NIFTY ACHIEVES 8560 TARGET; STAY LONG WITH THE STOP-LOSS OF 8460

NIFTY ACHIEVES 8560 TARGET; STAY LONG WITH THE STOP-LOSS OF 8460

WORLD MARKETS                             

On Wednesday, Dow and S & P 500 climbed 0.8% each while Nasdaq soared 1%, with the Dow breaking above 20,000 for the first time.

Yesterday, Dow gained 0.2% while S & P 500 and Nasdaq ended marginally lower.

The U.S. IHS Markit services PMI showed the sector expanded at its fastest pace since 2015, hitting 55.1 from 53.9. Initial jobless claims jumped 22,000 to 259,000, but have remained below 300,000 for 99 weeks straight, their longest stretch since 1970. New home sales fell 10.4% in December.

Ford matched earnings estimates, while topping sales expectations. Caterpillar beat earnings estimates but fell short of revenue expectations.

Dollar index rose abotu 0.6% to 100.53. U.S. Treasury yields fell slightly, with the benchmark 10-year note yield hovering around 2.50% percent, while the short-term two-year note yield traded at 1.22%. Gold fell $8 to $1191 per ounce.

US oill rose 2% to $53.78 per barrel. Brent added 2.1% to $56.24.

European markets, except a 0.4% higher DAX, lost upto 0.7%. Britain's economy expanded 0.6% Q-o-Q and 2.2% y-o-y in the October-December quarter.

AT HOME

Bulls continued to call the shot as Sensex and Nifty soared 1.2% and 1.5% respectively on Wednesday, extending the winning streak to third straight day and closing at the highest level since 1st November, 2015. Sensex added 333 points to settle at 27708 while Nifty finished at 8603, up 127 points. BSE mid-cap and small-cap indices rose 0.9% each. BSE Finance index climbed 2.6%, becoming top gainer among the sectoral indices, followed by 2.3% rise in Bankex and Consumer Durable index.

FIIs net bought stocks, index futures and stock futures worth Rs 1379 cr, 567 cr and 1441 cr respectively. DIIs were net buyers to the tune of Rs 383 cr.

Maruti reported 47.5% growth in quarterly net profit at Rs 1744 cr. Revenue rose 12.4% to Rs 16624 cr. Operating profit was up 16% at Rs 2489 cr and margin expanded by 50 bps to 15% y-o-y. On q-o-q basis, margin contracted by 230 bps on the back of higher discounts and raw material costs.

Kotak Mahindra Bank's standalone net profit shot up 39% to Rs 880 cr. NII grew by 16% to Rs 2050 cr. Net interest margin improved 2 bps q-o-q to 4.49%. Asset quality improved sequentially. Gross NPA ratio improved 7 bps to 2.42% and net NPA ratio improved 13 bps to 1.07%.

Wipro results disappointed with the dollar revenue down 0.7% to USD 1903 mn and constant currency growth of 0.6%. Rupee revenue rose half a percent to Rs 13196 cr with EBIT rising 3.4% to Rs 2416 cr and margin expansion of 50 bps. Company also slashed fourth quarter guidance to 1-2%. Consolidated net profit grew by 1.9% to Rs 2110 cr.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is trading around, which is about 50 points higher than Wednesday's close of February Nifty future.

After Nifty closed above the 8440 hurdle on Tuesday, we had said that 8560 the 61.8% retracement level of the 8970-7894 fall, is the upside target to eye.

Nifty soared 127 points on Wednesday to close at 8603, achieving the target mentioned above and vindicating our view.

8740, the top made in October 2016, is the next target to eye on the way up.

8460, the erstwhile resistance, would now act as immediate support, with the stop-loss of which trading longs should be held on to.