NIFTY ACHIEVES 8250 TARGET; STAY LONG WITH THE STOP-LOSS OF 8150

NIFTY ACHIEVES 8250 TARGET; STAY LONG WITH THE STOP-LOSS OF 8150

WORLD MARKETS                             

US indices added 0.2%-0.4% yesterday, with the three major indexes, along with the small-caps Russell 2000 and the S&P Mid Cap 400, all closed at record levels.

The European Central Bank (ECB) surprised markets by announcing it would reduce the pace of its massive bond-buying program from April 2017. The ECB currently purchases assets worth 80 billion euros ($86 billion) a month, a program that is due to end in March 2017. While the central bank is set to extend that program until at least December next year, it would purchase assets worth 60 billion euros monthly from April.

In a news conference, ECB President Mario Draghi said "uncertainty prevails everywhere," but added the risk of deflation has largely disappeared. He added that growth in the euro zone jumped 0.3% in the third quarter of this year and that the economy should continue growing in the final quarter of the year. He added that headline inflation should pick up to 1.3% in 2017 from 0.2% in 2016.

The euro whipsawed following the ECB's announcement, trading just below $1.09 against the dollar before falling around 1.4% to $1.061. Dollar index rose 0.9% to 101.10. Gold fell $5 to $1172 per ounce.

European sovereign bond yields spiked, with the 10-year German bund yielding 0.372%, while the Italian 10-year yield rose to 1.999%. U.S. Treasurys also fell, with the benchmark 10-year yield rising to 2.3944%.

US crude rose 2.2% to $50.84 whille Brent added 1.7% to $53.89 ahead of another meeting among oil producers in Vienna on Saturday. OPEC Secretary said non-OPEC producers needed to cut about 600,000 barrels a day to complement OPEC's agreed 1.2 million barrels a day cut in order to tackle the global supply glut.

US weekly jobless claims matched expectations at 258,000.

European markets gained 0.4%-2%. Banking stocks jumped more than 2% following the ECB announcement and closed among the best performers with all other sectors also closing in positive territory.

Earlier data showed China's November dollar-denominated imports grew 6.7%, the fastest pace of annualized growth since September 2013, while exports were up 0.1% in dollar terms. Both were expected to fall 5% and 6.2% respectively

AT HOME

After a gap up opening, benchmark indices kept on moving higher through the session to end with mammoth gains of little less than two percent and closing at the highest level since 11th November. Sensex soared 457 points to settle at 26694 while Nifty finished at 8247, up 145 points. BSE mid-cap and small-cap indices added 1.5% and 1.3% respectively. All the BSE sectoral indices closed in green with Metal and Auto indices leading the tally, up 2.9% and 2.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 699 cr, 1441 cr and 211 cr respectively. DIIs were net buyers to the tune of Rs 64 cr.

Rupee appreciated 28 paise to end at 67.35/$.

OUTLOOK

Today morning, except a 0.7% higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 30 points higher start for our market.

In yesterday's report we had said that 8290, the top made before the monetary policy announcement on Wednesday, is the immediate hurdle above which 8250, the top made last week, would be the next target.

The benchmark crossed 8290 hurdle in the first hour itself and surged all the way to 8256, achieving the target mentioned above.

8340, the 61.8% retracement level of the 8600-7916 fall is the next target to eye on the way up. Immediate support on the hourly chart is placed at 8150, with the stop-loss of which, trading longs should be held on to.