NIFTY HITS RECORD HIGH; STAY LONG WITH THE STOP LOSS OF 8050

NIFTY HITS RECORD HIGH; STAY LONG WITH THE STOP LOSS OF 8050

WORLD MARKETS                             

US indices gained between 0.4%-1.3% yesterday after data showed the U.S. economy grew more than expected last quarter.

US third-quarter GDP rose 3.5%, beating expectations. Another report had the number of Americans filing for jobless benefits rising last week, but the four-week average fell, illustrating ongoing improvement in the labor market.

European markets gained between 0.2%-0.7%. The banking sector underperformed, with shares in Greek and Italian banks still struggling following the results of the European Central Bank's stress tests.

Germany's unemployment rate held steady at 6.7% in October, and joblessness fell more than expected. However, inflation data for the country came in slightly lower than forecast.

Dollar index, after rising to 86.49, settled at 86.15. Gold plunged 2.2% to $1199 an ounce; Nymex crude fell 1.3% to $81.1 a barrel.

AT HOME

After a flattish start, benchmark indices saw a sustained upward move through the session to end higher by nearly a percent, hitting record highs and extending the winning streak to third straight day. Sensex surged 248 points to settle at 27346, marking a fresh closing high. Nifty gained 79 points to close at 8169, just 4 points short of highest closing registered on 8th September. All the BSE sectoral indices ended higher with Realty and IT indices leading the tally, putting on 3.4% and 2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1257 cr, 1286 cr and 531 cr respectively. DIIs were net sellers to the tune of Rs 94 cr.

Rupee depreciated 10 paise to close at 61.45/$.

Maruti reported better-than-estimated 28.8% growth in September quarter net profit at Rs 863 cr. Revenues rose 17.5% to Rs 12304 cr. Operating profit jumped 15% to Rs 1521 cr but margin declined 20 bps to 12.4% which were slightly lower than estimates.

ICICI Bank met street expectations on profit and net interest income front but its asset quality and provisions hit in the quarter ended September 2014. Net profit rose 15.2% y-o-y to Rs 2709. NII too grew 15.2% to Rs 4657 cr. Gross NPA rose 7 bps sequentially to 3.12% and Net NPAs climbed 9 bps to 0.96%.

Bharti Airtel reported better-than-expected 24.8% q-o-q rise in September quarter net profit at Rs 1382 cr. Revenue declined 0.5% to Rs 22845 cr, which was in-line with estimates. Operating profit declined 0.3% to Rs 7705 cr but margin expanded to 33.7% from 33.62%.

OUTLOOK

Today morning Asian markets are trading with gains ranging from 0.5%-1.5% and SGX Nifty is suggesting about 50 points higher opening for our market.

We have been bullish on Nifty ever since it crossed 7928 on 21st October, which broke the lower-top lower-bottom formation on the daily chart. Nifty has seen strong upmove since then and yesterday touched a fresh all-time high of 8181, achieving the upside targets given by us and vindicating our view.

The momentum continues to be positive and more importantly Nifty has given a fresh breakout on the daily chart after a consolidation of nearly a month and half, which suggests much higher levels in the days to come.

"Stay long with a trailing stop loss" continues to be the advice. 8260-8300 is the next target area on the way up. Immediate support on the hourly chart has moved up to 8050, with the stop loss of which trading longs should be held on to.

ITC, M & M and NMDC will report their quarterly earnings today.