NIFTY SET TO ACHIEVE 7975 TARGET

NIFTY SET TO ACHIEVE 7975 TARGET

WORLD MARKETS                             

While Dow and S & P 500 gained 0.3% each, Nasdaq lost 0.4% yesterday as oil prices rose but tech and consumer discretionary stocks fell after mixed earnings reports.

Nymex oil rose $1.30 or 3.3% to $41.08 a barrel, breaking a four-day losing streak as an oil workers strike in Kuwait nearly halved crude production from the country, overshadowing bearish sentiment following Sunday's failure by oil producers to agree to freeze output levels. Brent added $1.12 to settle at $44.03.

IBM tumble 5.6% despite reporting better-than-expected topline and bottomline as revenue continued to fall and the firm didi not raise its full-year guidance. Netflix plunged 13% after giving lower-than-expected subscriber growth for the second quarter. On the other hand Goldman Sachs rose 2.3% after earnings topped lowered expectations.

Housing starts fell a more-than-expected 8.8% in March to 1.09 million units, the lowest level since October. Building permits dropped 7.7% to a 1.09 million-unit rate last month, the lowest level since March last year.

Dollar index fell about 0.4%. Gold climbed $19 to $1254 an ounce.

European markets rose between 0.5%-2.3% with DAX leading the tally. Germany's ZEW institute's latest Indicator of Economic Sentiment rose for the second month in a row in April to 11.2 points compared to 4.3 in March.

Earlier Nikkei climbed 3.5%, Hang Seng rose 1.3% and Shanghai composite added 0.3%.

AT HOME

Benchmark indices gained about eight tenth of a percent on Monday with Nifty and Sensex extending the winning streak to fifth and fourth straight day respectively and closing at the highest level since 1st January. Sensex added 190 points to settle at 25816 while Nifty finished at 7915, up 64 points. BSE mid-cap and small-cap indices gained 1.3% and 1.1% respectively.  Except a 0.5% and 0.3% cut in Bankex and Auto index respectively, all the BSE sectoral indices closed in green with Realty and IT indices leading the tally, up 4.4% and 3.1% respectively.

India's wholesale inflation for March came in at -0.85% y-o-y as against 0.91% in February.

TCS reported better-than-expected 3.8% q-o-q growth in quarterly net profit at Rs 6341 cr, beating the street estimates for the first time in last seven quarters. Rupee revenue rose 4% to Rs 28449 cr and dollar revenue rose 1.5% to USD 4.2 bn which was in-line. Dollar revenue growth was 2.1% in constant currency. Operating profit grew 1.9% to Rs 7412 cr and margin declined 50 bps to 26.1%. Other income shot up 32% to Rs 917 cr. The company said it expects FY17 to be a strong year as most headwinds seen in FY16 are now behing it.

FIIs net bought stocks, index futures and stock futures worth Rs 978 cr, 631 cr and 1026 cr respectively. DIIs were net sellers to the tune of Rs 313 cr.

Rupee appreciated 9 paise to end at 66.55/$.

OUTLOOK

Today morning, except a half a percent lower Hang Seng, other Asian markets are trading with gains of upto half a percent with Nikkei leading the tally. SGX Nifty is trading around 7970, suggesting about 50 points higher opening when compared to Monday's close of Nifty future.

After Nifty took out the 34-week moving average placed around 7770, we had given targets of 7875, which is 200-DMA, followed by 7975, where previous two tops made in December and January 2015 are placed.

The benchmark soared 64 points on Monday to close at 7915, achieving the 200-DMA target and moving towards the next target of 7975.

A gap-up opening today would see even this target getting achieved. Next major hurdle as well as the target, upon decisive crossover of 7975, would be 8150, where the 20-month moving average is placed. 

7840, the bottom made on Monday would now be the immediate support, with the stop loss of which trading longs can be held on to.

Wipro will report its quarterly earnings today.