NIFTY ACHIEVES 8627 TARGET; STAY LONG WITH THE STOP LOSS OF 8490

NIFTY ACHIEVES 8627 TARGET; STAY LONG WITH THE STOP LOSS OF 8490

WORLD MARKETS                             

US indices, after slipping into the negative territory in the morning trade, rebounded nearly a percent from the bottom of the day, with Dow ending marginally higher while S & P 500 and Nasdaq gained 0.2% and 0.4% respectively.

Johnson & Johnson fell after the health-products supplier reported international sales fell about 7% in the fourth quarter.

Nymex crude tumbled $2.30 or 4.7% to $46.39 a barrel after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action. Brent oil fell 70 cents to $48; gold rose for a seventh session, up $17.30 or 1.4% to $1294 an ounce.

European markets gained between 0.1%-1.2% amid speculation that the European Central Bank (ECB) will announce a full-scale bond-buying program when it meets on Thursday. Germany's ZEW economic sentiment index for January soared to 48.4, up from 34.9 in December and reaching its highest reading since February 2014.

AT HOME

It was a historic day as benchmark indices surged just under two percent to end at fresh record high. Sensex soared 523 points to settle at 28785 while Nifty finished at 8696, up 145 points. BSE mid-cap and small-cap indices however gained just 0.4% each. Except a marginally lower Consumer Durable and Power indices, all other sectoral indices ended in green with Metal index leading the tally, up 3%, followed by 1.8% rise in Bankex.

FIIs net bought stocks, index futures and stock futures worth Rs 1276 cr, 1749 cr and 295 cr respectively. DIIs were net sellers to the tune of Rs 762 cr.

Rupee appreciated 2 paise to end at 61.69/$.

Kotak Mahindra Bank reported 36.6% rise in standalone net profit at Rs 464.5 cr, aided by strong other income and lower provisions. NII rose 16% to Rs 1029 cr. Gross NPAs declined 2 bps q-o-q to 1.87 and net NPAs fell 3 bps to 0.97%.

OUTLOOK

Today morning, barring a half a percent lower Nikkei, other Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 20 points higher opening for our market.

Readers would recall that when Nifty closed above 8446 on last Thursday, we had mentioned that this marks a breakout after a consolidation of one and a half month and had also given a major target of 9000 along with the immediate target of 8627.

The benchmark surged 145 points yesterday to end at  8696, achieving the 8627 target and moving further higher, vindicating our view.

9000 continues to be the next major target and "stay long with the trailing stop loss" continues to be the advice. Immediate support on the hourly chart has moved up to 8490, with the stop loss of which trading longs should be held on to.

ITC will report its quarterly earnings today.

CHINESE DATA BOOSTS ASIAN MARKETS; NIFTY ON TRACK TO ACHIEVE 8627 TARGET

CHINESE DATA BOOSTS ASIAN MARKETS; NIFTY ON TRACK TO ACHIEVE 8627 TARGET

WORLD MARKETS                             

US markets were shut yesterday for the Martin Luther King Jr. Day.

European markets ended with gains ranging from 0.6%-1.2% with Spain and Italy leading the tally. Shares in several Italian cooperative banks shot up after press reports suggesting the government could change rules regarding shareholder voting rights.

Brent crude fell nearly 3% or $1.33 to $48.84 after Iraq announced record oil production and the global economic outlook darkened. Nymex oil fell $1.11 to $47.58 a barrel.

AT HOME

After a gap up opening, benchmark indices traded in a range for the rest of the session and finally ended higher by nearly a fifth of a percent, extending the winning streak to third straight day and closing at the highest level since 4th December 2014. Sensex gained 140 points to settle at 28262 while Nifty finished at 8551, up 37 points. BSE mid-cap and small-cap indices gained 0.4% and 0.8% respectively. Except a 0.7% cut in FMCG index and marginally lower IT index, all other BSE sectoral indices ended in  green with Consumer Durable index leading the tally with a 3.4% gain, followed by 1.2% each rise in Capital Goods and Healthcare indices.

HUL tumbled after company's topline and volume growth disappointed. Revenues rose 7.6% to Rs 7774 cr, the expected figure being Rs 7963 cr. Volume growth stood at 3% as against expectation of 5-6%. Net profit jumped 17.9% to Rs 1252 cr but was boosted by income from land sale.

FIIs net bought stocks, index futures and stock futures worth Rs 434 cr, 56 cr and 92 cr respectively. DIIs were net sellers to the tune of Rs 238 cr.

Rupee appreciated 16 paise to end at 61.71/$.

OUTLOOK

China's 4th quarter GDP growth has come in at 7.3% same as that in the previous quarter but above the forecast of 7.2%. December industrial output is up 7.9% vs November's 7.2% growth and estimate of 7.5% uptick. December retail sales have grown 11.9% vs 11.7% estimated.

Asian markets are trading with gains ranging from 0.5%-1.5% and SGX Nifty is suggesting about 25 points higher opening for our market.

Just to reiterate, we have been positive on Nifty ever since a buy was generated on hourly chart when 8300 was crossed. We had also mentioned that a crossover of 8446 would mark a breakout on the daily chart, upon happening of which, 8627 would be the next target.

Nifty is on track to achieve 8627 target. Immediate support on the hourly chart has moved up to 8430, with the stop loss of which trading longs should be held on to.

Also, when Nifty closed above 8446 on last Thursday, we had mentioned that a breakout from a symmetrical triangle formation has occurred, the target of which comes to around 9000 and can materialise over next 6-8 weeks. 9000 continues to be next major target above 8627.

Kotak Mahindra Bank will report its quarterly earnings today.

NIFTY ON TRACK TO ACHIEVE 8627 TARGET

NIFTY ON TRACK TO ACHIEVE 8627 TARGET

WORLD MARKETS                             

US indices surged 1.1%-1.4% on Friday, breaking five day losing streak as energy stocks led gains with U.S. crude rising and as investors considered a mixed bag of economic reports.

Nymex oil rose $2.44 or 5.3% to $48.69 a barrel; Gold gained 0.9% to $1277 an ounce.

The University of Michigan's preliminary consumer sentiment index climbed to 98.2 from a final 93.6 December reading. The consumer-price index declined 0.4% in December, with the cost of living falling by the most in six years following a 0.3% fall the month before. A third report had factory production slowing in December, up 0.3% versus a 1.3% increase in output in November.

Goldman Sachs Group fell after the investment bank reported a 7% decline in quarterly profit.

European markets gained between 0.6%-2.2%. The Swiss National Bank's abandonment of its currency cap on the euro boosted risk sentiment in Europe ex-Switzerland, as it has added to hopes that the European Central Bank could announce more stimulus measures. On the data front, final euro area inflation data on Friday confirmed a month-on-month fall of 0.1% in December.

For the week, Dow fell 1.3%, S & P 500 declined 1.2% and Nasdaq gave away 1.5%. European markets however, except a modestly higher FTSE, climbed between 3%-6%.

AT HOME

After a lower opening, benchmark indices saw a gradual upmove through the session to end higher by a fifth of a percent. Sensex gained 46 points to settle at 28122 while Nifty finished at 8514, up 20 points. BSE mid-cap index gained 0.3% while the small-cap index ended flat. BSE Consumer Durable and Healthcare indices gained the most among the sectoral indices, rising 2% and 1.4% respectively while IT and Teck indices lost 0.2% and 0.1% respectively.

FIIs net bought stocks and stock futures worth Rs 1100 cr and 1206 cr respectively but net sold index futures worth Rs 848 cr. DIIs were net sellers to the tune of Rs 717 cr.

Rupee appreciated 19 paise to end at 61.87/$.

For the week, Sensex and Nifty gained 2.8% and 2.4% respectively.

Oil marketing companies on Friday cut petrol and diesel prices by Rs 2.42 and Rs 2.25 per litre respectively.

Meanwhile, the government raised the excise duty on petrol and diesel by Rs 2 a litre.

Reliance Industries on Friday reported 11.4% q-o-q dip in the standalone net profit at Rs 5085 cr for the December quarter which matched street expectations. Sales declined 17% to Rs 80196 cr. Gross refining margins dipped to $7.30 a barrel against 8.30 in the previous quarter. EBIDTA margin expanded by 50 bps.

Wipro reported better-than-estimated 1.3% rise in IT services revenue at USD 1.795 bn for the quarter ended December. Rupee revenue rose 3.9% to Rs 11344 cr. Net profit jumped 5% to Rs 2203 cr. Constant currency IT services revenue grew 3.7% q-o-q to USD 1.84 bn, which was higher compared to Infosys (2.6%) and TCS (2.5%). The company guided for a 1-3% growth in dollar revenue for the next quarter.

OUTLOOK

Today morning Shanghai is down more than 3%, led by brokerages after regulators took measures to rein in margin trading at three of the nation's biggest securities firms. HangSeng is down about half a percent. Other Asian markets are up between 0.5%-1% and SGX Nifty is suggesting about 50 points higher opening for our market.

In Friday's report we had mentioned that Nifty had broken out of the upper band of bollinger on the daily chart after a consolidation of a month and half. We had also mentioned that while 8627, the record high made in early December is the immediate target, the triangle breakout formation on the daily chart projects a target of about 9000, which can materialise over 6-8 weeks.

That continues to be the view. Immediate support on the hourly chart has moved up to 8380, with the stop loss of which trading longs should be held on to.

HUL will report its quarterly earnings today.

US markets will remain shut today for Martin Luther King Jr. day.

BSE CAPITAL GOODS INDEX SET TO SOAR

BSE CAPITAL GOODS INDEX SET TO SOAR (CMP:16200)

As shown in the chart below, BSE Capital Goods index, after touching a high of 21021 in 2007, plunged to 5394 in 2009 and was in a broad consolidation since then.

The consolidation took the shape of a symmetric triangle. The index broke out of this formation recently and is all set for a big upmove in the time to come. The formation projects the upside target of around 26700, which represents an upside of  65% from the current level and can materialise over next 2-3 years.

NIFTY CLIMBS THE MOST IN 9-MONTHS ON RBI SURPRISE; STAY LONG WITH THE STOP LOSS OF 8380

NIFTY CLIMBS THE MOST IN 9-MONTHS ON RBI SURPRISE; STAY LONG WITH THE STOP LOSS OF 8380

WORLD MARKETS

US indices fell between 0.6%-1.5%, extending the losing streak to fifth straight day, as large US banks reported disappointing results, oil resumed fall and Switzerland's central bank unexpectedly gave up its minimum exchange rate.

Bank of America dropped after the bank reported a 14% fall in quarterly profit; Citigroup also declined as it posted a slim fourth-quarter profit.

A measure of manufacturing in the New York region climbed to 9.95, above estimates. Other reports had wholesale prices falling 0.3% in December, and a larger-than-expected number filing for jobless benefits last week, up by 19,000 to 316,000.

Swiss National bank shocked markets by abandoning its currency cap against the euro. Swiss stocks fell by more than 10% at one point on the news, and the Swiss franc gained up to 30% against the euro. The appreciation of the franc will make Swiss exports much more expensive.

Nymex crude fell 4.6% or $2.23 to settle at $46.25 a barrel while Brent dropped nearly $1 to around $48. Gold climbed 2.5% to $1265 an ounce.

European markets climbed between 1.4%-2.4%.

                                                             

AT HOME

Delighted by the unexpected rate cut by the RBI, benchmark indices soared 2.6% each, registering the largest gain since 9th May 2014 and closing at the highest level since 5th December 2014. Sensex surged 729 point to settle at 28076 while Nifty finished at 8494, up 217 points. BSE mid-cap and small-cap indices gained 1.2% and 1% respectively. All the BSE sectoral indices ended in green with the Realty index and Bankex leading the tally, putting on 8% and 3.3% respectively.

In a surprise move RBI cut the repo rate by 25 bps and signaled it could cut further, amid signs of cooling inflation and what it said was a government commitment to contain the fiscal deficit.

FIIs net bought stocks and index futures worth Rs 1738 cr and 3897 cr respectively but net sold stock futures worth Rs 290 cr. DIIs were net sellers to the tune of Rs 527 cr.

Rupee appreciated 13 paise to end at 62.05/$, marking a two-month high.

India's trade deficit for December touched a 10-month low at $9.43 bn as against $16.8 bn in November. This was mainly on account of imports declining to $34.83 bn from $42.82 bn. Exports came in at $25.4 bn as against $26 bn.

TCS third quarter net profit grew 2.94% q-o-q to Rs 5444 cr, coming in slightly lower than expectations while revenue and operational performance was in line. Revenue rose 2.87% to Rs 24501 cr and dollar revenue increased half a percent to $3.9 bn.

OUTLOOK

Today morning Nikkei is down nearly 2% on the back of stronger Yen; other Asian markets, except a modestly higher Shanghai, are trading with cuts of 0.5%-1% and SGX Nifty is suggesting a flattish start for our market.

Ever since Nifty broke out of the 8300 hurdle on the hourly chart, we have been advising holding on to trading longs with a trailing stop loss.

In yesterday's session Nifty closed above 8446 where the previous top made on 5th January as well as the upper band of bollinger were placed, there by staging a breakout. While 8627, the record high made on 4th December would be the immediate target, the triangle breakout on the daily chart projects a target of about 9000, which can materialise over next 6-8 weeks.

On the way down, 8380, the bottom made yesterday, would be the immediate support, with the stop loss of which trading longs should be held on to.

Reliance Industries, Axis Bank and Wipro will report their quarterly earnings today.

US EQUITIES REBOUND ALONG WITH OIL; NIFTY HOLDS 8235 SUPPORT

US EQUITIES REBOUND ALONG WITH OIL; NIFTY HOLDS 8235 SUPPORT

WORLD MARKETS

After falling sharply in the first half on the back of disappointing retail sales and worries over global economic growth, US indices recovered nearly a percent from the bottom of the day as crude reversed higher and finally ended lower by 0.5%-1%, extending the losing streak to fourth day.

Retail sales fell 0.9% in December, marking the highest fall in a year.

JPMorgan Chase dropped after reporting a decline in fourth-quarter profit; Wells Fargo also fell after the mortgage lender posted results in line with expectations.

Copper prices hit a five-year-plus low after the World Bank lowered its global growth forecasts for 2015 and 2016 due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices.

Nymex crude jumped 5.6% to $48.5 a barrel, posting its biggest one-day percentage gain in more than two years. Brent crude rose $2.10 to settle at $46.4 a barrel.

European markets, weighed down by energy and mining stocks, plunged 1.2%-2.4%.

The European Court of Justice yesterday said that the Outright Monetary Transactions (OMT) bond-buying program—commonly seen as a predecessor to QE—was compatible with treaty provisions and was in line with European Union law, as long as certain conditions were met. The ruling from the court is a non-binding judgment but has added weight to the possibility of more stimulus in the euro zone.

                                                             

AT HOME

After a positive start, benchmark indices plunged nearly a percent from the top of the day but recouped some of the losses in the noon trade to finally end lower by three tenth of a percent, extending the losing streak to second day. BSE Metal index nosedived 3.5%, becoming top loser among the sectoral indices, followed by a 0.9% cut in the Healthcare index. IT and Teck indices gained 1.1% and 0.8% respectively.

FIIs net sold stocks and stock futures worth Rs 70 cr and 244 cr respectively but net bought index futures worth Rs 178 cr. DIIs were net sellers to the tune of Rs 224 cr.

Rupee depreciated 4 paise to end at 62.18/$.

WPI for December rose marginally to 0.11% from zero in November but was below the expected 0.3% mark. Core WPI, or non-food manufacturing inflation, eased to 1.5%, an indication of subdued demand pressure. The inflation number for October was revised downwards to 1.66% from 1.77%.

OUTLOOK

Today morning, Nikkei is up nearly a percent and half, other Asian markets are trading with modest gains but SGX Nifty is suggesting about 20 points lower opening for our market.

Nifty continues to be in a broad consolidation after hitting a record high of 8627 in early December. The consolidation is taking a form of a triangle with the benchmark making lower tops and higher bottoms on the daily chart. 8446 and 8065, the top and bottom made last week, are the important resistance and support levels to eye from a larger perspective.

In yesterday's report we had mentioned that the immediate support on the hourly chart is placed at 8235 with the stop loss of which trading longs should be held on to. The benchmark, after touching a low of 8237, bounced back to end at 8278.

8235 continues to be immediate support a sustained trading below which would confirm a sell on the hourly chart and can take benchmark in the vicinity of the 8065, the lower level of the 8446-8065 range mentioned above. On the way up 8357, the top made on Tuesday, is the immediate resistance, above which 8446 would be the major hurdle to eye.

TCS and Bajaj Auto will report their quarterly earnings today.

NIFTY BREAKS 3-DAY WINNING STREAK; IMMEDIATE SUPPORT AT 8235

NIFTY BREAKS 3-DAY WINNING STREAK; IMMEDIATE SUPPORT AT 8235

WORLD MARKETS

After rising nearly a percent and half in the initial trade, benchmark indices saw a sustained downward move through rest of the session to end lower by 0.1%-0.3% as materials and energy shares fell on lower commodity prices.

Rumors that Germany can block further quantitative easing by the ECB also dented the sentiment.

Brent crude tumbled 2% or 84 cents to $46.59/barrel while Nymex oil settled down 18 cents at $45.89.

European markets gained between 0.6%-2% with a surge in retail stocks helping to boost investor sentiment. The rate of inflation in the U.K. fell to 0.5% in December, the lowest in 14 years.

AT HOME

After trading in the positive territory for better part of the day, benchmark indices nosedived in last hour or so to end with cuts of 0.6% and 0.3% for Sensex and Nifty respectively, also breaking the three-day winning streak. Sensex lost 160 points to settle at 27426 while Nifty finished at 8299, down 24 points. BSE mid-cap index gained 0.1% while the small-cap index lost 0.4%. Except a 0.7% and 0.1% rise in BSE FMCG and Healthcare indices, all other sectoral indices ended in red with Realty and Consumer Durable indices leading the tally, giving away 1.8% and 1.2% respectively.

FIIs net bought stocks and index futures worth Rs 235 cr and 441 cr respectively but net sold stock futures worth Rs 12 cr. DIIs were net buyers to the tune of Rs 46 cr.

Rupee appreciated 2 paise to end at 62.14/$.

Indusind Bank met street expectations by reporting 28.8% rise in profit at Rs 447 cr for the quarter ended December 2014 supported by higher other income and net interest income and lower provisions. NII grew 18% to Rs 861.4 cr and other income jumped 27% to Rs 610.7 cr. Gross NPAs improved to 1.05% from 1.08% q-o-q and Net NPAs stood at 0.32%, down from 0.33%.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 15 points higher opening for our market.

Yesterday, Nifty, after touching a high of 8357, plunged in last hour to end at 8299. A gap, created by the gap down opening on last Tuesday was placed at 8364-8328, which acted as a resistance for the benchmark.

Immediate support on the hourly chart has moved up to 8235 with the stop loss of which trading longs can be held on to. 8357, the top made yesterday, would be the immediate resistance above which 8446, the top made last week would be the next big hurdle.

India's wholesale price inflation for December would be released today and is expected to inch up to 0.3% from 0% in November.

Yes Bank and LIC Housing will report their quarterly earnings today.