NIFTY ACHIEVES 11171 TARGET; TRAIL STOP-LOSS TO 11000

NIFTY ACHIEVES 11171 TARGET; TRAIL STOP-LOSS TO 11000

WORLD MARKETS

Dow gained 0.4% while S & P 500 and Nasdaq fell 0.3% and 1% respectively. Nasdaq posted its worst day in a month as facebook shares plunged 19% on the back of poor quarterly results.

Facebook's negative results offset strong earnings from Comcast, Qualcomm and Advanced Micro Devices.

Industrials rose amid positive news on trade as Trump announced that the U.S. and the European Union had initiated a "new phase" within their relationship, explaining how both regions would start collaborating in order to lower tariffs and avoid a potential trade war.

US crude rose 31 cents to settle at $69.61 a barrel.

Euro fell after the European Central Bank kept its policy unchanged.

In Europe, FTSE inched up 0.1% while other markets climbed 0.8%-1.8% with DAX on the top.

AT HOME

Benchmark indices ended higher by about a third of a percent, hitting fresh record intraday as well as closing high. Sensex added 126 points to settle at 36985 while Nifty finished at 11167, up 35 points. BSE mid-cap and small-cap indices rose 0.8% and 0.3% respectively. BSE Utilities index soared 1.7%, becoming top gainer among the sectoral indices, followed by 1.4% higher Power index and Bankex. Metal and IT indices were the top losers, down 0.7% each.

FIIs net bought stocks worth Rs 2454 cr while DIIs were net sellers to the tune of Rs 2716 cr.

Rupee appreciated 12 paise to end at 68.66/$.

ITC reported largely in-line with estimated topline and bottomline while margins came in better. Net profit rose 10.1% to Rs 2819 cr while revenue was up 7.6% to Rs 10707 cr. EBITDA rose 12.2% to Rs 4202 cr and margin expanded 170 bps to 39.3%.

Bharti Airtel posted 17.4% q-o-q rise in net proit at Rs 97.3 cr while revenue was up 2.3% at Rs 20080 cr. EBITDA fell 2.8% to Rs 6837 cr and margins contracted 180 bps to 34%.

Maruti reported in-line revenue while operational and bottombline performance was a miss. Net profit rose 26.9% y-o-y to Rs 1975 cr while revenue rose 28% to Rs 22459 cr. EBITDA surged 43.8% to Rs 3351 cr and margin expanded 160 bps to 14.9%. SBI soared 6.4%, becoming top Nifty gainer, followed by 3.7% higher Eicher Motors. Yes Bank and Maruti were the top losers, down 4% and 3.8% respectively. BSE advance-decline ratio stood at 1:1.1.

Yes Bank reported better-than-expected bottomline, but stock slipped on weakening NIM and asset quality as slippages rose and provisions jumped. Net profit rose 30.5% to Rs 1260 cr y-o-y and NII was up 22.7% at Rs 2219 cr. Gross NPA ratio rose to 1.31% from 1.28% while net NPA ratio improved to 0.59% from 0.64% q-o-q. Gross slippages rose to Rs 560 cr from 380 cr q-o-q. Net interest margin, at 3.3%, hit a 12-quarter low. Provisions stood at Rs 626 cr, a growth of 119% y-o-y and 56% q-o-q.

Dr Reddy reported better-than-expected results on all counts. Net profit rose more than seven-fold to Rs 456 cr while revenue was up 12% at Rs 3721 cr. EBITDA was up 140% to Rs 807 cr and margins expanded 1170 bps to 21.7%.

OUTLOOK

Today morning, Nikkei is up 0.4% while Shanghai and Hang Seng are down 0.2% and 0.4% respectively. SGX Nifty is suggesting about 40 points higher start for our market.

Just to reiterate, we had given targets of 11171 followed by 11230 after 11078 hurdle was taken out. Nifty yesterday touched a high of 11185 before closing at 11167, achieving 11171 target and vindicating our view.

11230 continues to be next target above which 11400 would be the next level to eye.

Meanwhile, immediate support on the hourly chart has moved up to 11100, with the stop-loss of which, trading longs should be held on to.

Reliance Industries, HCL Tech, BoB and ICICI Bank will report their quarterly earnings today.