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Major headlines:

·         Oil extends declines on rising U.S output

·         NPPA slashes prices of 33 essential medicines

·         Demonetisation to bring revenue to Government

Indian Indices:With most Asian markets shut for holiday the cues from Australia & Japan were weak with both indices seeing cuts of nearly 1%. Globally after a superb start to the New Year profit booking seems the theme for this week as caution returns at higher levels.US$ weakened further while bond yields also softened as gold prices rallied indicating flight to safety after a heady run for equities.

Nifty will also see initial weakness after rising sharply last week as 8700 proves a resilient top. With the Union Budget to be announced on Wednesday expect range bound market movement for today &tomorrow with rumours on stock/sector driving prices. Foreign flows to stay positive with US$ weakness prompting value buying.

The BSE Sensex is currently trading at 27859.52, down by 22.94 points or 0.08% after trading in a range of 27813.32 and 27916.20. There were 12 stocks advancing against 18 stocks declining on the index. The broader indices were trading mixed; the BSE Mid cap index was up by 0.13%, while Small cap index was down by 0.08%.

The CNX Nifty is currently trading at 8627.50, down by 13.75 points or 0.16% after trading in a range of 8617.75 and 8650.15. There were 16 stocks advancing against 35 stocks declining on the index.

Technical view: Nifty faces resistance around 8700-8720 while support emerges around 8580-8600.Bank Nifty finds resistance around 19800 while support emerges around 19400.

Market Sentiment:

The market breadth on BSE was negative in the ratio of 1084:1146, while 168 scrips remained unchanged.

Trading ideas :EICHERMOT (Buy above Rs 23600 for target of Rs 24300, SL at Rs 23250): Stock has given a breakout from downward sloping trendline on daily charts, which connected two previous lower highs. Also stock managed to successfully close above its 100-DMA placed at Rs 23070 levels. The breakout has been confirmed on lower time frame charts with spurt in volumes, which may augur well for the stock. We advise to Buy Eicher Motor above Rs 23600, stop loss at Rs 23250 and Target of Rs 24300.

Corporate Snippets: Lokesh Machines Ltd is set to enter into an agreement with EMCO GmbH of Austria for the manufacture and sale of the latters machines in India and export supplies.

Jain Irrigation Systems will raise USD 200mn through issuance of dollar bonds—for the first time –to overseas investors, primarily to retire debt.

Aditya Birla Group plans to invest Rs 70 bn in the next two years in Andhra Pradesh on expanding existing businesses.

MarutiSuzki India Ltd said that it will increase prices of products ranging from Rs 1500 to Rs 8014 (ex-showroom, Delhi) across models.

Nifty Movers:  The top gainers on Nifty were Idea Cellular up by 7.05%, BhartiAirtel up by 4.49%, Grasim Industries up by 2.19%, Sun Pharma up by 1.60% and Dr. Reddy’s Lab up by 1.39%.

On the flip side, AurobindoPharma down by 2.14%, Tata Motors - DVR down by 1.77%, BhartiInfratel down by 1.27%, Hero MotoCorp down by 1.24% and Wipro down by 1.19% were the top losers.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Realty up by 1.00%, Capital Goods up by 0.38% and FMCG up by 0.22%, while IT down by 0.86%, Auto down by 0.65%, Consumer Durables down by 0.60%, Oil & Gas down by 0.40% and Bankex down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were BhartiAirtel up by 4.44%, Sun Pharma up by 1.74%, Dr. Reddy’s Lab up by 1.28%, Power Grid up by 0.71% and Lupin up by 0.70%.

On the global front: On the global front, Asian markets were exhibiting mixed trend at this point of time, though most of the Asian equity benchmarks are closed on Monday for Lunar New Year holidays. The US markets made a mixed closing in last session after a lack luster trade, as investors weighed disappointing fourth-quarter data on domestic economic growth and a spate of earnings.

Global Signals: The Asian markets were trading mixed; Nikkei 225 decreased 108.27 points or 0.56% to 19,359.13, while Jakarta Composite increased 3.98 points or 0.07% to 5,316.82.

Markets in China, Singapore, South Korea, Taiwan, Malaysia and Hong Kong were shut on Monday for the Lunar New Year holiday.