ASIA MIRRORS US GAINS; 7422, 7690 KEY LEVELS FOR NIFTY
WORLD MARKETS
US indices surged between 0.8%-1.2% on Friday with the Dow and S & P 500 registering the single largest daily gain in five months, on signals of reduced tensions in the Russian-Ukraine crisis and as Wall Street viewed American military moves in Iraq as limited.
Media reports suggested that Russia had ended military exercises near the Ukrainian border.
The U.S. launched airstrikes against Iraqi militants on Friday, in its first attack of this kind since the military pulled out in 2011. This came directly after the U.S. began an aid drop on to Iraqi civilians in the northwest of the country.
Economic data had nonfarm productivity rebounding more than expected in the second quarter, with a drop in labor costs pointing to still-tame wage pressure. The Commerce Department reported wholesale inventories rose less than expected in June.
European markets ended mixed with CAC, DAX and FTSE ending lower while Italy and Spain saw modest gains. Italy gained after a new constitutional reform package was given the green light by policymakers. Germany's trade balance for June showed imports grew at their fastest rate for nearly four years. Meanwhile, industrial production in France rose more than expected in June.
Earlier China posted its biggest-ever monthly trade surplus of $47.3 bn for July as exports surged 15% while imports fell 1.6%
Nymex crude rose 31 cents to $97.6 a barrel. Gold lost 0.1% to $1311 an ounce.
For the week, US indices gained four tenth of a percent while European markets lost between 1.3%-4.8%.
US President Barack Obama on Saturday said U.S. airstrikes have destroyed arms that Islamic State militants could have used against Iraqi Kurds, but warned there was no quick fix to the Iraqi crisis. Over in Gaza, Israel and the Palestinians agreed on Sunday to an Egyptian proposal for a new 72-hour ceasefire in the region.
AT HOME
On Friday, after a gap down opening, benchmark indices drifted further lower through the session to end with deep cut of a percent, extending the losing streak to third day and closing at the lowest level since 15th July. Sensex lost 260 points to settle at 25329 while Nifty finished at 7568, down 80 points. BSE mid-cap and small-cap indices plunged 2.1% respectively. Except a 0.1% and 0.05% rise in BSE FMCG and Healthcare indices, all other sectoral indices ended in red with Realty and Metal indices leading the tally, falling 3.9% and 3.2% respectively.
FIIs net sold stocks, index futures and stock futures worth Rs 504 cr, 2720 cr and 270 cr respectively. DIIs were net buyers to the tune of Rs 456 cr.
Rupee appreciated 8 paise to close at 61.14/$.
SBI reported better-than-expected 3.3% y-o-y rise in June quarter net profit at Rs 3349 cr. Gross NPAs improved 5 bps sequentially to 4.9% but net NPA ratio deteriorated 7 bps to 2.66%.
M & M reported 4.3% growth in net profit at Rs 896.4 cr driven by operational performance. Consolidated revenue declined to Rs 10823 cr from 10943 cr y-o-y. Operating margin improved 50 bps to 14.3%.
For the week Sensex and Nifty lost 0.4% and 0.6% respectively, extending the losing streak to second week.
OUTLOOK
Today morning, Nikkei is up nearly 2%, other Asian markets are trading with gains in the vicniity of half a percent and SGX Nifty is suggesting about 40 points higher opening for our market.
Last week, after getting resisted at our indicated 7750 level, Nifty subsequently plunged to end at 7568. By closing below the immediate previous bottom of 7593, Nifty has confirmed a lower-top lower-bottom formation on the daily chart. The nearest downside target to watch on the way down is 7422, which is the bottom made in July.
The trendline adjoining two recent tops on the daily chart presents a resistance around 7690, a crossover of which is required to bring bulls back in the game.
India's trade data for July would be released today. Tata Motors and GAIL will report their quarterly earnings.
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