PRUDENT MORNING MANTRA - 22.07.2014

NIFTY NEARLY ACHIEVES 7730 TARGET; TRAIL STOP LOSS TO 7570

WORLD MARKETS

US indices, after falling nearly three fourth of a percent in the initial trade due to the ongoing turmoil in Gaza and Ukraine, recovered through the session to end with cuts in the vicinity of a fourth of a percent.

U.S. President Barack Obama reiterated demands for Russian President Vladimir Putin to authorize full access to the crash site or face further sanctions, as "compelling" evidence builds that pro-Russian separatists supplied by Moscow shot down the plane by mistake.

Meanwhile, U.K. Prime Minister David Cameron called on the European Union to toughen sanctions against Moscow should it be proven that separatists were responsible.

In the Gaza Strip, the Palestinian death toll reportedly climbed above 500 and seven Israeli soldiers died on Monday, following the deaths of 13 soldiers on Sunday, with the fighting continuing despite appeals for a ceasefire.

Erupean markets lost anywhere between 0.4%-1.5%. Nymex crude gained 1.5% to $104.6 a barrel and gold rose 0.5% to $1314 an ounce.

AT HOME

After gaining nearly three fourth of a percent in the initial trade, benchmark indices saw a gradual downward move through the session to end higher by just a fourth of a percent. Sensex gained 74 points to settle at 25715 while Nifty finished at 7684, up 20 points. BSE mid-cap and small-cap indices gained 0.5% and 0.9% respectively. BSE FMCG and Oil & Gas indices gained the most among the sectoral indices, rising 1% and 0.6% respectively while Realty and Capital Goods indices lost 1% and 0.8% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 161 cr, 295 cr and 410 cr respectively. DIIs were net sellers to the tune of Rs 181 cr.

Rupee depreciated 2 paise to close at 60.30/$.

HDFC Bank reported, lower than expected 21.1% y-o-y growth in June quarter net profit at Rs 2233 cr due to higher provisioning and lower other income. NII at Rs 5171 cr, grew 17%, which was slightly better-than-estimates.

HDFC on the other hand reported better-than-estimated 14.7% rise in net profit at Rs 1345 cr. NII too rose 14.7% to Rs 1745 cr.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting about 25 points higher opening for our market on signs of ebbing of tension in Ukraine and Gaza.

In Ukraine, rebel leaders have handed over two black boxes to Malaysian experts who confirmed they were in good condition. Focus now turns to a meeting of euro zone foreign ministers today to discuss further sanctions against Russia.

In Gaza, hopes for a ceasefire are also in focus after U.S. Secretary of State John Kerry and United Nations chief  arrived in Cairo for talks aimed at stopping the bloodshed.

Yesterday, Nifty, after touching a high of 7722, eased to close at 7684. This nearly achieved our initial target of 7730 that we had set when 7600 was crossed. Once 7730 is taken out, next target, as we have been mentioning, would be 7808.

Immediate support on the hourly chart has moved up to 7570, with the stop loss of which trading longs should be held on to.

Axis Bank will report its quarterly earnings today.