PRUDENT MORNING MANTRA - 28.08.2014

NIFTY SURGES TO ALL-TIME CLOSING HIGH AFTER HOLDING 7855 SUPPORT; EYES 8000

WORLD MARKETS

U.S. indices ended little changed yesterday, with the S&P 500 managing to close at a record high above 2,000 points for a second consecutive session.

European markets, except a 0.2% cut in DAX, ended with marginal gains. Markets continued to mull whether or not more stimulus measures could be announced when the ECB next meets. Germany's Finance Minister reportedly told a newspaper that remarks by ECB President Mario Draghi had been "over-interpreted" to suggest imminent new measures.

A German consumer climate survey showed a fall in morale for the first time in more than 1-1/2 years. Forward-looking data from market research group GfK showed consumer confidence at 8.6 in September, down from 8.9 in August.

Nymex crude rose 2 cents to $93.9 a barrel; Gold lost 0.1% to $1283 an ounce.

In geopolitical news, Kiev accused Moscow of launching a fresh military incursion across its eastern border. The move throws a spanner in the peace process that was eyed after the leaders of the two nations met  this week and agreed to de-escalate tensions.

                                                             

AT HOME

After a gap up opening, benchmark indices traded in a narrow range  and finally ended higher by four tenth of a percent, marking a fresh all-time high on closing basis. Sensex gained 117 points to settle at 26560 while Nifty finished at 7936, up 31 points. BSE mid-cap and small-cap indices gained 0.7% and 0.8% respectively. BSE Oil & Gas and Auto indices gained the most among the sectoral indices, rising 0.8% each while Realty index tumbled 1.4%, becoming top loser, followed by 0.6% cut in the Power index.

FIIs net bought stocks, index futures and stock futures worth Rs 290 cr, 438 cr and 205 cr respectively. DIIs were net buyers to the tune of Rs 237 cr.

Rupee depreciated 2 paise to close at 60.45/$.

DLF plunged after the Supreme Court today rejected company's plea to stay the Competition Appellate Tribunal's order upholding the penalty imposed on the builder by the Competition Commission of India and asked it to deposit the penalty amount of Rs 630 crore within three months.

Government yesterday notified the liberalised FDI norms for the Railways, permitting 100% FDI through automatic route in several areas, including high speed trains, suburban corridor projects through Public Private Partnership (PPP), dedicated freight lines, rolling stock including train sets, locomotives/coaches manufacturing and maintenance facilities, railway electrification, signalling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line/sidings.

OUTLOOK

Today morning, barring a half a percent cut in Nikkei, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting about 20 points higher opening for our market.

After taking support near our indicated 7855 mark on Tuesday, Nifty advanced further yesterday to end at 7936, marking a fresh all-time high on closing basis.

Stay long with the stop loss of 7855 continues to be the advise. An upward sloping trendline adjoining tops made in May and June this year presents a resistance around 8010, which would be the immediate target to eye.

Indian markets will remain shut tomorrow on account of Ganesh Chaturthi.

PRUDENT MORNING MANTRA - 27.08.2014

NIFTY REBOUNDS FROM OUR INDICATED SUPPORT

WORLD MARKETS

US indices gained between 0.1%-0.3% yesterday, lifting the Dow to an all-time high and the S&P 500 to its first finish above 2,000, after better-than-expected reports cast favorable light on the U.S. economy.

Durable goods order rose 22.6% in July versus a 7.5% estimate, marking their biggest gain on record. A measure of consumer confidence hit 92.4 in August, exceeding estimates of 89.

European markets gained between 0.7%-1.3%

Nymex crude rose 0.5% to $93.9 a barrel; Gold too gained 0.5% to $1285 an ounce.

Israel and Palestine yesterday agreed on a cease-fire agreement aimed at ending their seven-week conflict in Gaza.

                                                             

AT HOME

After falling nearly half a percent, benchmark indices staged a smart comeback in last hour of trade to end almost flat. Sensex gained 6 points to settle at 26443 while Nifty finished at 7904, down 2 points. BSE mid-cap and small-cap indices lost 0.2% and 0.8% respectively. BSE Power and Capital Goods indices lost 1.3% and 0.8% respectively, becoming top losers among the sectoral indices while Healthcare and FMCG indices gained 1.1% and 0.9% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 365 cr, 269 cr and 47 cr respectively. DIIs were net sellers to the tune of Rs 259 cr.

Rupee appreciated 13 paise to close at 60.43/$.

OUTLOOK

Today morning Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 35 points higher opening for our market.

In our latest weekly and subsequent daily reports, we have been advising holding on to trading longs with the stop loss of 7855. Yesterday, after touching a low of 7862, Nifty rebounded smartly to end at 7905 and is set to open with an upward gap today, vindicating our view.

7855 continues to be important near term support, with the stop loss of which trading longs can be held on to. On the way up, 8000 continues to be the immediate target.

PRUDENT MORNING MANTRA - 26.08.2014

MARKETS GET A COAL JOLT

WORLD MARKETS

US indices gained about half a percent yesterday, with the S & P 500 crossing 2000 for the first time before closing at 1998,  lifted by a round of corporate deals and optimism that the European Central Bank would embark on further moves to stimulate the European economy.

New home sales for July came in lower than expected at 412000 and fell for the second consecutive month. Also, US service sector activity slowed more than expected in August.

European markets surged about 2%. Germany's widely-watched Ifo business climate index fell to 106.3 in August, below market expectations.

Nymex Crude fell 30 cents to $93.4 a barrel.

AT HOME

After rising nearly two third of a percent, benchmark indices sold-off in the late noon trade on the back of Supreme Court decision on coal block allocation to end flat to marginally lower. Sensex gained 17 points to settle at 26437 while Nifty finished at 7906, down 7 points. BSE mid-cap and small-cap indices lost 0.6% and 0.4% respectively. BSE Metal index nosedived 4.3%, becoming top loser among the sectoral indices, followed by 2% cut in Realty index. FMCG and IT indices gained 1% each.

Market, especially metal stocks, tumbled after the Supreme Court deemed all coal block allocations made since 1993 as illegal. The court will take a decision on re-allocation of mines on 1 September, 2014 and will reserve cancellation on a case-by-case basis.

FIIs net bought stocks, index futures and stock futures worth Rs 127 cr, 192 cr and 168 cr respectively. DIIs were net buyers to the tune of Rs 46 cr.

Rupee depreciated 10 paise to close at 60.56/$.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Yesterday, after touching a fresh all-time high of 7968, Nifty sold-off to close at 7906. 7855 continues to be the immediate support, a breach of which would generate a sell on the hourly chart and would pave the way for further correction. 8000 continues to be the immediate target on the way up.

PRUDENT MORNING MANTRA - 25.08.2014

STAY LONG WITH THE STOP LOSS OF 7855

WORLD MARKETS

Dow and S & P 500 ended lower by about a fourth of a percent on Friday, with the S & P 500 breaking a four-session winning streak, as markets weighed rising tension between Russia and Ukraine and speeches by European Central Bank President Mario Draghi and Federal Reserve Chair Janet Yellen.

Speaking at the Central Bankers' gathering at Jackson Hole, Yellen reiterated that slack remains in the U.S. labor market even as the American economy continues a five-year recovery and Draghi expressed confidence that stimulus already announced and a weaker euro would help the euro-zone economy, but the ECB is ready to do more if needed.

A Russian aid convoy finally passed into Ukrainian territory weighed on markets. Ukrainian authorities said the move amounted to a "direct invasion" of the country by Russia, and events were closely watched for a flare up in tensions. NATO said that it was observing an alarming increase in Russian forces near Ukraine.

European markets ended with cuts of upto 0.9%.

Gold rose $5 to $1280 an ounce.  Nymex crude fell 31 cents to $93.6 a barrel.

Israel launched more air strikes on Gaza on Sunday.

                                                             

AT HOME

After a positive start, benchmark indices traded in a narrow range through the session and ended higher by nearly a fourth of a percent, marking a fresh record high. Sensex gained 59 points to settle at 26420 while Nifty finished at 7913, up 22 points. BSE mid-cap index gained 0.2% while the small-cap index ended absolutely flat. BSE IT index and Bankex gained 1.6% and 1% respectively, becoming top gainers among the sectoral indices while Realty and FMCG indices lost 0.8% and 0.5% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 302 cr, 449 cr and 297 cr respectively. DIIs were net sellers to the tune of Rs 184 cr.

Rupee appreciated 20 paise to close at 60.46/$.

For the week, Sensex and Nifty gained 1.2% and 1.6% respectively.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 10 points lower opening for our market.

We have been bullish on Nifty ever since 7690 hurdle was taken out on 12th August and have been advising holding on to trading longs with a trailing stop loss. That continues to be the view.

Immediate support on the hourly chart is now placed at 7855, only a sustained trading below which would warrant a review of the bullish stance.

On the way up, an upward sloping trendline adjoining major tops on the daily chart presents a resistance around 8000 and that would be the next target to eye.

PRUDENT MORNING MANTRA - 22.08.2014

S & P 500 HITS RECORD HIGH ON ENCOURAGING DATA; JACKSON HOLE IN FOCUS

WORLD MARKETS

Dow and S & P 500 gained about three tenth of a percent with the later scaling a fresh all-time high on upbeat economic data on housing, jobs and factory activity. Nasdaq closed flat.

Jobless claims declined by 14,000 last week to 298,000, better than expected. Existing home sales in July hit fastest pace in nearly a year at 5.15 mn units. Conference Board's Leading Economic Index rose 0.9% last month. Preliminary reading of manufacturing activity in August came in at 58 as against the estimated 56.1 figure. And lastly the Philadelphia Fed's business activity index jumped to 28.0 in August from 23.9 the month before.

European markets gained between 0.3%-1.6% despite some disappointing data from the euro zone, as investors focused on central bank monetary policy. Euozone flash manufacturing PMI for August came in at a 13-month low of 50.8, down from 51.8 in July. The services PMI came in at 53.5, down from 54.2 in July. Germany’s PMIs actually surprised to the upside, although they slipped from July. The story was more mixed in France, where the services PMI climbed to a five-month high, but the manufacturing PMI tanked to a 15-month low.

Gold tumbled $20 to $1275 an ounce, marking a two-month low. Nymex crude rose 51 cents to $94 a barrel.

                                                             

AT HOME

Benchmark indices ended modestly higher after a choppy trade, extending the consolidation to third day. Sensex gained 46 points to settle at 26360 while Nifty finished at 7891, up 16 points. BSE mid-cap and small-cap indices outperformed yet again, rising 0.5% and 0.3% respectively. BSE Consumer Durable index climbed 3.8%, becoming top gainer among the sectoral indices, followed by 1.2% rise in Bankex. Realty and Metal indices were the top losers, down 1.9% and 1.4% respectively.

FIIs net bought stocks and stock futures worth Rs 413 cr and 675 cr but net sold index futures worth Rs 158 cr. DIIs were net buyers to the tune of Rs 64 cr.

Rupee depreciated 6 paise to close at 60.67/$.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points higher opening for our market.

After climbing nearly 400 points in 6-sessions, Nifty is in a consolidation mode for past three sessions, which should be considered a healthy scenario. Immediate support on the hourly chart continues to be placed at 7795, with the stop loss of which trading longs should be held on to. On the way up, the upward sloping trendline adjoining recent tops on the daily chart is placed around 7990, which would be the immediate target.

Markets across the globe would be watching out for the central bankers gathering in Jackson Hole starting today. US Fed chair Yellen is expected to sound a dovish tone when she talks about the labor market. ECB President Draghi on the other hand may allude to need for a quantitative easing for the eurozone given the weak economic data and lack of inflation in the eurozone.

PRUDENT MORNING MANTRA - 21.08.2014

NIFTY EXTENDS CONSOLIDATION; TRAIL STOP LOSS TO 7795

WORLD MARKETS                             

Dow and S & P 500 gained about three tenth of a percent, with the S & P 500 closing less than 5 points away from its intraday record high. Nasdaq closed flat.

Minutes from the Federal Reserve's last policy meeting showed that some Fed officials want a "relatively prompt" rate hike based on the economy's progress. But most members agreed more data was needed to move up the schedule of rate hikes.

Geopolitics continued to be in focus. U.S. President Obama condemned the beheading of an American journalist by Islamist militants and vowed the U.S. would do what it must to protect its citizens. In eastern Europe, Kiev-backed forces are steadily gaining the upper hand in eastern Ukraine and are tightening the battle around main rebel bastions of Donetsk and Lyhansk.

European markets, except a modestly higher Spain, ended with modest cuts. In the U.K., two members of the Bank of England's interest-rate-setting committee voted to raise rates by 0.25 bps in August, according to minutes released yesterday.

Nymex crude rose $1.6 to $96.1 a barrel; Gold lost $1.5 to $1295 an ounce.

AT HOME

After a positive start, benchmark indices saw a sustained downward move through the session to end lower by about a third of a percent, breaking the six-day winning streak. Sensex lost 106 points to settle at 26314 while Nifty finished at 7875, down 22 points. BSE mid-cap and small-cap indices however gained 0.1% and 0.9% respectively. BSE Oil & Gas index tumbled 1.3%, becoming top loser among the sectoral indices, followed by 0.7% cut in FMCG index. Healthcare index soared 2.9%, becoming the top gainer, followed by 0.7% rise in Power index.

FIIs net bought stocks, index futures and stock futures worth Rs 251 cr, 277 cr and 180 cr respectively. DIIs were net sellers to the tune of Rs 481 cr.

Rupee appreciated 6 paise to close at 60.61/$.

OUTLOOK

China's flash PMI for August has come in at a three month low of 50.3 as against July's reading of 51.7 and expected figure of 51.5.

Asian markets, except Nikkei, are trading with modest cuts owing to this data. SGX Nifty is suggesting a flattish start for our market.

It was second day of consolidation for Nifty as after touching a fresh all-time high of 7923 in the opening trade, the benchmark slipped through the session to end at 7875.

Immediate support on the hourly chart has moved up to 7795 with the stop loss of which trading longs should be held on to.

PRUDENT MORNING MANTRA - 20.08.2014

NIFTY RISES FOR THE SIXTH DAY; TRAIL STOP LOSS TO 7740

WORLD MARKETS                             

US indices gained about half a percent yesterday, with Nasdaq hitting fresh 14-year high and S & P 500 closing just 10 points away from the all-time high, on the back of encouraging economic reports.

Consumer price index increased 0.1% in July, in line with expectations and indicating the cost of living remains muted even as the economy improves. Housing starts for July came in at 1.093 mn vs. 970000 estimate.

European markets gained upto 1% with DAX leading the tally as easing tensions in Ukraine and stellar earnings reports boosted sentiment. In UK, consumer price inflation for July touched a near-five-year low at 1.6%.

Nymex crude tumbled $1.93 to $94.5 a barrel, a seven-month low; Brent touched a 14-month low at sub $102 level; gold fell $2.6 to $1296.7 an ounce.

AT HOME

Benchmark indices ended with modest gains after a rangebound trading session, extending the winning streak to sixth straight session and closing at fresh all-time high. Sensex gained 30 points to settle at 26421 while Nifty finished at 7897, up 23 points. BSE mid-cap and small-cap indices outperformed, climbing 1.1% and 1.2% respectively. Except a 0.6% and 0.4% cut in BSE IT and Teck indices, all other sectoral indices ended in green with Auto and Realty indices leading the tally, rising 2.2% and 1.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 559 cr, 451 cr and 834 cr respectively. DIIs were net sellers to the tune of Rs 263 cr.

Rupee appreciated 9 paise to close at 60.67/$, marking a two week closing high.

OUTLOOK

Today morning, despite positive cues from the US, Asian markets are trading mixed with modest changes as a ceasefire in the Gaza Strip has collapsed, with Palestinian militants firing rockets into Israel, prompting Israeli airstrikes in return.

SGX Nifty is suggesting about 10 points lower opening for our market.

After taking out 7690 hurdle last week, Nifty has risen nearly 200 points in just 3 sessions. Traders would do well to book some profits in trading longs and trail stop loss in remaining ones to 7740, which is the immediate support on the hourly chart. 7960 continues to be the next target on the way up.

In the US, minutes of the latest Fed meeting will be released today.

PRUDENT MORNING MANTRA - 19.08.2014

NIFTY ACHIEVES 7880 TARGET; HEADED FOR 7960

WORLD MARKETS

US indices surged nearly a percent yesterday, with Nasdaq touching a 14-year high and and S & P 500 closing within 1% of all-time high, on easing geopolitical tensions and positive economic data.

Russia said a dispute over its convoy of humanitarian aid to Ukraine had been settled, and a Ukrainian official said more than five hours of discussions in Berlin had brought about "moderate progress," according to media reports.

In the middle east, Iraqi and Kurdish troops reportedly reclaimed control of the Mosul Dam after increased U.S. airstrikes aimed to help them during the weekend.

Back in the US, National Association of Home Builders  reported its monthly confidence index rose 2 points to 55, beating expectations.

Israel and Hamas agreed to prolong their truce for another 24 hours to pursue talks on a long-term ceasefire and a broader deal for the war-ravaged region.

European markets gained between 0.8%-1.7%.

Nymex crude fell 94 cents to $96.4 a barrel and Brent touched a 14-month low at $102/bbl; Gold eased 0.5% to $1299 an ounce.

                                                             

AT HOME

It was a historic day as benchmark indices surged more than a percent to scale fresh all-time high. Sensex soared 288 points to settle at 26391 while Nifty finished at 7874, up 82 points. BSE mid-cap and small-cap indices climbed 1.8% and 2.3% respectively. Except at 0.4% each cut in BSE IT and FMCG indices, all other sectoral indices ended in green with Oil & Gas index and Bankex leading the tally, putting on 2.6% and 2.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 473 cr, 218 cr and 673 cr respectively. DIIs were net buyers to the tune of Rs 490 cr.

OUTLOOK

Today morning Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 30 points higher opening for our market.

Ever since Nifty crossed 7690 resistance last Tuesday, we have been working with targets of 7840 and 7880, where 7840 was the previous all-time high and 7880 was where the trendline adjoining recent tops on the daily chart was placed.

The benchmark yesterday touched a high of 7880 before closing at 7874, achieving both the above targets and vindicating our view.

The momentum continues to be positive. Taking cues from the daily chart, next target comes to around 7960. Immediate support on the hourly chart has moved up to 7725, with the stop loss of which trading longs should be held on to.

PRUDENT MORNING MANTRA - 18.08.2014

HIGHEST WEEKLY CLOSE FOR NIFTY; STAY LONG WITH THE STOP LOSS OF 7675

WORLD MARKETS

After rising about four tenth of a percent on Thursday, US indices ended mixed on Friday, with Dow losing 0.3%, S & P closing flat and Nasdaq gaining 0.3%.

Economic data was mixed. The Producer Price Index rose 0.1% in July, in line with expectations.The Empire State Manufacturing Index fell in August. Industrial Production rose 0.4%, with the highest rate of utilization since June 2006. Consumer sentiment was a disappointing 79.2, the lowest since November last year.

Geopolitical concerns were back after media reports suggested that the Ukrainian artillery destroyed a "significant" part of a Russian armored column that crossed into Ukraine. Russia, meanwhile, accused Ukraine of attempting to disrupt its humanitarian aid mission to eastern Ukraine and called for a ceasefire in the region to allow for the deliveries.

European markets, except a flat FTSE, ended lower, with cuts ranging from 0.3%-1.4% with DAX leading the tally.

Nymex crude rose $1.8 to close at $97.4; Gold lost $9.5 to $1306.

For the week, US indices gained between 0.7%-2.2% and European markets were up 0.6%-1.8%.

The White House on Sunday said President Barack Obama had authorized U.S. air strikes in Iraq to help retake control of the Mosul Dam and that the action was consistent with his goal of protecting U.S. citizens in that country.

                                                             

AT HOME

Benchmark indices, after a positive start, saw a gradual upmove through the session to end higher by about seven tenth of a percent, extending the rising streak to fourth straight day. Sensex climbed 184 points to settle at 26103 while Nifty finished at 7792, up 52 points. BSE mid-cap and small-cap indices gained 1.2% each. Except a marginal cut in BSE IT and Teck indices, all other sectoral indices ended higher with Consumer Durable and Metal indices leading the tally, gaining 2.1% and 1.9% respectively.

India's WPI for July came in at a 5-month low of 5.19%, easing from 5.43% in June. The figure for May however, was revised upward to 6.18% from 6.01%.

FIIs net bought stocks, index futures and stock futures worth Rs 625 cr, 605 cr and 326 cr respectively. DIIs were net buyers to the tune of Rs 136 cr.

Rupee appreciated 46 paise to close at 60.76/$.

After two months of double-digit growth, India's exports expanded at a slower 7.3% to $27.7 billion in July. Imports rose 4.3% to $40 bn, leaving the trade deficit at $12.2 bn, against $11.8 bn in May.

For the week, Sensex and Nifty gained 3% each with Nifty registering its highest weekly close ever.

OUTLOOK

Today morning Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

Ever since Nifty crossed 7690 hurdle on Tuesday, we have been working with the target of 7840. The benchmark rose to 7797 through the rest of the week and finally settled at 7792.

7840 continues to be the immediate target above which 7880, where the trendline adjoining recent tops on the daily chart is placed, would be the next hurdle to eye.

Immediate support on the hourly chart has moved up to 7675, with the stop loss of which trading longs should be held on to.

PRUDENT MORNING MANTRA - 14.08.2014

NIFTY EKES OUT GAINS WHILE BROADER MARKET BLEEDS; STAY LONG WITH THE STOP LOSS OF 7645

WORLD MARKETS

US indices gained between 0.6%-1% on the back of surging tech, airline and biotech shares.

Retail sales for July came in flat, missing estimates and marking the weakest reading since January.  Business inventories in rose 0.4% in June after gaining 0.5% in May.

European markets climbed between 0.4%-1.4%. June industrial output numbers for the euro zone showed a fall of 0.3% from the month before. In the Uk, jobless rate fall to 6.4% in the three months through June.

In Ukraine, Kiev denounced Russia's dispatch of a humanitarian aid convoy as an act of unbounded cynicism serving pro-Russian separatists and said the trucks would not be allowed to pass. However, calming words from Polish Foreign Minister gave investors some comfort along with reports that the convoy will travel under cooperation with the Red Cross.

In the Middle East, Israel and Palestinian factions agreed to extend the truce for five more days on Wednesday in order to reach a lasting agreement to end the fighting in Gaza, Reuters reported.

Nymex crude rose 22 cents to $97.6 a barrel, while gold fell $4 to $1314 an ounce.

                                                             

AT HOME

Amidst a heavy sell-off in the broader market, benchmark indices managed to end marginally higher after a choppy trading session. Sensex gained 38 points to settle at 25919 while Nifty finished at 7740, up 12 points. BSE mid-cap and small-cap indices plunged 1.7% and 2.4% respectively. BSE FMCG index soared 2.2%, becoming top gainer among the sectoral indices, followed by 0.8% rise in IT and Healthcare indices. Realty index collapsed 5.2%, leading the losers' tally, followed by 2.6% cut in Capital Goods index.

FIIs net bought stocks, index futures and stock futures worth Rs 718 cr, 718 cr and 248 cr respectively. DIIs were net buyers to the tune of Rs 22 cr.

Rupee depreciated 14 paise to close at 61.21/$.

Tata Steel reported a worse-than-expected 70.4% dip in consolidated net profit at Rs 337.3 for the June quarter, impacted by provision for impairment of non-current assets, higher tax expenses and interest cost. Consolidated income grew by higher-than-expected 11% to Rs 36427 cr. Operating margins expanded by 53 bps to 11.73%, lower than the estimated 12.2% figure.

ONGC reported lower-than-estimated 19% rise in net profit at Rs 4782 cr impacted by higher exploration cost written off and depreciation cost. Net sales rose 13% to Rs 21851 cr. EBIDTA margin expanded by 470 bps to 40.5%, but were lower than the estimated 53% figure.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had mentioned that having crossed the tredline resistance on the daily chart, Nifty is headed to 7840, the all-time high made last month. That continues to be the view. Hold on to trading longs with the stop loss of 7645.

India's WPI for July will come out today and is expected to ease to 5.16% from 5.43% in June.

Hindalco and Cipla will report their quarterly earnings today.

Indian markets will remain shut tomorrow for Independence Day.

PRUDENT MORNING MANTRA - 13.08.2014

IIP, CPI DISAPPOINT; NIFTY TAKES OUT 7690 HURDLE

WORLD MARKETS

US indices ended modestly lower, breaking two-day rising streak, on persisting geopolitical worries.

Media reports suggested that Russia has sent a 280 truck convoy to Ukraine carrying humanitarian aid but Kiev has said it would not allow the vehicles to cross into its territory. NATO fears the aid may be a disguised bid to invade Ukraine.

European markets, except Spain, ended lower, with DAX leading the tally with 1.2% fall, after ZEW economic expectations for August slumped to 8.6 points, the lowest level since December 2012.

Nymex crude fell 71 cents to $97.4 a barrel. Brent crude fell to $102.65/bbl, a 13-month low in intraday trading.

                                                             

AT HOME

After a gap up opening, benchmark indices traded in a narrow range for better part of the day but spiked up in the late noon trade to end with hefty gains of nearly a percent and half. Sensex surged 362 points to settle at 25881 while Nifty finished at 7727, up 101 points. BSE mid-cap and small-cap indices gained 0.5% each. Except a marginal cut in BSE Teck index, all other sectoral indices ended higher with Auto and Oil & Gas indices leading the tally, rising 1.8% and 1.7% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 371 cr, 1391 cr and 639 cr respectively. DIIs were net sellers to the tune of Rs 40 cr.

Rupee appreciated 9 paise to close at 61.08/$.

India's industrial output, as measured by IIP, rose by lesser than expected 3.4% in June as against 5% growth in May. The figure for May was revised upward to 5% from original 4.7%.

July CPI inflation came in at higher-than-expected 7.96% v/s 7.46% in June. The core CPI however inched lower to 7.42% from 7.45%. Headline figure for June was revised upwards to 7.46% from 7.31%.

BHEL reported worse-than-expected 58.4% dip in June quarter net profit at Rs 193.5 cr. Net sales dropped 20.2% to Rs 5068 cr. Operating margin fell 180 bps to 4.2%.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 15 points lower opening for our market.

In our latest weekly and subsequent daily reports we had mentioned that the trendline adjoining recent tops on the daily charts presents a resistance around 7690, a crossover of which is required to turn the near term view bullish. Nifty surged 101 points yesterday to close at 7727, fulfilling this condition.

Trading longs can be initiated with the stop loss of 7645, which is the immediate support on the hourly chart. 7840, the all-time high made , is the immediate target.

ONGC and Tata Steel will report their quarterly earnings today.

PRUDENT MORNING MANTRA - 12.08.2014

EQUITIES EXTEND GAINS ON EASING GEOPOLITICAL TENSION; IIP, CPI, EARNINGS IN FOCUS AT HOME

WORLD MARKETS

US indices ended with modest gains, extending the gains to second day, on signs of easing in geopolitical tensions.

Russian President Putin said his country is coordinating with the International Red Cross to send humanitarian aid to Ukraine.

In the Middle East, Israel and Hamas agreed on Sunday to an Egyptian proposal for a new 72-hour ceasefire.

Stanley Fischer, the vice chairman of the U.S. Federal Reserve, said that the recoveries in the U.S. and global economies had been "disappointing" thus far, indicating the Fed may not imminently tighten its monetary policy.

Later in the day, U.S. President Obama in a statement  said Iraq made important strides toward rebuffing a militant group with the designation of a new prime minister and urged the formation of an inclusive government to address the needs of all Iraqis.

European markets soared 1%-2%.

                                                             

AT HOME

Benchmark indices, after a gap up opening, traded in a narrow range through the session and finally ended higher by three fourth of a percent, breaking the three-day losing streak. Sensex gained 190 points to settle at 25519 while Nifty finished at 7626, up 57 points. BSE mid-cap and small-cap indices gained 0.6% and 0.8% respectively. BSE Auto index climbed 2.6%, becoming top gainer among the sectoral indices, followed by 1% rise in Realty index.

FIIs net sold stocks worth Rs 163 cr but net bought index futures and stock futures worth Rs 162 cr and 498 cr respectively. DIIs were net buyers to the tune of Rs 234 cr.

Rupee depreciated 3 paise to close at 61.17/$.

GAIL reported 23% dip in June quarter net profit at Rs 621 cr. Net sales rose 3.7% to Rs 13337 cr. Operating margin declined 390 bps to 7.8%.

Tata Motors reported a huge 213% rise in consolidated net profit at Rs 5398 cr driven by strong JLR performance. Consolidated revenue jumped 38% to Rs 64683 cr. Operating margin expanded by 390 bps to 17.2%.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting about 40 points higher opening for our market.

After today's gap up opening, Nifty will be very close to the 7690 resistance where the trendline adjoining recent tops on the daily chart is placed. A crossover of this hurdle is required to turn the near term view decisively bullish.

India's IIP for June will be released today and is expected to show a further improvement in growth to 5.84% from 4.7% in May.

CPI for July too would come out today and is expected to inch up to 7.6% from 7.31% in June.

BHEL, BPCL, Coal India, JP Associate, Sun Pharma and Tata Power will report their quarterly earnings today.