NIFTY HOLDS 8680 SUPPORT; 8970 CONTINUES TO BE MAJOR UPSIDE TARGET
Dow fell 0.2% while S & P 500 and Nasdaq gained 0.1% and 0.2% respectively as financials led decliners, while oil rebounded. Goldman Sachs was the biggest drag on the Dow while Apple rose to close near its all-time high.
WTI crude rose 0.3% to $52.34 and Brent added 0.1% to $55.12 a barrel after EIA reported a lower than expected 13.8 mn barrel increases in oil inventories.
U.S. Treasuries held higher with the benchmark 10-year note yield falling to 2.364% and the two-year note near 1.161%. Dollar index fell about 0.2% to 100.17. Gold gained $3 to $1239 an ounce.
European markets, except a marginally lower DAX, gained upto 0.6%.
After trading in a narrow range till 2.30, benchmark indices saw sharp volatility post the RBI policy announcement and finally ended flat to modestly lower. Sensex lost 45 points to settle at 28290 while Nifty added 1 point to finish at 8769. BSE mid-cap and small-cap indices gained 0.5% and 0.2% respectively. BSE Consumer Durble index soared 2.8%, becoming top gainer among the sectoral indices, followed by 0.9% rise in Realty and Metal indices. FMCG index and Bankex were the lop losers, down 0.4% each.
Monetary Policy Committee, headed by RBI governor Urjit Patel, as against the expectation of a 25 bps rate cut, decided to leave repo rate unchanged at 6.25% for the second time in a row saying it wants to assess how the transitory effects of demonetisation on inflation and the output gap play out. RBI also changed its stance from accommodative to neutral.
RBI cut the economic growth forecast to 6.9% for the current fiscal from 7.1% estimated earlier, even as it said the economy will bounce back to 7.4% rate next fiscal.
FIIs net sold stocks and stock futures worth Rs 128 cr and 796 cr respectively but net bought index futures worth Rs 603 cr. DIIs were net sellers to the tune of Rs 167 cr.
Rupee appreciated 22 paise to end at 67.19/$.
Hero Motocorp reported better-than-expected results. Profit fell 2.6% to Rs 772 cr. Total income fell 11.6% to Rs 6899 cr. Margin stood at 17%.
Cipla reported 44% rise in net profit at Rs 375 cr. Revenue rose 16% to Rs 3647 cr. Operating profit jumped 46% to Rs 678 cr and margin expanded by 390 bps to 18.6%.
Today morning, except a 0.4% lower Nikkei, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 20 points higher start for our market.
At the risk of repeating, we have been working with major target of 8970 after 8560, the 61.8% retracement level of the entire 8970-7893 fall was taken out and have been advising holding on to long positions with a trailing stop-loss.
After the benchmark touched a high of 8814 on Monday, we had advised trailing the stop-loss to 8680. Yesterday, Nifty, after touching a low of 8715, rebounded to close at 8769 and is set to open higher today.
8970 continues to be major upside target. 8680 continues to be immediate support, with the stop-loss of which positional longs should be held on to.
Lupin, BPCL, Cairn and Powergrid will report their quarterly earnings today.