NIFTY ON TRACK TO ACHIEVE 8561 TARGET

NIFTY ON TRACK TO ACHIEVE 8561 TARGET

WORLD MARKETS                             

US indices ended marginally lower ahead of an impending Greek parliament vote.

Federal Reserve Chair Janet Yellen kicked off her two-day testimony before Congress yesterday, saying that "We're close to where we want to be and we now think the economy can not only tolerate but needs higher rates". She reiterated last Friday's statement that the central bank is on pace to raise rates this year if the economy evolves as expected, adding that unemployment should decline but inflation remains below the Fed's target.

U.S. June producer price report showed an increase of 0.4% in June, while the July Empire State Survey came in at 3.9, as against June's negative 2 read.  June industrial production showed an increase of 0.3%, with capacity utilization at 78.4%, a tad higher from May. The Fed's Beige Book showed that the U.S. economy continued to expand at a moderate to modest pace through June.

Fontline European markets ended modestly higher while Italy and Spain gained 1.3% and 0.7% respectively.

Earlier Shanghai Composite ended with deep cut of 3% despite reporting a better-than-expected 7% GDP growth for the April-June. Industrial output for June rose 6.8%, beating a forecast for 6.0%, while last month's retail sales climbed 10.6%, ahead of the forecast for 10.2%. 

Dollar index gained about half a percent, with the euro falling below $1.10. Nymex oil plunged $1.63 or 3.1% to $51.41 a barrel. Gold fell $6 to $1147 an ounce after hitting an eight-month low of $1141.

AT HOME

Sensex and Nifty soared 1% and 0.8% respectively in yesterday's trade with Nifty closing at the highest level since 17th April. Sensex settled at 28198, up 265 points while Nifty rose 70 points to finish at 8524. BSE mid-cap and small-cap indices gained 0.1% and 0.5% respectively. Except a 1.2% cut in BSE Consumer Durable index, all the sectoral indices ended in green with Auto and IT indices leading the tally, climbing 1.4% and 1.2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 408 cr, 1088 cr and 372 cr respectively. DIIs were net sellers to the tune of Rs 50 cr.

Rupee depreciated 2 paise to end at 63.41/$.

ZEE Entertainment reported better-than-expected 15.8% rise in April-June quarter net profit at Rs 243.8 cr. Consolidated revenue increased by 27% to Rs 1340 cr. Advertising revenues rose 25.4%. Consolidated operating margin stood at 23.2% as against 29.3% y-o-y but was better-than-estimates.

After the launches of 'Make in India' and 'Digital India,' the Narendra Modi-led NDA government's latest brainchild, National Skill Development Mission was inaugurated by the Prime Minister yesterday. The ambitious project seeks to provide the institutional capacity to train a minimum of 300 million skilled people by the year 2022.

India's trade deficit in June stood at USD 10.83 bn as against 10.41 bn in May. Exports stood at $22.89 bn, down 16% y-o-y and flat month-on-month. Imports dipped 13.4% y-o-y to $33.12 bn and up slightly from $32.75 in May.

OUTLOOK

Greek Parliament finally passed strict austerity measures needed to secure a debt deal from its creditors early Thursday morning local time. The verdict comes ahead of Greek payment due to the European Central Bank (ECB) on Monday.

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

We have been positive on Nifty ever since immediate hurdle of 8440 was crossed on Monday and have been working with initial target of 8561, the top made last week. The benchmark touched a high of 8531 before closing at 8524 and is on track to achieve 8561 target. Above 8561, 8670 the 61.8% retracement level of the 9119-7940 fall, would be the next target.

Immediate support on the hourly chart has moved up to 8400, with the stop loss of which trading longs should be held on to.

An ECB rates decision is due today, with President Mario Draghi likely to face questions on a decision on Emergency Liquidity Assistance (ELA) for Greece. The ELA is a program of emergency loans for Greek lenders to keep them solvent and now that the Greek parliament has approved the necessary reforms, the central bank is widely expected to increase funding.