8845 CONTINUES TO BE NEXT MAJOR TARGET; 8610 CONTINUES TO BE IMMEDIATE SUPPORT

8845 CONTINUES TO BE NEXT MAJOR TARGET; 8610 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow and S & P 500 ended marginally in the green while Nasdaq rose 0.25% to close at fresh record high yesterday

US oil fell 0.6% to $42.77 a barrel and Brent lost a percent to $44.98 after preliminary data from the American Petroleum Institute showed U.S. crude stockpiles rose by 2.1 million barrels during the week to August 5, as against expectation of a 1 million-barrel drawdown. OPEC yesterday said an "informal meeting" between member countries will take place on the sidelines of the International Energy Forum in Algeria next month.

On the data front, second-quarter U.S. productivity, as against expectation of a 0.4% rise, fell unexpectedly by 0.5%. Wholesale inventories for June rose 0.3%, with economists expecting an unchanged reading.

Dollar index fell 0.24%. Gold gained $5 to $1347 an ounce.

European markets climbed 0.3%-2.5% with DAX leading the tally after several major earnings that beat expectations. British pound fell 0.3% to hit a one-month low against the dollar on signals that the Bank of England could cut rates further and boost bond purchases if the economic downturn in the U.K. deepened.

AT HOME

After a flattish start, benchmark indices plunged nearly a percent from top of the day but recouped nearly half of the losses in the late noon trade to end lower by about four tenth of a percent. Sensex lost 97 points to settle at 28085 while Nifty finished at 8678, down 33 points. BSE mid-cap and small-cap indices lost 0.4% each. Except a 0.4% higher Consumer Durable index, all the sectoral indices ended in red with Telecom and Oil & Gas indices leading the losses, down 1.2% and 0.9% respectively.

FIIs net bought stocks and index futures worth Rs 144 cr and 156 cr respectively but net sold stock futures worth Rs 1122 cr. DIIs were net sellers to the tune of Rs 610 cr.

Rupee ended unchanged at 66.84/$.

Outgoing RBI Governor Raghuram Rajan, kept the repo rate or the key policy rate unchanged at 6.5% as expected due to hardening of inflation. He however said that the central bank maintains an accommodative stance and will continue to emphasis the adequate provision of liquidity. The statement mentioned risks to five per cent inflation target of March 2017 continue to be on the up side. Mr. Rajan said he hopes the next policy would be conducted under monetary policy committee.

Lupin plunged after bottomline and topline beat estimates but operational performance was a miss. Consolidated net profit rose 55% to Rs 882 cr and revenue grew 40.7% to Rs 4439 cr. Operating profit shot up 58.6% to Rs 1308 cr and margin expanded by 33 bps to 29.46%.

OUTLOOK

Today morning Nikkei is down about half a percent, other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally higher start for our market.

After Nifty crossed the immediate hurdle of 8630 on Friday, we have been working with targets of 8711, followed by 8845. The benchmark after touching a high of 8728, eased to end at 8678.

While Nifty did cross the 8711 hurdle on intraday basis, it has been finding it difficult to close above it. Once 8711 is taken out decisively, 8845 would be the next target as mentioned above.

8610 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.

M & M will report its quarterly earnings today.