NIFTY ACHIEVES 7940 TARGET
S & P 500 and Nasdaq gained 0.7% each and Dow rose 0.8% yesterday with energy stocks leading as oil rose above $49 a barrel to hit fresh 2016 high.
US oil rose nearly 2% to $49.56 after data from the US Energy Information Administration showed crude inventories fell larger-than-expected 4.2 million barrels in the week to May 20. Brent gained 2.3% to $49.74 a barrel.
Markit Flash U.S. services PMI for May came in at 51.2, down from 52.8 in April . The advance April goods trade deficit was $57.53 billion. Mortgage application volume rose 2.3% for the week.
Dollar index fell about 0.2% to 95.40. Gold fell $5 to $1224 an ounce, its lowest since early April.
European markets climbed 0.7%-2.3% on the back of a new debt deal for Greece and a recovery in oil prices. Eurogroup ministers agreed to release 10.3 billion euros ($11.42 billion) for Greece after lawmakers approved more painful austerity measures over the weekend. Closely watched German Ifo Business climate index rose from 106.7 points in April to 107.7 points in May.
There was no stopping for bulls as benchmark indices, after a gap up opening, kept on moving higher through the day and finally ended with mammoth gains of two and a third of a percent, marking the best day since 1st March. Sensex soared 576 points to settle at 25881 while Nifty ended at 7935, up 186 points. BSE mid-cap and small-cap indices gained 1% each. All the BSE sectoral indices ended in green with Bankex and Capital Goods indices leading the tally, up 3.2% and 3% respectively.
FIIs net bought stocks, index futures and stock futures worth Rs 495 cr, 3343 cr and 168 cr respectively. DIIs were net buyers to the tune of Rs 337 cr.
Rupee appreciated 42 paise to end at 67.33/$.
Bajaj Auto reported 29.2% growth in Jan-March quarter net profit at Rs 803 cr, driven by better volume growth and operational performance despite lower other income. Revenue rose 14.2% to Rs 5411 cr. Operating profit grew 37.4% to Rs 1152 cr and margin expanded by 360 bps to 21.3%.
Ashok Leyland reported a sharp 66.5% dip in net profit at Rs 77 cr, impacted by an exceptional loss of Rs 379 cr. Revenue rose 32% to Rs 5955 cr. Operating profit shot up 65% to Rs 753 cr and margin expanded by 250 bps to 12.6%. Revenue met expectations while operational performance was slightly below estimates.
L & T reported better-than-expected results on all counts. Consolidated net profit rose 18.6% to Rs 2454 cr whille revenue increased 18.3% to Rs 33157 cr. EBIDTA shot up 35.2% to Rs 4859 cr and margin expanded by 190 bps to 14.7%.
Tata Steel reported wider-than-expected consolidated net loss of Rs 3279 cr on revenues of Rs 29507 cr which were down 12.4%. EBIDTA rose 43.7% to Rs 1580 cr and margin improved. Topline and bottomline were worse-than-expected while EBIDTA topped estimate. The loss came in wider than expected as the company took impairment charges and write downs of Rs. 2857.79 crore due to restructuring in UK and some purely performing investments. The company however did not reveal anything about the sell of its UK operations.
Today morning Hang Seng is down 0.2%, Shanghai is flat and Nikkei is up about 0.7%. SGX Nifty is suggesting about 20 points higher opening for our market.
In yesterday's report we had mentioned that a sustained trading above 7820 would trigger a buy on the hourly chart and 7940, the top made last week, would be the next target in that case.
The benchmark crossed 7820 hurdle in the initial trade itself and surged all the way to 7941 before closing at 7935, achieving the 7940 target.
After today's positive start, Nifty would be back in the vicinity of 7980-7990 hurdle area, where has been a ceiling for last one month or so. A successful crossover of this hurdle would open up the space for the further upside till about 8150, where 20-month moving average is placed.
Traders can book some profit around 7980 and raise stop loss in remaining position to 7820.
BPCL and ONGC will report their quarterly earnings today.