STAY LONG WITH THE STOP LOSS OF 7360

STAY LONG WITH THE STOP LOSS OF 7360

WORLD MARKETS                             

US indices, helped by a bounce in oil and some earnings beats, climbed 1.1%-1.8% yesterday.

Energy soared 3.8% percent to lead all S&P 500 sectors higher as Nymex oil, after sliding as much as 7% on Monday, rose $1.11 or 3.7% yesterday to top $32.50 a barrel. Brent climbed 7% to $32.50 a barrel. The gains came amid news OPEC is making renewed calls for rival producers to cut supply alongside its members.

3M closed up 5.2% after posting quarterly results that beat on both the top and bottom line.

US flash Markit Services PMI for January came in at 53.7, versus the final 54.3 December print. Consumer confidence was 98.1, up from a slightly downwardly revised December read of 96.3. S&P/Case-Shiller 20-City Composite rose 5.8% y-o-y in November, topping expectations and faster than the 5.5% increase in October.

European markets gained 0.6%-1.5%. Mining stocks were top performs, as the recovery in both oil and metal prices boosted sentiment.

Copper rose to its highest in two weeks after China's General Administration of Customs said that refined copper imports in December rose 34 percent year-over-year, for the fourth consecutive month of strong imports. Gold added $15 to $1120 an ounce.

Earlier Asian markets closed sharply lower, Shanghai Composite plunging 6.4% to its lowest since late 2014 on the back of renewed concerns about capital outflows and disappointment with central bank action thus far. Nikkei lost 2.4%.

AT HOME

After rising nearly a percent in the initial trade, benchmark indices gave away most of the gains through the session to end higher by just a fifth of a percent. Sensex settled at 24486, up 50 points while Nifty added 14 points to finish at 7436. BSE mid-cap and small-cap indices gained 0.2% and 0.9% respectively. BSE Metal and Consumer Durable indices climbed 1.6% and 1.3% respectively, becoming top gainers among the sectoral indices while Capital Goods and Auto indices were the top losers, down 0.9% and 0.7% respectively.

FIIs net sold stocks and index futures worth Rs 91 cr and 982 cr respectively but net bought stock futures worth Rs 846 cr. DIIs were net buyers to the tune of Rs 308 cr.

Rupee depreciated 20 paise to end at 67.83/$.

HDFC Bank reported in-line with estimated 20% growth in December quarter net profit at Rs 3357 cr. NII climbed at better-than-expected 24% to Rs 7069 cr. Gross NPA ratio deteriorated to 0.97% from 0.91% q-o-q and Net NPA ratio rose 4 bps to 0.29%.

OUTLOOK

Today morning, except a flattish Shanghai, other Asian markets are trading with gains of 0.5%-2.5% with Nikkei leading the tally and SGX Nifty is trading around 7440, which is about 5 points higher than Monday's Nifty future close of 7440.

For past couple of sessions, we have been mentioning that 7440 is the immediate hurdle, a sustained above would generate a "buy" on the hourly chart and 7605-7620 would be the next target area if that happens.

Nifty, after touching a high of 7487 in the initial trade on Monday, slipped to end below 7440 at 7436.

The setup on the hourly chart however has turned positive and traders can hold on to long positions with the stop loss of 7360, which is the immediate support on the hourly chart.

HDFC will report its quarterly earnings today.

The Federal Open Market Committee kicked off its two-day meeting yesterday and is scheduled to release its statement today. No change in rates is expected but markets will be scrutinizing the statement for insight into policymakers' views on the economic environment and the future path of tightening.