8970 CONTINUES TO BE MAJOR TARGET; 8680-8700 IMMEDIATE SUPPORT

8970 CONTINUES TO BE MAJOR TARGET; 8680-8700 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.3%-0.5% on Friday, posting yet another record high on continued optimism over Trump's promised tax plans. Energy, materials and industrials lead the advancers.

WTI crude rose 1.6% to $53.86 per barrel after the International Energy Agency reported that OPEC members' cuts in January equated to 90% of the agreed volumes.

Import prices rose 0.4% in January, more than the expected 0.2% increase. Export prices rose 0.1% last month, in line with estimates. Preliminary consumer sentiment for February came in at 95.7, below the expected 98.5.

U.S. 10-year note yield rose to 2.409%t, while the short-term two-year yield hovered around 1.2%. Dollar index gained about 0.1%.

Main European markets ended with gains of upto 0.4% but Italy and Spain fell 0.4% and 0.6%.

Chinese trade figures topped expectations.

For the week, US equities added 0.8%-1.2%. In Europe, CAC and DAX rose 0.1% each while FTSE climbed 1%. In Asian, Nikkei soared 2.4% while Shanghai and Hang Seng were up 1.8% and 1.9% respectively.

AT HOME

Sensex ended flat while Nifty finished 0.2% higher after a rangebound but choppy session. Sensex settled at 28334, up 5 points while Nifty added 15 points to finish at 8794. BSE mid-cap index fell 0.3% while small-cap index gained 0.1%. BSE IT and Teck indices climbed 2.1% and 1.6% respectively, becoming top gainers among the sectoral indices while Healthcare and FMCG indices were the top losers, down 0.9% and 0.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 505 cr, 243 cr and 76 cr respectively. DIIS were net sellers to the tune of Rs 225 cr.

Rupee appreciated 4 paise to end at 66.88/$.

SBI reported a 134% y-o-y jump in Q3 net profit at Rs 2610 cr. NII grew by 7.7% to Rs 14755 cr. Net interest margin fell 19 bps y-o-y and 2 bps q-o-q to 3.03%. Gross NPA ratio rose to 7.23% from 7.14% and Net NPA ratio inched up to 4.24% from 4.19% q-o-q. Fresh slippages stood at Rs 10400 cr as against Rs 11900 cr q-o-q.

M & M reported 5.7% dip in net profit at Rs 801 cr. Revenue rose 1.2% to Rs 10587 cr. Operating profit fell 0.1% to Rs 1449 cr and margin contracted by 20 bps to 13.7%.

BoB reported a net profit of Rs 253 cr against loss of Rs 3342 cr in same quarter last year. NII grew by 16% to Rs 3134 cr. Gross NPA as a percentage of gross advances increased 5 bps to 11.40% but net NPAs declined 3 bps to 5.43% q-o-q. Slippages rose sharply to Rs 4100 cr from Rs 2800 cr.

Idea posted a consolidated net loss of Rs 386 cr against a profit of Rs 90 cr in previous quarter. Consolidated revenue fell 7% to Rs 8663 cr. Operating profit slipped 10.4% q-o-q to Rs 2165 cr and margin contracted by 100 bps to 25%.

OUTLOOK

North Korea fired a ballistic missile into the sea on Sunday morning, the first such test since President Trump was elected.

Data from Japan showed that economy grew at an annualized rate of 1% in the fourth-quarter, supported by solid exports and capital expenditure.

Today morning, Asian markets are trading with gains of 0.4%-0.6% and SGX Nifty is suggesting about 30 points higher start for our market.

At the risk of repeating, we have been working with a major target of 8970 after 61.8% retracement level of the 8970-7894 fall, placed at 8560, was taken out and have been advising holding on to trading longs with a trailing stop-loss.

The benchmark, on Friday, touched a high of 8822 before closing at 8794 and is set to open higher today.

8970 continues to be the major upside target to eye. On the way down 8700-8680 continues to be immediate support area, with the stop-loss of which, trading longs can be held on to.

Hindalco and HPCL will report their quarterly earnings today.

CPI for January will be released today and is expected to be at 3.21%, down from 3.41% in December. However, core inflation is expected to be at 5% as against 4.9%.