy and mining stocks, plunged 1.2%-2.4%.

The European Court of Justice yesterday said that the Outright Monetary Transactions (OMT) bond-buying program—commonly seen as a predecessor to QE—was compatible with treaty provisions and was in line with European Union law, as long as certain conditions were met. The ruling from the court is a non-binding judgment but has added weight to the possibility of more stimulus in the euro zone.

                                                             

AT HOME

After a positive start, benchmark indices plunged nearly a percent from the top of the day but recouped some of the losses in the noon trade to finally end lower by three tenth of a percent, extending the losing streak to second day. BSE Metal index nosedived 3.5%, becoming top loser among the sectoral indices, followed by a 0.9% cut in the Healthcare index. IT and Teck indices gained 1.1% and 0.8% respectively.

FIIs net sold stocks and stock futures worth Rs 70 cr and 244 cr respectively but net bought index futures worth Rs 178 cr. DIIs were net sellers to the tune of Rs 224 cr.

Rupee depreciated 4 paise to end at 62.18/$.

WPI for December rose marginally to 0.11% from zero in November but was below the expected 0.3% mark. Core WPI, or non-food manufacturing inflation, eased to 1.5%, an indication of subdued demand pressure. The inflation number for October was revised downwards to 1.66% from 1.77%.

OUTLOOK

Today morning, Nikkei is up nearly a percent and half, other Asian markets are trading with modest gains but SGX Nifty is suggesting about 20 points lower opening for our market.

Nifty continues to be in a broad consolidation after hitting a record high of 8627 in early December. The consolidation is taking a form of a triangle with the benchmark making lower tops and higher bottoms on the daily chart. 8446 and 8065, the top and bottom made last week, are the important resistance and support levels to eye from a larger perspective.

In yesterday's report we had mentioned that the immediate support on the hourly chart is placed at 8235 with the stop loss of which trading longs should be held on to. The benchmark, after touching a low of 8237, bounced back to end at 8278.

8235 continues to be immediate support a sustained trading below which would confirm a sell on the hourly chart and can take benchmark in the vicinity of the 8065, the lower level of the 8446-8065 range mentioned above. On the way up 8357, the top made on Tuesday, is the immediate resistance, above which 8446 would be the major hurdle to eye.

TCS and Bajaj Auto will report their quarterly earnings today.

NIFTY BREAKS 3-DAY WINNING STREAK; IMMEDIATE SUPPORT AT 8235

NIFTY BREAKS 3-DAY WINNING STREAK; IMMEDIATE SUPPORT AT 8235

WORLD MARKETS

After rising nearly a percent and half in the initial trade, benchmark indices saw a sustained downward move through rest of the session to end lower by 0.1%-0.3% as materials and energy shares fell on lower commodity prices.

Rumors that Germany can block further quantitative easing by the ECB also dented the sentiment.

Brent crude tumbled 2% or 84 cents to $46.59/barrel while Nymex oil settled down 18 cents at $45.89.

European markets gained between 0.6%-2% with a surge in retail stocks helping to boost investor sentiment. The rate of inflation in the U.K. fell to 0.5% in December, the lowest in 14 years.

AT HOME

After trading in the positive territory for better part of the day, benchmark indices nosedived in last hour or so to end with cuts of 0.6% and 0.3% for Sensex and Nifty respectively, also breaking the three-day winning streak. Sensex lost 160 points to settle at 27426 while Nifty finished at 8299, down 24 points. BSE mid-cap index gained 0.1% while the small-cap index lost 0.4%. Except a 0.7% and 0.1% rise in BSE FMCG and Healthcare indices, all other sectoral indices ended in red with Realty and Consumer Durable indices leading the tally, giving away 1.8% and 1.2% respectively.

FIIs net bought stocks and index futures worth Rs 235 cr and 441 cr respectively but net sold stock futures worth Rs 12 cr. DIIs were net buyers to the tune of Rs 46 cr.

Rupee appreciated 2 paise to end at 62.14/$.

Indusind Bank met street expectations by reporting 28.8% rise in profit at Rs 447 cr for the quarter ended December 2014 supported by higher other income and net interest income and lower provisions. NII grew 18% to Rs 861.4 cr and other income jumped 27% to Rs 610.7 cr. Gross NPAs improved to 1.05% from 1.08% q-o-q and Net NPAs stood at 0.32%, down from 0.33%.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 15 points higher opening for our market.

Yesterday, Nifty, after touching a high of 8357, plunged in last hour to end at 8299. A gap, created by the gap down opening on last Tuesday was placed at 8364-8328, which acted as a resistance for the benchmark.

Immediate support on the hourly chart has moved up to 8235 with the stop loss of which trading longs can be held on to. 8357, the top made yesterday, would be the immediate resistance above which 8446, the top made last week would be the next big hurdle.

India's wholesale price inflation for December would be released today and is expected to inch up to 0.3% from 0% in November.

Yes Bank and LIC Housing will report their quarterly earnings today.

OIL TANK S TO NEAR SIX-YEAR LOW; NIFTY TAKES OUT 8300 HURDLE

OIL TANK S TO NEAR SIX-YEAR LOW; NIFTY TAKES OUT 8300 HURDLE

WORLD MARKETS

US indices lost between 0.5%-0.8% as oil plunged to near six-year low.

Nymex oil plunged nearly 5% or $2.29 to $46.07, its lowest level since April 2009 after Goldman Sachs slashed its short-term price forecasts and Gulf producers showed no sign of curbing output. Brent plunged nearly 6% to $47.24.

European markets, except a flat FTSE, gained between 0.8%-1.4% as speculation on further stimulus from the ECB boosted sentiment. News reports suggested that ECB is planning to design a sovereign debt purchase program based on the paid-in capital contributions made by euro zone central banks.

US aluminum producer Alcoa came out with better-than-estimated earnings and revenue after the close of the US markets, marking the unofficial start to the earnings season.

                                                             

AT HOME

After trading in a narrow range for better part of the day, benchmark indices spiked up in last hour of trade to end with gains of half a percent, extending the winning streak to third straight day. Sensex rose 127 points to settle at 27585 while Nifty finished at 8323, up 38 points. BSE mid-cap and small-cap indices gained 0.6% and 0.8% respectively. BSE Capital Goods and FMCG indices gained the most among the sectoral indices, rising 1.6% and 1.4% respectively while Metal and Oil & Gas indices lost 1.7% and 1.2% respectively, becoming top losers.

FIIs net bought stocks worth Rs 245 cr but net sold index futures and stock futures worth Rs 245 cr and 197 cr respectively. DIIs were net sellers to the tune of Rs 331 cr.

Rupee appreciated 16 paise to end at 1-month high of 62.16/$.

India's IIP grew 3.8% in November after shrinking 4.2% in October. Inflation based on the Consumer Price Index rose 5% in December, compared with 4.38% in November. Both were better than the estimates of about 2.2% and 5.2% respectively. Core CPI stood at 5.2%, down from 5.5% in the previous month. Within IIP, while production of basic goods (7%), capital goods (6.5%) and intermediate goods (4.3%) expanded, output of consumer goods shrank by 2.2% due to a sharp contraction in consumer durables (14.5%).

OUTLOOK

China's December exports have shown a growth of 9.9%, beating the estimate of 6.8% uptick. Imports have contracted 2.3%, better than the estimated 7.4% fall. Trade surplus is at $49.1 bn as against $54.5 bn in November and estimate of $49.85 bn.

Nikkei is down nearly 2%, other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher opening for our market.

Nifty yesterday gained 38 points to end at 8323, taking out the 8300 hurdle on closing basis. 8300 was the 61.8% retracement level of the recent 8446-8065 fall, a crossover of which has paved the way for the retest of the 8446 top. Now 8446 is also where the upper band of bollinger on the daily chart is placed, which makes it an important hurdle to eye, a crossover of which is required to put the bulls in the dominating positions.

Meanwhile traders can hold on to long positions with the stop loss of 8215, which is the immediate support on the hourly chart.

Indusind Bank and DCB will report their quarterly earnings today.

NIFTY RETREATS FROM 8300 AS EXPECTED; CPI, IIP IN FOCUS

NIFTY RETREATS FROM 8300 AS EXPECTED; CPI, IIP IN FOCUS

WORLD MARKETS                             

US indices lost between 0.7%-1% on Friday after December nonfarm payrolls report gave a mixed view of the economy.

The report showed an addition of 252000 jobs after generating an unexpectedly strong 353000 jobs in November. The unemployment rate dropped to 5.6%. What spooked the market was a decline in hourly earnings which fell by 5 cents an hour.

Dollar index slipped to 91.846, off a nine-year peak of 92.528 scaled last week. Nymex oil fell 43 cents to $48.36 a barrel while Brent dropped 85 cents to $50.11.

European markets plunged between 1%-4% with Spain and Italy leading the tally. Apart from weakness in US equities, shares were also weighed down by massacre at the office of satirical magazine "Charlie Hebdo" in Paris.

For the week, US indices lost about half a percent.  In Europe, Spain and Italy plunged 6% and 5% respectively while FTSE, CAC and DAX were down between 0.7%-1.7%.

AT HOME

After a gap up opening, benchmark indices plunged nearly a percent and third from the top of the day, but recouped most of the losses in the noon trade to end higher by about six tenth of a percent. Sensex gained 184 points to settle at 27458 while finished at 8285, up 50 points. BSE mid-cap and small-cap indices gained 0.1% each. BSE IT and Tech indices climbed 3.5% and 2.5% respectively, becoming top gainers among the sectoral indices while Power and Capital Goods indices lost 0.9% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 298 cr and 62 cr respectively but net bought stock futures worth Rs 574 cr. DIIs were net buyers to the tune of Rs 300 cr.

Rupee appreciated 35 paise to end at 4-week high at 62.32/$.

Infosys earnings beat street estimates with net profit rising 5% sequentially to Rs 3250 cr and revenues increasing 3.4% to Rs 13796 cr. Dollar revenues rose 0.8% to USD 2.218 bn. The company maintained its FY15 dollar revenue growth guidance of 7-9%, ending speculation that it would lower forecast. The company's volumes grew 4.2% q-o-q, the highest in 3 years.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points lower opening for our market.

In Friday's report we had mentioned that 8300, the 61.8% retracement level of the recent 8446-8065 fall, would be the important immediate hurdle to eye and had therefore advised booking profits in trading longs around 8300.

The benchmark after touching a high of 8303 in the initial trade, plunged all the way to 8190, before recovering to end at 8284.

8300 continues to be the immediate hurdle a crossover of which would generate a buy on the hourly chart and would pave the way for the further upside till about 8446, the top made last week. On the way down 8190, the bottom made on Friday, would be the immediate support.

Traders are advised to wait for the crossover of 8300 for taking fresh longs.

India's Consumer price index for December would be released today and is expected to show retail inflation accelerated to 5.2% from 4.4% in November. Core CPI is expected at 5.3%. Industrial output and trade data for November would also be released today. IIP is estimated to show a growth of 2.2% as against a contraction of 4.2% in the previous month.