7600 NEXT HURDLE ABOVE 7503; 7350 CONTINUES TO BE IMMEDIATE SUPPORT

7600 NEXT HURDLE ABOVE 7503; 7350 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices nosedived 1.3%-3.2% on Friday as technology stocks plunged and mixed U.S. employment data raised concerns the Federal Reserve may raise rates this year.

Key drags on tech heavy Nasdaq were Apple, Amazon and Facebook, which fell 2.7%, 6.4% and 5.8% respectively. LinkedIn nosedived 44% percent after posting weak guidance on their quarterly results.

U.S. economy added 151,000 jobs in January, which was lower than the expectation of a gain of 190,000. The unemployment rate, however, fell to 4.9% from 5%, while wages rose 0.5%. U.S. trade deficit widened in December amid a rising dollar and a weak global demand.

Nymex oil slipped 83 cents or 2.6% to $30.89 a barrel. Brent fell 40 cents or 1.2% to $34.06 a barrel.

European markets fell 0.9%-2.1%.

For the week, US indices lost 1.6%-5.4% with Nasdaq leading the losses. European markets tumbled 3.9%-7.5%.

AT HOME

It was a good end to the week as benchmark indices gained more than a percent on Friday, extending the winning streak to second consecutive day. Sensex soared 279 points to settle at 24617 while Nifty finished at 7489, up 85 points. BSE mid-cap and small-cap indices gained 1.9% and 1.2% respectively. All the BSE sectoral indices ended higher with Healthcare and Metal indices leading the tally, up 3.4% each.

FIIs net sold stocks and stock futures worth Rs 607 cr and 159 cr respectively but net bought index futures worth Rs 24 cr. DIIs were net buyers to the tune of Rs 760 cr.

Rupee depreciated 10 paise to end at 67.64/$.

For the week, Sensex and Nifty lost 1% each.

Lupin soared 10% after reporting better-than-expected quarterly earnings and positive guidance.  Consolidated net profit fell 12% y-o-y but rose 30% q-o-q to Rs 530. Revenue rose 12% y-o-y and 7% q-o-q to Rs 3556 cr. Operating profit fell 2.5% y-o-y but rose 32% q-o-q to Rs 942 cr and margin contracted 390 bps y-o-y but expanded 500 bps q-o-q to 26.5%.

The commerce ministry on Friday fixed a minimum import price (MIP) for certain steel products to protect domestic manufacturers from cheap imports. The MIP will be valid for the next six months and may be extended, if needed. MIP on ingots and billets has been fixed at USD 362 per tonne, for flat rolled and hot rolled steel at USD 445-500 per tonne and semi-finished steel at USD 341-362 per tonne.

Tata Power's consolidated net profit plunged 88% y-o-y to Rs 24 cr, hit by regulatory expenses of Rs 601 cr and exceptional loss of Rs 187 cr but operational performance was ahead of estimates. Revenue rose 9.4% to Rs 9329 cr. Operating profit shot up 110% to Rs 2472 cr and margin expanded 12.7% to 26.5% as against expectation of Rs 1909 cr and 20.4% respectively.

NSE will introduce United Spirits, PC Jewellers, Tata Elxsi, Cummins, Indo Count, KPIT and Granuels in the derivative segment from February 26.

OUTLOOK

China, Hong Kong and Taiwan will remain shut this week for Lunar new year. Today, Nikkei is down about half a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

In Friday's report we had mentioned that 7350-7490 is the immediate range, a breach of which, on either side, is required to take a fresh view on Nifty.

The benchmark gained 85 points to settle at 7489 on Friday but is slated to open lower today. 

Now, after this weak opening, if the benchmark manages to take out Friday's high of 7503, that would confirm a breakout on the hourly chart and next target to eye in that case would be around 7600, where the 34-DMA is placed.

7350, the bottom made last week, continues to be immediate support a breach of which can take the benchmark back to 7240 bottom.

India's Q4 GDP figure will be released today.