11150, 11290 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 11000

11150, 11290 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 11000

WORLD MARKETS

US indices soared 0.8%-1.3% on Friday as corporate earnings topped estimates.

Fourth-quarter GDP numbers showed the U.S. economy expanded by 2.6%, short of the 3% forecast. U.S. durable goods orders rose 2.9% in December as against expectation of an increase of 0.8%.

Main European markets ended with modest gains while Italy and Spain rose 0.4% and 1% respectively.

President Donald Trump addressed world leaders in a speech at the World Economic Forum (WEF) in Davos, Switzerland, on Friday. Trump told the conference that the U.S. wanted "fair" and "reciprocal" trade, criticizing countries that he said "exploit" others in trade deals

AT HOME

After falling about seven tenth of a percent, benchmark indices recouped most of the losses in the late noon trade to end with modest cuts. Sensex settled at 36050, down 111 points while Nifty fell 16 points to finish at 11070. BSE mid-cap and small-cap indices lost 0.7% each. Except 0.8% and 0.4% higher Metal and Capital Goods indices respectively, all the BSE sectoral indices ended in red with Realty and Auto indices leading the losses, down 1.5% and 1.2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 937 cr, 3945 cr and 1116 cr respectively. DIIs were net sellers to the tune of Rs 966 cr.

Rupee appreciated 15 paise to end at 63.54/$.

For the week, Sensex and Nifty gained 1.5% and 1.6% respectively, extending the winning streak to eight straight weeks.

Dr Reddy's Laboratories reported a 29% y-o-y fall in consolidated profit at Rs 334 crore due to continued decline in North America business, but North America business improved by 12% on sequential basis. Revenue from operations grew by 3% to Rs 3,806 cr. Consolidated EBITDA fell 8.4% to Rs 806 crore and margin contracted 300 basis points to 21%.

Maruti reported strong revenue and operational performance but profit was hit by higher tax and lower other income. Revenue and EBIDTA rose 14% and 22% respectively while profit was up 3% at Rs 1799 cr. Operating margins improved from 14.7% to 15.6%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-0.7% and SGX Nifty is suggesting about 60 points higher start for our market.

In Friday's report we had reiterated our "Hold on to long positions with a trailing stop-loss"stance and had given upside target of 11150. The benchmark fell 16 points to settle at 11070 but is set to open above 11100 today.

11150 continues to be immediate upside target above which 11290 would be the next target to eye. Immediate support, after today's higher start, would have risen to 11000, with the stop-loss of which, existing longs should be held on to.

HDFC and Tech Mahindra will report their quarterly earnings today.