AFTER ECB, PBOC GIVES EQUITIES A REASON TO FLY; TRAIL STOP LOSS TO 8250

AFTER ECB, PBOC GIVES EQUITIES A REASON TO FLY; TRAIL STOP LOSS TO 8250

WORLD MARKETS                             

Dow and S & P 500 climbed a percent while Nasdaq jumped 2.3% on Friday after the Chinese central bank cut interest rates and after three tech giants posted better-than-expected earnings.

In a bid to jump start growth in its stuttering economy, the People's Bank of China cut interest rates by 25 bps to 4.35%, marking the sixth cut since November. The reserve requirement ratio (RRR) was also cut by 50 bps for all banks, taking the ratio to 17.5% for the biggest lenders while banks that lend to agricultural firms and small companies received another 50 bps reduction to their RRR.

Back in the US, earnings from Alphabet, Amazon and Microsoft beat analysts' expectations.

Nymex oil fell 1.7% to settle at $44.60 a barrel.

Dollar index rose 0.5% and euro held at about $1.1020.

European markets soared 1%-3% with DAX leading the tally. Eurozone composite purchasing manager's index (PMI) came in at 54.0, up from 53.6 in September.

For the week, US indices climbed 2%-3% while European markets gained 1%-7% with DAX and CAC leading the tally.

AT HOME

After a gap up opening, Sensex and Nifty traded in a narrow range through the session and finally ended higher by 0.7% and 0.5% respectively. Sensex settled at 27471, up 183 points while Nifty gained 44 points to finish at 8295. BSE mid-cap and small-cap indices however lost 0.3% each. BSE Bankex and FMCG indices climbed 1.3% and 1.1% respectively, becoming top gainers among the sectoral indices while Capital Goods and Auto indices were the top losers, down 1.6% and 0.7% respectively.

FIIs net bought stocks and index futures worth Rs 229 cr and 1850 cr respectively but net sold stock futures worth Rs 453 cr. DIIs were net sellers to the tune of Rs 156 cr.

Rupee appreciated 30 paise to end at 64.83/$.

For the week, Sensex and Nifty gained 0.9% and 0.7% respectively, extending the winning streak to fourth straight week.

OUTLOOK

Today morning Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 60 points higher opening for our market.

Readers would recall that ever since Nifty regained the higher-top higher-bottom formation on the daily chart by crossing 8055 on 5th October, we have been working with a major target of 8380, where the 200-DMA is placed.

But considering the fact that Nifty has runup nearly 10% from the bottom of 7540 made in early Septmeber and another major hurdle in the form of 34-week moving average is placed around 8320, we have been advising booking some profit in trading longs in 8320-8380 region.

Nifty, on Friday, after touching a high of 8328, eased to end at 8295. A gap up opening today would take it closer to 8350.

A decisive crossover of 8380 would open up the space for the further upside till about 8500, where the trendline adjoining recent bottoms on the weekly chart is placed.

After today's gap up opening, immediate support on the hourly chart would have moved up to 8250, which should serve as the stop loss for trading longs.

HDFC and Bharti Airtel will report its quarterly earnings today.