NIFTY ON TRACK TO ACHIEVE 8655 TARGET; TRAIL STOP LOSS TO 8475

NIFTY ON TRACK TO ACHIEVE 8655 TARGET; TRAIL STOP LOSS TO 8475

WORLD MARKETS                             

US indices gained 0.5%-0.7% yesterday with the Dow and S & P 500 closing at an all-time high for the third and fourth consecutive day respectively.

In the key corporate earnings JPMorgan Chase beat estimates and BlackRock was in line with expectations.

Weekly jobless claims showed no change week over week. June reading of the producer price index showed an increase of 0.5%, above the expected 0.3% rise.

Oil prices bounced back with U.S. crude settling 2.1% higher at $45.68 a barrel. Gold fell $11 to $1332 per ounce.

British pound rose to a two-week high of $1.3480, following the Bank of England's (BOE) decision to leave its interest rates on hold, despite market expectations for a cut. There were, however, strong hints of easing in August.

European markets, except a 0.2% lower FTSE, gained 0.9%-1.4%.

AT HOME

After trading in a narrow range in the morning session, benchmark indices spiked up in noon trade to end half a percent higher and scale fresh 11-month high. Sensex added 127 points to settle at 27942 while Nifty finished at 8565, up 45 points. BSE mid-cap and small-cap indices rose 0.5% and 0.7% respectively. BSE Consumer Durable index and Bankex climbed 2.2% and 1.5% respectively, becoming top gainers among the sectoral indices while Healthcare index was the top loser, down 0.3%, followed by 0.2% cut in IT and Realty indices.

FIIs net bought stocks and index futures worth Rs 870 cr and 461 cr respectively but sold stock futures worth Rs 465 cr. DIIs were net sellers to the tune of Rs 874 cr.

Rupee appreciated 14 paise to end at 66.91%.

India's wholesale price index (WPI) rose 1.62% y-o-y in the month of June, compared to 0.8% in May, and ahead of expectations of 1.15%.

TCS reported better-than-expected profit and operational performance in April-June quarter while revenue was in-line. Dollar revenue grew 3.7% q-o-q to USD 4362 mn and constant currency growth was 3.1%. Rupee revenue increased 3% to Rs 29305 cr. Net profit fell 0.4% to Rs 6318 cr. EBIT fell 0.9% to Rs 7347 cr and margin contracted by 95 bps to 25.1%. Profit and margin were expected to fall 4.7% and 135 bps respectively.

OUTLOOK

China's June quarter GDP growth has come in at 6.7% same as that of previous quarter but a tad higher than expected 6.6% mark. June industrial output growth stands at 6.2%, up from May's 6% and expected 5.9% figure. July retail sales are up 10.6%, beating previous reading and expected figure of 10%.

Asian markets are trading with gains of upto a percent with Nikkei on the top and SGX Nifty is suggesting about 30 points higher start for our market.

Nifty gained 45 points yesterday to end at 8565 and a positive start today will take the benchmark closer to 8600 mark and also to our indicated target of 8655, which we have been working with ever since 8243 hurdle was taken out on weekly basis on 1st July.

Immediate support on the hourly chart has moved up to 8475, which should serve as the new stop loss for trading longs.

Reliance Industries and Infosys will report their quarterly earnings today.

Infosys is expected to post dollar revenue growth of 4.1% q-o-q at USD 2547 mn. Margins are expected to fall 165 bps to 23.85% 165 bps on partial wage hike which might lead to 4.2% dip in net profit at Rs 3447 cr. FY17 constant currency dollar revenue growth guidance of 11.5%-13.5% is likely to be maintained.

In case of RIL, profit is expected to fall 11.2% q-o-q to Rs 6500 cr as GRMs are expected to come down to $9.8/bbl from $10.8/bbl.