NIFTY ON TRACK TO ACHIEVE 8627 TARGET

NIFTY ON TRACK TO ACHIEVE 8627 TARGET

WORLD MARKETS                             

US indices surged 1.1%-1.4% on Friday, breaking five day losing streak as energy stocks led gains with U.S. crude rising and as investors considered a mixed bag of economic reports.

Nymex oil rose $2.44 or 5.3% to $48.69 a barrel; Gold gained 0.9% to $1277 an ounce.

The University of Michigan's preliminary consumer sentiment index climbed to 98.2 from a final 93.6 December reading. The consumer-price index declined 0.4% in December, with the cost of living falling by the most in six years following a 0.3% fall the month before. A third report had factory production slowing in December, up 0.3% versus a 1.3% increase in output in November.

Goldman Sachs Group fell after the investment bank reported a 7% decline in quarterly profit.

European markets gained between 0.6%-2.2%. The Swiss National Bank's abandonment of its currency cap on the euro boosted risk sentiment in Europe ex-Switzerland, as it has added to hopes that the European Central Bank could announce more stimulus measures. On the data front, final euro area inflation data on Friday confirmed a month-on-month fall of 0.1% in December.

For the week, Dow fell 1.3%, S & P 500 declined 1.2% and Nasdaq gave away 1.5%. European markets however, except a modestly higher FTSE, climbed between 3%-6%.

AT HOME

After a lower opening, benchmark indices saw a gradual upmove through the session to end higher by a fifth of a percent. Sensex gained 46 points to settle at 28122 while Nifty finished at 8514, up 20 points. BSE mid-cap index gained 0.3% while the small-cap index ended flat. BSE Consumer Durable and Healthcare indices gained the most among the sectoral indices, rising 2% and 1.4% respectively while IT and Teck indices lost 0.2% and 0.1% respectively.

FIIs net bought stocks and stock futures worth Rs 1100 cr and 1206 cr respectively but net sold index futures worth Rs 848 cr. DIIs were net sellers to the tune of Rs 717 cr.

Rupee appreciated 19 paise to end at 61.87/$.

For the week, Sensex and Nifty gained 2.8% and 2.4% respectively.

Oil marketing companies on Friday cut petrol and diesel prices by Rs 2.42 and Rs 2.25 per litre respectively.

Meanwhile, the government raised the excise duty on petrol and diesel by Rs 2 a litre.

Reliance Industries on Friday reported 11.4% q-o-q dip in the standalone net profit at Rs 5085 cr for the December quarter which matched street expectations. Sales declined 17% to Rs 80196 cr. Gross refining margins dipped to $7.30 a barrel against 8.30 in the previous quarter. EBIDTA margin expanded by 50 bps.

Wipro reported better-than-estimated 1.3% rise in IT services revenue at USD 1.795 bn for the quarter ended December. Rupee revenue rose 3.9% to Rs 11344 cr. Net profit jumped 5% to Rs 2203 cr. Constant currency IT services revenue grew 3.7% q-o-q to USD 1.84 bn, which was higher compared to Infosys (2.6%) and TCS (2.5%). The company guided for a 1-3% growth in dollar revenue for the next quarter.

OUTLOOK

Today morning Shanghai is down more than 3%, led by brokerages after regulators took measures to rein in margin trading at three of the nation's biggest securities firms. HangSeng is down about half a percent. Other Asian markets are up between 0.5%-1% and SGX Nifty is suggesting about 50 points higher opening for our market.

In Friday's report we had mentioned that Nifty had broken out of the upper band of bollinger on the daily chart after a consolidation of a month and half. We had also mentioned that while 8627, the record high made in early December is the immediate target, the triangle breakout formation on the daily chart projects a target of about 9000, which can materialise over 6-8 weeks.

That continues to be the view. Immediate support on the hourly chart has moved up to 8380, with the stop loss of which trading longs should be held on to.

HUL will report its quarterly earnings today.

US markets will remain shut today for Martin Luther King Jr. day.