NIFTY ACHIEVES 8180 TARGET; 8275 NEXT

NIFTY ACHIEVES 8180 TARGET; 8275 NEXT

WORLD MARKETS                             

US indices ended with cuts of 0.3%-0.9% on the last day of the calendar 2016, extending the losing streak to third straight day.

The Chicago Purchasing Manager's Index for December came in at 54.6, lower than consensus forecasts of 56.8 and lower than November's 57.6 read.

WTI oil fell 5 cents to $53.72.

Dollar index touched a low of 101.91 before recovering to close at 102.38, down 0.3% from previous close and marking a two-week low. Treasuries gained with 10-year yield at 2.446% and 2-year yield at 1.198%

European markets gained 0.2%-0.5%.

For the week, US indices fell 0.9%-1.5%. For the Dow, this was the first negative week since before the election. European markets managed to eke out gains of 0.3%-1.1%. Asia was mixed. Nikkei lost 1.6%, marking the first weekly loss after a steep seven-week upmove. Shanghai was down 0.2% but Hang Seng climbed 2%.

For the year Dow gained 13.7%, S & P 500 rose 10% and Nasdaq was up 8.5%. In Europe, FTSE soared 14% while DAX and CAC added 7% and 4.3% respectively. In Asia Shanghai lost 2% while Hang Seng and Nikkei were up 0.4% each.

WTI oil soared 45% for its best year since 2009.

China's official purchasing managers' index (PMI), which gauges conditions at factories and mines, came in at 51.4 in December, down from 51.7 the previous month which marked its fastest growth for two years.

AT HOME

It was a cheerful end to 2016 as benchmark indices climbed 1% today, extending the winning streak to fourth straight day. Sensex soared 260 points to settle at 26626 while Nifty added 82 points to finish at 8186. BSE mid-cap and small-cap indices gained 1.1% and 0.8% respectively. All the BSE sectoral indices ended in green with FMCG and Utilities indices leading the tally, up 1.7% and 1.4% respectively.

FIIs net sold stocks and index futures worth Rs 586 cr and 753 cr respectively but net bought stock futures worth Rs 820 cr. DIIs were net buyers to the tune of Rs 725 cr.

Rupee appreciated 18 paise to end at 67.92/$.

For the week, Sensex and Nifty gained 2.2% and 2.5% respectively, registering the biggest weekly gain in 3-months.

For calendar 2016, Sensex and Nifty gained 1.9% and 3% respectively.

India's fiscal deficit during first eight months to November stood at Rs 4.58 trillion or 85.8% of the budgeted target for the fiscal year ending next March. The fiscal deficit was 87% of the full-year target during the same period a year ago.

Prime Minister Narendra Modi on Saturday announced a 60-day waiver on interests on farm loans, offered fresh home loan subsidies, more rewarding bank deposits for senior citizens, offered greater funds available for small traders to borrow and announced a direct cash-transfer scheme for pregnant and lactating mothers.

SBI slashed its key lending rate by 90 basis points across all maturities.

Oil marketing companies hiked petrol and diesel price by Rs 1.29 and 97 paise per liter. ATF prices were hiked by 8.6%.

Maruti reported 1% y-o-y decline in total sales at 1,17,908 units in December. Eicher motor reported 42% jump in Royal Enfield sales at 57398 units. CV sales however were down 20%.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points lower start for our market.

Readers would recall that we have been positive on Nifty ever since immediate hurdle of 8050 was taken out and have been advising holding on to trading longs with a trailing stop-loss. In Friday's report we had mentioned that Nifty had generated breakout from a "Cup & Handle" formation on the hourly chart, he immediate target of which comes to 8180.

Nifty on Friday touched a high of 8197 before closing at 8186, achieving the target mentioned above and vindicating our view.

8275, the top made in December, is the next upside target as well as important hurdle to eye.

Immediate support on the hourly chart has moved up to 8030, with the stop-loss of which trading longs can be held on to.