NIFTY BREAKS OUT OF 8-DAY CONSOLIDATION; 9470 NEXT

NIFTY BREAKS OUT OF 8-DAY CONSOLIDATION; 9470 NEXT

WORLD MARKETS                             

While Dow fell 0.2%, S & P 500 and Nasdaq gained 0.1% each with S & P 500 and Nasdaq posting a record close and Nasdaq posting a 5-day winning streak after digesting Trump's firing of FBI Director James Comey.

The White House claimed the sudden termination of Comey's contract was over his handling of Hilary Clinton's emails. However, Democrats said the decision was most likely as a result of the FBI investigating alleged links between the Trump campaign and Russia.

In economic news, mortgage applications rose 2.4% on a seasonally adjusted basis last week. Import prices rose 0.5%, more than expected.

Oil bounced back more than 3% with WTI and Brent at $47.33 and $50.54 respectively after U.S. inventories fell 5.25 mn barrels, their largest one-week drop this year.

Dollar index extend the upmove, rising about 0.1% to 99.63.

European markets gained upto 0.6% with FTSE on top.

AT HOME

Benchmark indices soared a percent in today's trade to close at fresh record high. Sensex added 315 points to settle at 30248 while Nifty finished at 9407, up 90 points. BSE mid-cap and small-cap indices gained 0.9% and 0.8% respectively.  Except a 0.4% and 0.2% lower IT and Realty indices respectively, all the BSE sectoral indices ended in green with Telecom index leading the tally, up 4.6%, followed by 1.8% rise in FMCG index.

FIIs net bought stocks and stock futures worth Rs 893 cr and 383 cr respectively but net sold index futures worth Rs 395 cr. DIIs were net sellers to the tune of Rs 230 cr.

Currency market was shut on account of "Buddha Purnima".

Hero MotoCorp reported 13.9% y-o-y dip in quarterly net profit at Rs 718 cr. Total income fell 7% to Rs 7488 cr. EBIDTA fell 19.5% to Rs 957.6 cr and margin was 13.9%, down from 15.8%.

OUTLOOK

Today morning, except about half a percent lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 25 points higher start for our market.

At the risk of repeating, while Nifty was in a consolidation mode for eight consecutive sessions, we had maintained our positive bias and had said that once 9370 hurdle is taken out, 9470 would be the next upside target.

Nifty finally broke out of this long consolidation yesterday, touched a high of 9415 and closed at 9407.

9470 continues to be immediate upside target. Immediate support on the hourly chart has now moved up to 9330, with the stop-loss of which long positions should be held on to.

HCL Tech and Asian Paints will report their quarterly earnings today. HCL Tech is expected to show a dollar revenue growth of 4% but around 40 bps dip in margin. Markets would watch out for FY18 guidance. In case of Asian Paint, key parameter, volume growth, is expected between 7-8%.