NIFTY EXTENDS CONSOLIDATION

NIFTY EXTENDS CONSOLIDATION

WORLD MARKETS                             

Dow and S & P 500 fell 0.4% each but Nasdaq managed to gain 0.2% yesterday.

US crude fell 3.8% or $2.03 to $51.96 a barrel and Brent was down $2.16 at $54.94 on concerns that record Iraqi crude exports and rising U.S. production would undermine the Organization of Petroleum Exporting Countries recent deal to cut supply.

Dollar index fell 0.3% to 101.84. U.S. Treasuries rose, with the two-year note yield slipping to 1.19% and the benchmark 10-year note yield falling to 2.376%.

European markets, except a 0.4% higher FTSE, fell 0.3%-1.7% with Italy leading the losses. Sterling dropped more than 1% against the dollar to $1.216, amid talk of Britain drastically reworking trade ties with the European Union after Brexit. The euro zone unemployment rate remained at 9.8% in November. German industrial production went up for a second month in a row in November and exports rose by 3.9%, giving further evidence of an economic rebound in the largest EU economy.

AT HOME

Benchmark indices ended marginally lower after a rangebound but choppy trade, extending the losing steak to second straight day. Sensex settled at 26726, down 33 points while Nifty lost 8 points to finish at 836. BSE mid-cap and small-cap indices however, gained 0.2% and 0.4% respectively. BSE Oil & Gas and Healthcare indices lost 0.9% and 0.8% respectively, becoming top losers among the sectoral indices while Realty, FMCG and IT indices added 0.6% each, becoming top gainers.

FIIs net sold stocks, index futures and stock futures worth Rs 325 cr, 173 cr and 141 cr respectively. DIIs were net buyers to the tune of Rs 97 cr.

Rupee depreciated 25 paise to end at 68.2/$.

Aided by robust personal and corporate income tax, direct tax collection during the first nine months of the current financial year 2016-17 grew 12% on year to Rs 5.53 lakh crore. Indirect tax, which includes central excise, service tax and customs, was up25% to Rs 6.30 lakh crore.

OUTLOOK

China's December CPI is up 2.1% as against a poll of 2.3% rise. PPI is up 5.5%, higher than the expectations of a 4.5% rise and marking the fastest rise in more than 5 years.

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

Nifty has been in a consolidation mode after achieving the major 8275 target. 8275, as we have been mentioning, is the top made in December and also coincides with the 200-DMA and therefore a decisive crossover of this level is required for the fresh upmove. If that happens, 8400-8450 would emerge as the next target area.

Immediate support on the hourly chart continues to be placed at 8200, with the stop-loss of which existing longs can be held on to.

Indusind Bank will report its quarterly earnings today.