NIFTY ACHIEVES 7850 TARGET

NIFTY ACHIEVES 7850 TARGET

WORLD MARKETS                             

US indices plunged 1.3%-1.5%, breaking three-day winning streak, as energy stocks tumbled on the back of falling oil. Material stocks were pressured by lower commodities on account of strong dollar.

Nymex oil fell 57 cents, or 1.6%, to $34.95 a barrel, its lowest since February 2009. Brent settled about 0.9% lower at $37.06 a barrel, its lowest in nearly seven years. Natural gas ended 2% percent lower at $1.755, its lowest since March 1999.

The U.S. current account deficit in the third quarter increased 11.7% to $124.1 billion, its highest level in nearly seven years, as a strong dollar weighed on exports and the profits of multinational corporations. The Philly Fed index for December was minus 5.9, the lowest of the year after a positive 1.9 print in November. Leading indicators for November showed a 0.4% rise, with October unrevised, up 0.6%. Initial jobless claims came in at 271,000.

Dollar index climbed 1.3%. Gold tumbled $27 to $1050 an ounce.

European markets gained 0.7%-2.6% with DAX leading the tally.

AT HOME

Benchmark indices soared a percent and fifth yesterday, extending the winning streak to fourth straight day and closing at the highest level since 3rd December. Sensex settled at 25804, up 309 points while Nifty rose 93 points to finish at 7844. BSE mid-cap and small-cap indices climbed 1.6% and 1.7% respectively. All the BSE sectoral indices ended in green with Metal and Basic Material indices leading the tally, up 2.5% and 2.1% respectively.

FIIs net bought stocks and stock futures worth Rs 638 cr and 25 cr respectively but net sold index futures worth Rs 526 cr. DIIs were net sellers to the tune of Rs 366 cr.

Rupee appreciated 31 paise to end at 66.42/$.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-0.8% and SGX Nifty is suggesting about 50 points lower opening for our market.

Readers would recall that ever since Nifty broke immediate hurdle of 7700, we had set a target of 7815-7850 where 7815 was the 61.8% retracement level of the recent 7980-7550 fall and 7850 was the 34-DMA.

The benchmark yesterday touched a high of 7853, achieving the above mentioned target and vindicating our view.

7850 continues to be important immediate hurdle, a crossover of which is required for the further upmove.  7980, the top made in early December, would be the next target if that happens.

Immediate support on the hourly chart has moved up to 7690, a breach of which will generate a sell on the hourly chart and can take Nifty back to 7540 bottom.

Traders are advised to wait for the crossover of 7850 for creating fresh longs. Existing longs can be held with the stop loss of 7690.

A “DOVISH” HIKE IT IS

A “DOVISH” HIKE IT IS

WORLD MARKETS                             

US indices ended with gains of 1.3%-1.5% yesterday after the Federal Reserve raised rates for the first time in nearly a decade.

As was widely expected, the U.S. central bank raised its target funds rate by a quarter point to a range of 0.25% to 0.5%. Fed Chair Janet Yellen said in a press conference that policy would remain accommodative and that the significance of the first hike should not be overblown.

Treasury yields rose, with the 2-year yield crossing 1% for the first time since 2010. The 10-year yield hit a high of 2.33%, its highest since Dec. 4. Dollar index gained about 0.2%. Gold rose $15 to $1077 an ounce.

Nymex oil fell $1.83 or 5% to $35.52 a barrel, after weekly EIA crude inventories showed a rise of 4.8 million barrels.

US Industrial output slipped 0.6% in November after a downwardly revised 0.4% dip in October. December Flash Manufacturing PMI fell to 51.3, the weakest improvement in manufacturing sector business conditions in three years. Housing starts rose 10.5% in November, while building permits rose 11%. Mortgage refinances rose 1% on rate fears.

European markets, except a modestly lower Italy, ended flat to modestly higher.

AT HOME

After a positive start, benchmark indices added some more gains through the session to end higher by about seven tenth of a percent, extending the winning streak to third straight day. Sensex settled at 25494, up 174 points while Nifty rose 50 points to finish at 7751. BSE mid-cap and small-cap indices gained 0.4% and 0.2% respectively. BSE Telecom and Oil & Gas indices gained the most among the sectoral indices, rising 2.4% and 1.7% respectively while FMCG and Consumer Durable indices lost 0.6% each.

FIIs net sold stocks worth Rs 503 cr but net bought index futures and stock futures worth Rs 92 cr and 537 cr respectively. DIIs were net buyers to the tune of Rs 1024 cr.

Rupee appreciated 19 paise to end at 66.73/$.

M & M plunged 5.3% after the Supreme Court imposed a ban on registration of diesel cars with over 2000 cc engine in Delhi till March 31, 2016.

The government yesterday raised excise duty on petrol by Rs. 0.30 a litre and on diesel by a steep by Rs. 1.17 a litre. Since November 2014, the government has raised excise duty on petrol by Rs 9.65 a litre and on diesel by Rs 7.97 a litre in six instalments.

OUTLOOK

Today morning Nikkei is up 2%, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting about 15 points higher opening for our market.

We had advised initiating trading longs after Nifty crossed immediate hurdle of 7700 for the target of 7815, which is the 61.8% retracement level of the recent 7979-7551 fall. Above 7815, 34-DMA, placed around 7850, would be the next hurdle to eye.

This makes 7815-7850 the immediate target area.

7650 continues to be immediate support on the hourly chart, with the stop loss of which trading longs should be held on to.

ALL EYES ON FED

ALL EYES ON FED

WORLD MARKETS                             

US indices gained nearly a percent yesterday ahead of the important Fed decision. Energy and financials led the gainers.

Nymex oil rose for the second-straight day, up $1.04 or 2.9% to $37.35 a barrel.

November Consumer Price Index (CPI) came in unchanged, while ex-food and energy the figure rose 0.2%. In the 12 months through November, the core CPI rose 2% percent, which analysts noted matched the Fed's target for the first time since May 2014. Empire Manufacturing index for December showed minus 4.6, compared with November's minus 10.7 print. The NAHB housing market index missed expectations for a slight gain with a one-point decline to 61.

Dollar index rose about 0.6%. Treasury yields rose, with the 2-year yield at 0.97% and the 10-year yield near 2.27%.

European markets soared 2.4%-3.7%. Auto stocks jumped after data showed that Europe saw a 13.7% increase in new car registrations in November, the 27th month of consecutive growth.

AT HOME

After a rangebound morning trade, benchmark indices spiked up in the noon trade to end with gains of seven tenth of a percent, extending the winning streak to second straight day. Sensex settled at 25320, up 170 points while Nifty rose 51 points to finish at 7701. BSE mid-cap and small-cap indices gained 0.6% and 0.7% respectively. BSE Consumer Durable and Auto indices were the top gainers among the sectoral indices, rising 1.5% and 1.3% respectively while Metal and Telecom indices lost 0.2% each.

FIIs net bought stocks and stock futures worth Rs 49 cr and 3 cr respectively but net sold index futures worth Rs 438 cr. DIIs were net buyers to the tune of Rs 274 cr.

Rupee appreciated 17 paise to end at 66.92/$.

India's exports fell for the twelfth consecutive month in November by contracting 24% to $20 bn. Imports too fell 30% to $30 bn.

Oil Marketing Companies cut Petrol and Diesel prices by 50 paise and 46 paise respectively.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.8% and SGX Nifty is suggesting about 30 points higher opening for our market.

In yesterday's report we had mentioned that "7700, the erstwhile support, would now act as the immediate hurdle, a crossover of which is required to generate a buy on the hourly chart, upon happening of which further upside till about 7815, which is the 61.8% retracement level of the recent 7979-7551 fall can materialise".

The benchmark yesterday touched a high of 7705 before closing at 7701 and is set to open higher today.

As mentioned above, 7815 is the next upside target to eye. Immediate support on the hourly chart is placed around 7645, with the stop loss of which trading longs can be initiated. Take the “options” route keeping in mind the important Fed decision.

US Fed, in its much anticipated decision, is widely expected to raise the fed funds rate by a quarter point today, while emphasizing that the pace of tightening will be gradual. A hike would be the first since June 2006.

NIFTY REBOUNDS AFTER NEARLY ACHIEVING 7540 TARGET

NIFTY REBOUNDS AFTER NEARLY ACHIEVING 7540 TARGET

WORLD MARKETS                             

US indices gained 0.4%-0.6% yesterday as oil stabilised.

Nymex oil rose 69 cents or 1.94% to $36.31 a barrel, pausing a six-day losing streak that took crude to its lowest in nearly seven years. Natural gas pared losses to hold about 4.8% lower after hitting a low of $1.86, its lowest in nearly 14 years.

European markets tumbled 1.3%-2.4%. Speaking in Bologna, Italy, ECB President Draghi reiterated his call that the bank stood ready to act and once again added that governments of the 18 countries that use the euro should also be playing their part.

Earlier Shanghai Composite gained about 2.5% after some encouraging reports on Chinese industrial production, retail sales and fixed asset investment.

Gold fell $12.30 at $1063.40 an ounce.

AT HOME

After falling nearly three fourth of a percent in the initial trade, benchmark indices spiked up a percent and quarter from the bottom of the day to end higher by about half a percent. Sensex settled at 25150, up 106 points while Nifty rose 40 points to finish at 7650. BSE mid-cap and small-cap indices gained 0.7% and 0.4% respectively. BSE Metal and Basic Material indices climbed 2.4% and 1.6% respectively, becoming top gainers among the sectoral indices while Realty and Capital Goods indices lost 0.2% each.

FIIs net sold stocks worth Rs 157 cr but net bought index futures and stock futures worth Rs 165 cr and 124 cr respectively. DIIs were net buyers to the tune of Rs 386 cr.

FIIs net sold stocks worth Rs 157 cr but net bought index futures and stock futures worth Rs 165 cr and 124 cr respectively. DIIs were net buyers to the tune of Rs 386 cr.

Rupee tumbled 21 paise to end at 67.09/$.

Consumer Price Inflation spiked to a 14-month high of 5.41% in November from 5% in October, led by sharp rise in food price inflation.

OUTLOOK

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

Just to reiterate, we had initiated "short" recommendation on Nifty when 7880 was breached on 3rd December. While 7700 was our initial target we were quite sure that retest of 7540, the bottom made in September, is on the cards.

The benchmark touched a low of 7551 yesterday, nearly achieving the 7540 target mentioned above and vindicating our negative stance. The benchmark rebounded smartly to end at 7650.

7700, the erstwhile support, would now act as the immediate hurdle, a crossover of which is required to generate a buy on the hourly chart, upon happening of which further upside till about 7815, which is the 61.8% retracement level of the recent 7979-7551 fall can materialise.

On the way down, 7540 continues to be important support, upon breach of which 7300, in the vicinity of which 34-month average as well as the lower band of monthly bollinger are placed, would be the major support to eye.

OIL-TUMBLES TO NEAR SEVEN-YEAR LOW; NIFTY ON TRACK TO ACHIEVE 7540

OIL-TUMBLES TO NEAR SEVEN-YEAR LOW; NIFTY ON TRACK TO ACHIEVE 7540

WORLD MARKETS                             

US indices nosedived 1.8%-2.2% on Friday as oil hit near-seven-year lows and news of a roughly $800 million junk bond fund preventing withdrawals weighed on the sentiment. Caution ahead of Fed's highly anticipated decision on rates this week also played its role.

Nymex oil settled down $1.14 or 3.10% at $35.62 a barrel, its lowest since February 2009 after the International Energy Agency (IEA) warned global oversupply could worsen in the new year.

U.S. chemical giants DuPont and Dow Chemical officially agreed to merge in an all-stock deal to form a combined company valued at $130 billion.

November retail sales rose 0.2%, slightly missing expectations on the headline number. Taking out autos, gasoline, building materials and food services, retail sales increased 0.6% after an unrevised 0.2% gain in October. Producer price index advanced 0.3% in November after falling 0.4% in October.

European markets tumbled 1.5%-2.4% with DAX leading the tally.

Earlier, China's yuan sank to a four-and-a-half-year low after the PBoC set the midpoint rate for the currency down further, stoking expectations of further weakness in the currency.

For the week, US indices fell 3.3%-4.1% and European markets lost 3.5%-4.6%. Nymex oil sank 11%.

AT HOME

Thursday's recovery proved short-lived as Sesnex and Nifty nosedived 0.8% and 1% respectively on Friday to end at the lowest level since 7th September. Sensex settled at 25044, down 208 points while Nifty lost 73 points to finish at 7610. BSE mid-cap and small-cap indices lost 1.2% and 0.8% respectively. Except a 0.1% rise in BSE IT index, all the sectoral indices ended in red with Realty index and Bankex leading the tally, down 2.5% and 2.2% respectively.

FIIs net bought stocks and stock futures worth Rs 254 cr and 223 cr respectively but net sold index futures worth Rs 921 cr. DIIs were net buyers to the tune of Rs 293 cr.

Rupee depreciated 17 paise to end at 66.88/$.

IIP for October hit a 5-year high at 9.8% as against 3.6% in September.

For the week, Sensex and Nifty lost 2.3% and 2.2% respectively, extending the losing streak to second straight week.

OUTLOOK

Data released over the weekend showed China's factory output grew and annual 6.2% in November, up from October's 5.6% and beating expectations of 5.6%. Growth in China's fixed-asset investment, one of the main drivers of the economy, rose 10.2% in the first 11 months, unchanged from the gain in January-October, and higher than an expected 10.1% rise. Retail sales grew an annual 11.2% in November - the strongest expansion this year - compared with 11% percent in October.

Today morning Asian markets are trading with cuts of 0.6%-2.7% with Nikkei leading the losses and SGX Nifty is suggesting about 40 points lower opening for our market.

Despite Thursday's smart rebound, in Friday's report we had maintained our negative stance and had reiterated the downside target of 7540. The benchmark plunged 73 points on Friday and is set to open further lower today, vindicating our negative view.

7540 continues to be the downside target to eye below which next major support to eye would be 7300, in the vicinity of which 34-month average as well as the lower band of bollinger on the monthly chart is placed.

Immediate resistance on the hourly chart has moved to 7690, with the stop loss of which short positions should be held on to.

CPI for November would be released today and is expected to come in at 5.38% as against previous month's 5%. Core CPI is expected at 4.62%, up from 4.41%. November WPI too would be out today and is expected to sow a print of -2.6%, improving from previous month's -3.81%. Core WPI is expected at -2.38% as against last month's -2.9%.

7730-7750 IS THE IMMEDIATE RESISTANCE AREA

7730-7750 IS THE IMMEDIATE RESISTANCE AREA

WORLD MARKETS                             

US indices gained 0.2%-0.5% yesterday, shrugging-off pressure from further decline in oil prices as beaten-down sectors such as energy rebounded.

Nymex oil fell 40 cents or 1.1% to $36.76 a barrel after OPEC said its November production reached a 2009 high. OPEC published its latest monthly oil market report on yesterday, in which its forecast said that the supply of oil from countries outside of the OPEC will contract next year as world oil demand rises.

Weekly jobless claims rose to 282000, coming in higher than the expected 269000. Import prices fell 0.4% in November, as oil prices weighed.

Dollar index rose about half a percent with the euro holding above $1.09. Gold fell $4.50 to $1072 an ounce.

European markets, except a marginally higher DAX, lost upto 0.6%.

AT HOME

Benchmark indices soared nine tenth of a percent yesterday, breaking six-day losing streak. Sensex settled at 25252, up 216 points while Nifty rose 71 points to end at 7683. BSE mid-cap and small-cap indices gained 0.9% and 1.2% respectively. All the BSE sectoral indices ended in green with Energy and Oil & Gas indices leading the tally, up 2.4% and 1.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 580 cr, 120 cr and 203 cr respectively. DIIs were net buyers to the tune of Rs 411 cr.

Rupee appreciated 12 paise to end at 66.71/$.

OUTLOOK

Today morning, Nikkei is up nearly a percent but Shanghai and Hang Seng are down nearly half a percent. SGX Nifty is suggesting a marginally lower start for our market.

Yesterday, after touching a low of 7610 in the morning trade, Nifty rebounded smartly to end at 7683.

The trend however continues to be negative. The region in the vicinity of 7730, which was earlier acting as a support, would now act as the immediate hurdle. 7750 is where the 38.2% retracement level of the recent 7979-7606 fall is placed. This makes 7730-7750 immediate resistance area, a sustained trading above which is required for the further upmove.

On the way down, 7540 continues to be the downside target to eye.

IIP for October would be released today. The expected range for the figure is as wide as 4.5%-10.8%. In September, IIP growth stood at 3.6%.

NIFTY ON TRACK TO ACHIEVE 7540 TARGET; TRAIL STOP LOSS TO 7770

NIFTY ON TRACK TO ACHIEVE 7540 TARGET; TRAIL STOP LOSS TO 7770

WORLD MARKETS                             

Dow and S & P 500 fell 0.4% and 0.8% respectively while Nasdaq tumbled 1.5% yesterday as oil turned negative and tech stocks lagged.

Dow in fact saw triple digit gain at the open on the back of news of a potential merger between Dow Chemical and DuPont, which jumped nearly 12% for its best day over.

The reversal happened after the oil reversed initial gains. The initial rise was on the back of US Energy Information Administration report which showed crude inventories in the country fell by 3.6 million barrels, for the first time after a 10-week stockpile build-up. Nymex oil finally settled down 35 cents or 0.9% at $37.16 a barrel while brent oil fell 6 cents to $40.20 a barrel.

Apple fell more than 2% and biotech stocks declined, putting added pressure on Nasdaq.

The euro climbed above $1.10 while dollar index fell more than a percent to around 97.40.

European markets fell upto a percent.

AT HOME

Benchmark indices nosedived 1.1% yesterday, extending the losing streak to sixth straight day and closing at the lowest level since 7th September. Sensex settled at 25036, down 274 points while Nifty lost 89 points to finish at 7612. BSE mid-cap and small-cap indices lost 1.8% and 2.2% respectively. All the BSE sectoral indices ended in red with Metal and Basic Materials indices leading the tally, down 3.1% and 2.7% respectively.

FIIs net sold stocks and index futures worth Rs 527 cr and 123 cr respectively but net bought stock futures worth Rs 81 cr. DIIs were net buyers to the tune of Rs 865 cr.

Rupee ended unchanged at 66.83/$.

The Union Cabinet yesterday approved the Real Estate (Regulation & Development) Bill, 2015. The Bill will now be taken up for consideration and passing by the Parliament. In a statement the government said the Bill will provide uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector.

Also approved was Rs. 4,000-crore package to spur India’s ship building industry, combined with a slew of incentives which include the right of first refusal on all government purchases for Indian shipyards, tax incentives and the ‘infrastructure’ status for shipbuilding and ship repair industry that would help them tap easier financing.

The government also approved mandatory use of jute packaging material for foodgrains and sugar, a move which will provide relief to 3.7 lakh jute mill workers.

OUTLOOK

Today morning, barring a modestly higher Shanghai, other Asian markets are trading with cuts of upto a percent, and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report titled "7700 achieved, 7540 next" we had clearly mentioned that the technical setup  continues to be weak and 7540 continues to be the next downside target to eye.

The benchmark plunged 89 points to end at 7612, coming closer to 7540 target.

7540, the bottom made in early September, continues to be the next downside target to eye.

Immediate resistance on the hourly chart has moved lower to 7770, with the stop loss of which short positions should be held on to.