NIFTY SET TO ACHIEVE 9000 TARGET; TRAIL STOP LOSS TO 8850
Dow surged 1.3% and S & P 500 and Nasdaq climbed 1% each yesterday, bouncing back from a two-day fall, on strong jobs data, stability in oil and Fed Chair Janet Yellen's reported comments that offset rate worries.
Labor Department reported jobless claims dropped by 43,000 to 265,000 last week, fewer than forecast and the lowest number in nearly 15 years. Another report had pending-home sales dropping 3.7% in December.
Published reports of Yellen's comments to lawmakers on Capitol Hill cushioned what some interpreted as a hawkish tone to a Fed release Wednesday.
Nymex crude gained 8 cents to $44.53 a barrel and gold fell $31.30 or 2.4% to $1255 an ounce. Brent gained 70 cents to $49 a barrel.
European markets, except a 0.2% cut in FTSE, gained between 0.2%-0.6%. Shell fell 4.3% after announcing a spending cut of $15 billion over the next three years, weighing on FTSE. German jobless rate for January came in at 6.5%, lower than December's number of 6.6%
After trading in the negative territory for better part of the day, benchmark indices saw a sharp spike up in last half an hour to end higher by about four tenth of a percent, setting fresh record in terms of highest closing. Sensex gained 123 points to settle at 29682 while Nifty finished at 8952, up 38 points. BSE mid-cap index however lost 0.4% while the small cap index gained just 0.1%. Except a 0.2% and 0.1% cut in BSE Metal and Teck indices respectively, all other BSE sectoral indices closed higher with Realty index leading the tally, climbing 3.1%, followed by 1.6% rise in Oil & Gas index.
FIIs net bought stocks and index futures worth Rs 1724 cr and 1867 cr respectively but net sold stock futures worth Rs 874 cr. DIIs were net sellers to the tune of Rs 1680 cr.
Rupee fell 45 paise to 61.86/$.
Asian Paints tumbled after reporting 11.8% rise in consolidated net profit at Rs 368.2 cr and income growth of 5.8% at Rs 3653 cr, which were lower than the estimated figures of Rs 428 cr and 3979 cr respectively. Operating margin expanded 40 bps to 16%, again lower than the estimated 16.5% mark.
HDFC reported in-line with estimated, 11.6% rise in net profit at Rs 1425.5 cr. Income from operations rose 12.9% to Rs 6758 cr.
Dr Reddy reported better-than-estimated topline and bottomline but the operating performance was below estimates. Consolidated net profit fell 7% to Rs 574.5 cr while revenues rose 8.7% to Rs 3843 cr. Operating margin fell 566 bps to 18.8% as against expectation of 22%.
Government yesterday fixed a Rs 358 a share as the floor price for up to 10% stake sale in Coal India which will be held today.
Today morning Asian markets are trading with gains of upto 0.7% and SGX Nifty is suggesting about 30 points higher opening for our market.
As you would recall, we have been working with the target of 9000 ever since Nifty broke out of a triangle formation of 15th January.
After retreating from the vicinity of the 9000 target on Wednesday, Nifty rebounded yesterday to end at 8952 and is set to open about 40 points higher today, which would again take the benchmark closer to the 9000 mark.
While 9000 continues to be immediate target, higher levels cannot be ruled out as momentum oscillators continue to support the upmove. Therefore one would do well to hold trading longs with a trailing stop loss.
Immediate support on the hourly chart has moved up to 8850 which should serve as that stop loss.
ICICI Bank, HCL Tech, Tech Mahindra, NTPC and JSW Steel will report their quarterly earnings today.