NIFTY EXTENDS UPMOVE TO FOURTH DAY; STAY LONG WITH THE STOP LOSS OF 8700

NIFTY EXTENDS UPMOVE TO FOURTH DAY; STAY LONG WITH THE STOP LOSS OF 8700

WORLD MARKETS                             

US indices gained between 0.3%-0.8% on Friday with the Dow above 18,000 and S&P 500 setting a new record as firming oil prices sent the energy sector higher. Thursday's news of a cease-fire deal between Russia and Ukraine following months of violence between pro-Russian rebels and the Ukraine military also continued to a positive catalyst.

Nymex oil surged $1.57 or 3.10% to $52.78 a barrel while brent oil traded above. the number of oil rigs in the United States fell to the lowest level since August 2011.

Media reports suggested that Greek Prime Minister agreed to meet with representatives from the European Union, the European Central Bank and the International Monetary Fund, ahead of Monday's key Eurogroup meeting on debt talks.

Meanwhile, the European Central Bank allowed Greek banks to access extra emergency financing from the Bank of Greece because deposit outflows have increased and to ensure they have liquidity while discussions continue in Brussels next week.

Economic data had US consumer sentiment dropping 4.6% in February, missing expectations. U.S. import prices fell 2.8% last month, their biggest drop in six years as the cost of petroleum and a range of other goods fell, a sign that domestic inflation pressures could remain muted for a while. It was the seventh straight month of declines in import prices.

European markets gained between 0.4%-1.7% after fourth-quarter euro zone GDP rose 0.3% compared to the last quarter, which managed to beat expectations. Germany's number grew more than expected, expanding by 0.7% quarter-on-quarter, which bolstered hopes that the euro zone's largest economy is back on track.

AT HOME

It was a strong end to the week as benchmark indices soared a percent on Friday, extending the winning streak to fourth straight day and ending at the highest level since 30th January. Sensex settled at 29095, up 290 points while Nifty finished at 8806, up 94 points. BSE mid-cap and small-cap indices gained 0.7% and 0.4% respectively. Except a 1% and 0.2% cut in BSE Realty and Oil & Gas indices respectively, all other sectoral indices ended higher with FMCG and Healthcare indices leading the tally, putting on 1.8% and 1.6% respectively.

SBI soared after asset quality showed stability for the quarter ended December 2014. Net profit however rose lower-than-expected 30.3% to Rs 2910 cr, impacted by higher provisions. NII rose 9% to Rs 13777 cr, which was higher-than-expected. Gross NPA stood at 4.90 as against 4.89% in the previous quarter. Net NPA stood at 2.80% vs 2.73%.

M&M beat street expectations on bottom-line and top line front while operating performance was in line. Consolidated net profit grew 5.7% year-on-year to Rs 967 crore supported by an exceptional gain of Rs 299 crore. Total income fell 9.7% to Rs 9260 cr due to lower sales volumes. Consolidated operating profit was down 24.8% to Rs 1,080 crore and margin dropped 230 basis points to 11.7%

FIIs net bought stocks and index futures worth Rs 390 cr and 1137 cr respectively but net sold stock futures worth rs 430 cr. DIIs were net buyers to the tune of Rs 96 cr.

Rupee appreciated 11 paise to end at 62.195.

India's trade deficit for January fell to an 11-month low of $8.3 bn as exports contracted by 11.9% to $23.88 bn while imports fell 11.4% to $32.2 bn.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 10 points higher opening for our market.

In Friday's report we had mentioned that having crossed 8650-8700 resistance area, Nifty is headed to 8800, which is the 61.8% retracement level of the recent 8997-8470 fall.

The benchmark touched a high of 8822 before closing at 8805, achieving the target mentioned above. If one looks at the hourly chart, 8840 is the level where two previous tops are placed so that would be the next resistance to eye. Once that is taken out, 8997, the top made on 30th January, would be the next upside target.

On the way down, trendline adjoining recent bottoms on the hourly chart lands support around 8700, with the stop loss of which trading longs should be held on to.