TRAIL STOP-LOSS TO 12230

TRAIL STOP-LOSS TO 12230

WORLD MARKETS

Dow rose 0.1% while S & P 500 and Nasdaq fell 0.2% each despite strong earnings from major investment banks on news that U.S. tariffs targeting Chinese goods will stay on through the 2020 election even as both sides get ready to sign a “Phase One” trade deal.

Bloomberg News reported that both countries understand the U.S. will review and possibly trim existing levies no sooner than 10 months after the deal is signed. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer later confirmed the news in a joint statement.

As part of the phase one deal, the U.S. said it would scrap a new round of tariffs and cutting existing duties on $120 billion in products to 7.5%. However, Trump said 25% tariffs on $250 billion in Chinese products would stay in place.

J.P. Morgan Chase and Citigroup rose after quarterly earnings and revenue beat analyst expectations. Delta Air Lines also reported better-than-expected earnings, boosted by lower fuel costs and strong travel demand.

Brent crude rose 31 cents, or 0.5%, to $64.51 per barrel while WTI gained 15 cents or 0.3% to settle at $58.23.

European markets ended marginally higher. Sterling edged above $1.30 mark after data showed that U.K. economic growth slowed to its weakest since 2012 in November, boosting expectations of an interest rate cut from the Bank of England later this month.

AT HOME

Benchmark indices rose about a fourth of a percent, extending the winning streak to fourth straight day and hitting fresh record highs. Sensex settled at 41952, up 92 points while Nifty added 32 points to finish at 12362. BSE FMCG index climbed 1.5%, becoming top gainer among the sectoral indices, followed by 0.9% higher Metal index. Energy index and Bankex were the top losers, down 0.5% and 0.4% respectively. BSE mid-cap and small-cap indices gained 0.7% each.

FIIs net sold stocks and index futures worth Rs 206 cr and 73 cr respectively but net bought stock futures worth Rs 322 cr. DIIs were net sellers to the tune of Rs 642 cr.

Rupee depreciated 2 paise to end at 70.88/$.

Wipro's numbers were largely in-line with expectation but guidance was below expectation and management commentary was also cautious. Dollar revenue and Constant currency revenue growth stood at 2.2% and 1.8% q-o-q respectively. Margins expanded by 30 bps. The company guided for revenue growth of 0-2% for Q4.

Indusind Bank's Q3 NII rose 34.3% y-o-y to Rs 3074 cr while net profit was up 32% at Rs 1300 cr. Gross NPA ratio improved 1 bps q-o-q to 2.18% while net NPA ratio improved 7 bps to 1.05%. Slippages rose to Rs 1945 cr from Rs 1102 cr

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.1%-0.3% and SGX Nifty is suggesting about 20 points lower start for our market.

Readers would recall that we had advised going long on Nifty after 12150 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss.

In yesterday's report, we had given target zone of 12400-12430 and had advised trailing the stop-loss to 12170.

Nifty touched a high of 12374 before closing at 12362 and is set to open below 12350 today.

12400, where an upward sloping trendline adjoining tops made in August 2018 and June 2019 is placed, continues to be the next target/resistance to eye. Above 12400, 12430, where an upward sloping trendline adjoining recent tops on daily chart is placed, would be the next target.

Immediate support on the hourly chart has moved up to 12230, with the stop-loss of which, trading longs should be held on to.