NIFTY SET TO ACHIEVE 11400 TARGET; TRAIL STOP-LOSS TO 11240

NIFTY SET TO ACHIEVE 11400 TARGET; TRAIL STOP-LOSS TO 11240

WORLD MARKETS

US indices gained 0.4%-0.6% on news that the U.S. and China may restart official talks about their trade dispute.

Procter & Gamble and Pfizer reporting better-than-expected earnings.

European markets added 0.1%-1.2% with Italy on the top. Euro area grew at only 0.3% in the second quarter of the year from the first quarter. July inflation inched up to 2.1% from 2% in June.

For July, the Dow and S&P 500 rose 4.7% and 3.6% respectively, their biggest monthly gains since January. Nasdaq added more than 2%.

AT HOME

After falling about half a percent in the morning, benchmark indices recouped all the losses and more in noon trade to end higher by three tenth of a percent, extending the winning streak to fourth straight day and hitting yet another record high. Sensex settled at 37607, up 112 points while Nifty added 37 points to finish at 11356. BSE mid-cap and small-cap indices too rose 0.3% each. Except a 0.5% and 0.4% lower Finance index and Bankex respectively, all the BSE sectoral indices ended in green with Energy and Realty indices leading the tally, up 1.9% and 1.1% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 572 cr, 66 cr and 611 cr respectively. DIIs were net sellers to the tune of Rs 291 cr.

Rupee appreciated 13 paise to end at 68.54/$.

Tata Motors reported a consolidated net loss of Rs 1863 cr for the June quarter, missing street estimates by a huge margin. Revenue rose 12.1% to Rs 67081 cr. Consolidated EBIDTA fell 21% to Rs 4423 cr and margin fell 300 bps to 6.6%. JLR revenue was down 7%,EBITDA margin fell 170 bps to 6.2% and net loss stood at 210 mn pound.

VEDL reported mixed set of earnings. Sales rose 21.4% to Rs 22206 cr, operating margin expanded from 26.76% to 28.3% but profit was up just 1% at Rs 2248 as other income fell 62%.

India's core sector output growth surged to a 7-month high at 6.7% in June, up from 4.3% in May.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-0.6% and SGX Nifty is suggesting about 25 points higher start for our market.

After Nifty achieved 11230 target, we have been working with next target of 11400. Yesterday, Nifty touched a high of 11366 before closing at 11356 and a higher start today would take it closer to 11400 target. 11440 would be the next target above 11400.

Immediate support on the hourly chart has moved up to 11240, with the stop-loss of which, trading longs should be held on to.

Monetary Policy Committee, at the end of its two-day meeting, is widely expected to leave interest rate unchanged, after hiking it by 25 bps in the June policy review. However, commentary would be the key in terms of stance and tone to guage the probability of future interest rate trajectory.

Auto companies will report their July sales today.

US Fed, at the end of its two-day meeting, is widely expected to leave the interest rate unchanged.