7240 ACHIEVED, 7120 NEXT

7240 ACHIEVED, 7120 NEXT

WORLD MARKETS                             

After rising nearly a percent and half in the initial trade, US indices plunged sharply to end mixed with Dow down 0.6%, flat S & P and 0.4% higher Nasdaq. This was amidst volatility in oil prices and as markets digested Yellen's testimony.

After gaining more than 3.5% after the EIA data that showed 0.8 mn barrel fall in the US oil inventories, Nymex oil fell 49 cents or 1.75% to $27.45 a barrel Brent rose 73 cents to $31.06 a barrel.

In her testimony to Congress, Fed Chair Yellen said if the U.S. economy were to disappoint, the Fed would have to reconsider its rate hike path. Yellen answered questions after delivering her remarks, saying "I don't think it will be necessary to cut rates but like I said monetary policy is not on a preset course."

European markets gained 0.7%-5% with Italy leading the tally.

AT HOME

Mayhem on Dalal Street continued as benchmark indices, after a gap down opening, fell further through the session to end with cuts in excess of a percent, marking a fresh 21-month low. Sensex slipped 262 points to settle at 23759 while Nifty ended at 7216, down 82 points. BSE mid-cap and small-cap indices lost 1% and 1.4% respectively. Except a marginal 0.02% rise in Energy index, all the BSE sectoral indices ended in red with Realty and Finance indices leading the tally with cuts of 3.5% and 2.2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 751 cr, 418 cr and 1269 cr respectively. DIIs were net buyers to the tune of Rs 197 cr.

Rupee appreciated 6 paise to end at 67.845/$.

ACC reported 69% dip in consolidated net profit at Rs 102.4 cr. Income rose 2.8% to Rs 2912 cr. Operating profit rose 8.8% to Rs 280 cr and margin stood at 9.6%, up 54 bps y-o-y  but down 163 bps q-o-q.

Cipla, affected by some one-off charges, reported lower-than-expected 4.7% rise in consolidated net profit at Rs 343 cr. Net sales rose 15.3% to Rs 2625 cr. 

OUTLOOK

Today, Hang Seng, after holidays, has opened nearly 4% down, Korea is down more than 2% and SGX Nifty is suggesting about 60 points lower opening for our market.

After Nifty broke immediate support of 7350, we had given downside target of 7240, which was the bottom made in January. In yesterday's report we had said that below 7240, next target to eye would be 7120, which is the 50% retracement level of the entire 5119-9119 upmove.

The benchmark achieved 7240 target in the opening trade itself and fell further to 7178 before closing at 7216.

A gap down opening today would take the benchmark close to 7150 mark.

7120 continues to be downside target to eye. Immediate hurdle on the hourly chart has moved lower to 7370, which should now serve as the stop loss for trading shorts.

SBI, Tata Motors, Ashok Leyland, BHEL, Coal India and Hero MotoCorp will report their quarterly earnings today.

NIFTY SET TO ACHIEVE 7240 TARGET

NIFTY SET TO ACHIEVE 7240 TARGET

WORLD MARKETS                             

After falling sharply in the morning trade, US indices rebounded nearly a percent from the bottom of the day to end marginally lower with Dow and S & P 500 losing 0.1% while Nasdaq fell 0.3%.

Nymex oil fell $1.24 or 4.2% to $28.53 after the data from American Petroleum Institute (API) showed U.S. crude stockpiles rose by 2.4 million barrels in the week to Feb. 5 to 503.4 million. Brent fell $2.04 or 6.2% to $30.85.

U.S. wholesale inventories declined 0.1% in December, less than expected. Also, the latest JOLTS survey showed job openings rose in December.

U.S. 10-year yields traded at 1.73%, after briefly dipping below 1.7%. In Japan, 10-year yields turned negative for the first time ever.

Dollar index fell 0.5%.

European markets lost 1%-3.2% with Italy leading the losses. Basic resources sector was the worst performer with 5% cut. On the data front, December German industrial output fell 1.2% month-on-month.

AT HOME

After a big gap down opening, benchmark indices saw a rangebound but choppy trade through rest of the session and finally ended with deep cuts of more than a percent. Sensex slumped 266 points to settle at 24021 while Nifty ended at 7298, down 89 points. BSE mid-cap and small-cap indices lost 1.9% and 1.3% respectively. Except a 0.2% each gain in BSE Oil & Gas and Utilities indices, all the sectoral indices ended in red with IT and Teck indices leading the tally, down 3.4% and 3% respectively.

FIIs net sold stocks and stock futures worth Rs 680 cr and 1294 cr respectively but net bought index futures worth Rs 1294 cr. DIIs were net sellers to the tune of Rs 174 cr.

Rupee appreciated 3 paise to end at 67.90/$.

PNB plunged nearly 7% after posting disappointing quarterly earnings with higher provisions and further worsening in asset quality. Net profit fell 93% y-o-y to Rs 51 cr. NII slipped 3% to Rs 4120 cr. Gross NPA ratio worsened 211 bps q-o-q to 8.47% and Net NPA ratio rose 187 bps to 5.86%. Provisions surged 100% to Rs 3775 cr.

Dr Reddy reported a marginal growth in net profit at Rs 579 cr, impacted by Rs 30 cr forex loss. Income rose 3.2% to Rs 3968 cr. EBIDTA rose 8% to Rs 1023 cr and margin stood at 25.8% vs. 24.62%.

OUTLOOK

Today morning Nikkei is trading with cuts of more than 2% and SGX Nifty is suggesting about 70 points lower opening for our market.

In yesterday's report we had mentioned that a sustained trading below 7350 would open up the possibility of the retest of the 7240 bottom made in January.

The benchmark opened below the 7350 mark and plunged all the way to 7275 before closing at 7298.

A gap down opening today would take Nifty in the vicinity of the 7240 mark. Upon sustained trading below 7240, next support to eye would be about 7120, where the 50% retracement level of the entire 5119-9119 upmove is placed.

Immediate resistance on the hourly chart is placed at 7400, with the stop loss of which trading shorts should be held on to.

Cipla, ACC and Ambuja Cement will report their quarterly earnings today.

Markets would watch out for Fed Chair Yellen's testimony on Wednesday and Thursday where she is expected to acknowledges the weakness in the US and global economy.

WORLD EQUITIES TUMBLE ON GLOBAL GROWTH, US INTEREST RATE CONCERNS

WORLD EQUITIES TUMBLE ON GLOBAL GROWTH, US INTEREST RATE CONCERNS

WORLD MARKETS                             

After plunging about 2.5%-3.5% on persisting global growth concerns, US indices recouped some of the losses in last hour of trade to end with cuts of 1.1%-1.8%. Financials and materials were the biggest drags on S & P 500 while Energy rose in late-afternoon trading, and closed as the only advancing sector.

Nymex oil closed $1.20 or 3.9% lower at $29.69 a barrel, after a meeting between Saudi Arabia and Venezuela at the weekend ended with few signs of coordination to tackle the global supply glut. Brent fell 99 cents or 2.8% to $33.09. Gold surged 3.5% to close at $1798 an ounce and went above $1200 for the first time since June.

U.S. Treasury rallied with the benchmark 10-year note yield falling to 1.76%, while two-year yields traded at 0.67%.

European markets tumbled 2.7%-4.7%

AT HOME

After trading in about half a percent range for most of the day, benchmark indices nosedived in last hour of trade to end with deep cuts of a percent and third. Sensex settled at 24287, down 330 points while lost 102 points to finish at 7387.  BSE IT and Teck indices tumbled 2% and 1.6% respectively, becoming top losers among the sectoral indices while Telecom and Realty indices gained 0.8% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 85 cr and 213 cr respectively but net bought stock futures worth Rs 439 cr. DIIs were net buyers to the tune of Rs 279 cr.

Rupee fell 30 paise to end at 67.935/$.

India's third quarter GDP came in at 7.3%, compared to 7.4% in the second quarter and 6.6% in Q3 last year. The full year GDP forecast has been revised to 7.6% from 7.2%. The Q1FY16 growth has been revised to 7.6% from 7.0%, while Q2FY16 has been revised to 7.7% from 7.4%. The gross value added (GVA) is seen at 7.3%, compared to 7.1% in the previous year.

Cognizant fell more than 7% after company's revenue growth forecast for January-March quarter at 11.34% y-o-y, fell short of expectation and would be the lowest in 14 years.

OUTLOOK

Today morning Nikkei has opened with sharp cuts of more than 4% as the Yen has surged to the strongest level in 15 months which is not good news for Japanese exports. SGX Nifty is suggesting about 50 points lower start for our market.

In yesterday's report we had mentioned that a crossover of 7503, the top made on Friday, would confirm a buy on the hourly chart and can take Nifty to around 7600.

The benchmark touched a high of 7512 but saw a steep sell-off in last hour to end way below at 7387 and is set to open with a gap down today.

7350, the bottom made last week, is the immediate support, a sustained trading below which will open up the possibility of the retest of the 7240 bottom made in January.

Hindalco, PNB and Dr Reddy will report their quarterly earnings today.

7600 NEXT HURDLE ABOVE 7503; 7350 CONTINUES TO BE IMMEDIATE SUPPORT

7600 NEXT HURDLE ABOVE 7503; 7350 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices nosedived 1.3%-3.2% on Friday as technology stocks plunged and mixed U.S. employment data raised concerns the Federal Reserve may raise rates this year.

Key drags on tech heavy Nasdaq were Apple, Amazon and Facebook, which fell 2.7%, 6.4% and 5.8% respectively. LinkedIn nosedived 44% percent after posting weak guidance on their quarterly results.

U.S. economy added 151,000 jobs in January, which was lower than the expectation of a gain of 190,000. The unemployment rate, however, fell to 4.9% from 5%, while wages rose 0.5%. U.S. trade deficit widened in December amid a rising dollar and a weak global demand.

Nymex oil slipped 83 cents or 2.6% to $30.89 a barrel. Brent fell 40 cents or 1.2% to $34.06 a barrel.

European markets fell 0.9%-2.1%.

For the week, US indices lost 1.6%-5.4% with Nasdaq leading the losses. European markets tumbled 3.9%-7.5%.

AT HOME

It was a good end to the week as benchmark indices gained more than a percent on Friday, extending the winning streak to second consecutive day. Sensex soared 279 points to settle at 24617 while Nifty finished at 7489, up 85 points. BSE mid-cap and small-cap indices gained 1.9% and 1.2% respectively. All the BSE sectoral indices ended higher with Healthcare and Metal indices leading the tally, up 3.4% each.

FIIs net sold stocks and stock futures worth Rs 607 cr and 159 cr respectively but net bought index futures worth Rs 24 cr. DIIs were net buyers to the tune of Rs 760 cr.

Rupee depreciated 10 paise to end at 67.64/$.

For the week, Sensex and Nifty lost 1% each.

Lupin soared 10% after reporting better-than-expected quarterly earnings and positive guidance.  Consolidated net profit fell 12% y-o-y but rose 30% q-o-q to Rs 530. Revenue rose 12% y-o-y and 7% q-o-q to Rs 3556 cr. Operating profit fell 2.5% y-o-y but rose 32% q-o-q to Rs 942 cr and margin contracted 390 bps y-o-y but expanded 500 bps q-o-q to 26.5%.

The commerce ministry on Friday fixed a minimum import price (MIP) for certain steel products to protect domestic manufacturers from cheap imports. The MIP will be valid for the next six months and may be extended, if needed. MIP on ingots and billets has been fixed at USD 362 per tonne, for flat rolled and hot rolled steel at USD 445-500 per tonne and semi-finished steel at USD 341-362 per tonne.

Tata Power's consolidated net profit plunged 88% y-o-y to Rs 24 cr, hit by regulatory expenses of Rs 601 cr and exceptional loss of Rs 187 cr but operational performance was ahead of estimates. Revenue rose 9.4% to Rs 9329 cr. Operating profit shot up 110% to Rs 2472 cr and margin expanded 12.7% to 26.5% as against expectation of Rs 1909 cr and 20.4% respectively.

NSE will introduce United Spirits, PC Jewellers, Tata Elxsi, Cummins, Indo Count, KPIT and Granuels in the derivative segment from February 26.

OUTLOOK

China, Hong Kong and Taiwan will remain shut this week for Lunar new year. Today, Nikkei is down about half a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

In Friday's report we had mentioned that 7350-7490 is the immediate range, a breach of which, on either side, is required to take a fresh view on Nifty.

The benchmark gained 85 points to settle at 7489 on Friday but is slated to open lower today. 

Now, after this weak opening, if the benchmark manages to take out Friday's high of 7503, that would confirm a breakout on the hourly chart and next target to eye in that case would be around 7600, where the 34-DMA is placed.

7350, the bottom made last week, continues to be immediate support a breach of which can take the benchmark back to 7240 bottom.

India's Q4 GDP figure will be released today.

7350-7490 IS THE IMMEDIATE RANGE

7350-7490 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

S & P 500 and Nasdaq rose 0.1% each while Dow gained half a percent after a choppy session amidst weaker-than-expected earnings and falling oil prices.

After rising more than 3% at session highs, Nymex oil reversed to settle down 56 cents or 1.7% at $31.71 a barrel while Brent slipped 58 cents or 1.6% to $34.46.

U.S. jobless claims rose 8,000 to 285,000 last week, while economists were expecting a total of 280,000. Productivity declined 3% in the fourth quarter, its biggest drop since the first quarter of 2014. Factory orders for December fell 2.9%, worse than the expected 2.6% fall.

After falling more than 1% on Wednesday, Dollar index fell another 0.8% yesterday to hit its lowest level since October 23. Gold climbed $16 to $1158 an ounce.

European markets, except a 0.4% lower DAX and flat CAC, gained 1.1%-1.8% on the back of a rally in mining stocks. European Commission said that the euro zone is expected to grow 1.7% in 2016 and 1.9% in 2017. The 2016 figure was a downward revision from the 1.8% expected in the last forecast in November.

AT HOME

Benchmark indices managed to end higher by about half a percent after an extremely choppy trading session, breaking the three day losing streak. Sensex settled at 24338, up 115 points while Nifty added 42 points to finish at 7404. BSE mid-cap and small-cap indices however lost 0.2% and 0.8% respectively. BSE Metal and Capital Goods indices climbed 2.5% and 1.9% respectively, becoming top gainers among the sectoral indices while Healthcare index tumbled 1.6%, becoming the top loser, followed by 0.3% cut in Realty index.

FIIs net sold stocks worth Rs 195 cr but net bought index futures and stock futures worth Rs 890 cr and 30 cr respectively. DIIs were net buyers to the tune of Rs 476 cr.

Rupee appreciated 53 paise to end at 3-week high of 67.54/$.

Tata Steel reported worse-than-expected consolidated net loss of Rs 2127 cr on revenues of Rs 26821 cr. EBITDA was at Rs 1489 cr with EBITDA margin at 5.3%. Net loss was expected at Rs 1000 cr and margin was expected to be 5.5%.

The Budget session of Parliament will begin on February 23, and Finance Minister Arun Jaitley will present the union budget on February 29.

OUTLOOK

Today morning Nikkei is down more than a percent but other Asian markets are trading with modest gains and SGX Nifty is suggesting about 25 points higher opening for our market.

In yesterday's report we had mentioned that "despite a gap up opening, the bias would continue to be negative until immediate hurdle of 7490 is taken out".

The benchmark, after touching a high of 7457 intraday, plunged to 7367 in the noon trade before closing at 7407.

7490 continues to be immediate hurdle, a crossover of which is required to generate a buy on the hourly chart. 7620, where 34-DMA is placed, would be the next target if that happens. 7350, the bottom made on Wednesday is the immediate support, a brach of which can take benchmark back to 7240 bottom made in January.

Lupin and Tata Power will report their quarterly earnings today.

In the US, nonfarm payroll data is expected to show addition of 188000 jobs while unemployment rate is expected to remain unchanged at 5%.

7490 IS THE IMMEDIATE HURDLE

7490 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

After falling nearly a percent and half in the initial trade, US indices saw a sharp rebound through the session as the oil surged, which helped Dow and S & P 500 close 1.1% and 0.5% higher while Nasdaq ended 0.3% lower.

WTI crude gained $2.40 or 8% to $32.28 a barrel and Brent climbed $2.32 or 7% to $35.04 a barrel on news that Russia may be open to a deal with OPEC in order to cut production.

The ISM non-manufacturing index's January reading came in at 53.5, below the expected 55.1 and the lowest reading since December 2013. ADP reported that private U.S. payrolls jumped 205,000 last month, above a consensus estimate of 195,000.

Dollar index fell 1.6% as weak U.S. economic data suggested a March interest rate hike from the data-dependent Federal Reserve was unlikely.

European markets lost 1.3%-2.8%

Earlier, Nikkei and Hang Seng ended with deep cuts of 3.2% and 2.3% respectively. Shanghai lost 0.4%.

AT HOME

After a gap down opening, benchmark indices lost some more weight through the choppy session to end with deep cuts of a percent and third, extending the losing streak to third straight day. Sensex slumped 316 points to settle at 24223 while Nifty finished at 7362, down 94 points. BSE mid-cap and small-cap indices lost 1.3% and 2.2% respectively. All the BSE sectoral indices ended in red with Power and Capital Goods indices leading the tally, down 4.2% and 2.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 357 cr, 352 cr and 296 cr respectively. DIIs were net sellers to the tune of Rs 145 cr.

Rupee fell 10 paise to end at 68.0725/$.

India's Nikkei/Markit Services PMI surged to 54.3 in January from December's 53.6, marking a 19-month high. Composite PMI rose to an 11-month high of 53.3 from 51.6.

OUTLOOK

Today morning, except a half a percent lower Nikkei, other Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 50 points higher opening for our market.

For past couple of sessions we had been mentioning that 7460 was the immediate support, a sustained trading below which would generate a sell on the hourly chart. After this support was breached on Tuesday, in yesterday's report, we had given downside target of 7380, which was the 61.8% retracement level of the recent 7240-7600 upmove. We had also said that a sustained trading below would open up the possibility of the retest of 7240 bottom.

The benchmark, after a gap down opening, fell further to touch a low of 7350 before closing at 7362.

While Nifty would open with a gap up today, the bias would continue to be negative until immediate hurdle of 7490 is taken out. On the way down 7240 would be the next downside target once 7350, the bottom made yesterday, is breached.

Bajaj Auto and Tata Steel will report their quarterly earnings today.

NIFTY BREAKS 7460 SUPPORT

NIFTY BREAKS 7460 SUPPORT

WORLD MARKETS                             

US indices fell between 1.8%-2.2% on renewed declined in oil prices. The Nasdaq composite led the decline as Apple, biotechs and several major tech stocks fell.

Nymex oil fell $1.74 or 5.5% to $29.88 a barrel, weighed by concerns about demand and rising supply, as hopes for a deal between OPEC and Russia on output cuts diminished. Brent slid $1.79 or 5.2% to $32.43.

Auto sales for January came in at a 17.58 million annual rate, the strongest January since 2000.

European markets tumbled 1.8%-3% as low oil prices and earnings reports from BP and UBS weighed. Rating agency S & P cut its rating on Shell and BHP Billiton due to the poor outlook for commodities. BP plunged 8.7% after reprting an annual loss of $6.5 billion in 2015, its worst in 20 years. UBS reported earnings that topped forecasts, but warned that volatile markets, low interest rates and a strong Swiss franc would continue to present headwinds.

AT HOME

Sensex and Nifty ended with deep cuts of 1.2% and 1.3% respectively after an extremely choppy session. Sensex settled at 24539, down 286 points while Nifty lost 100 points to finish at 7456. BSE mid-cap and small-cap indices fell 1.7% and 1.2% respectively. Except a 0.4% rise in BSE Telecom index, all the sectoral indices ended in red with Metal and Energy indices leading the tally, down 4.3% and 2.7% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 113 cr, 51 cr and 393 cr respectively. DIIs were net sellers to the tune of Rs 323 cr.

Rupee depreciated 13 paise to end at 67.975/$.

At its first bi-monthly monetary policy meeting of 2016, the RBI left key rates unchanged as expected, saying it would want to wait for more inflation data and the Union Budget before taking action, even as it said it would continue to remain "accommodative".

The RBI added that it was on course to meet its January 2016 target of keeping consumer inflation below 6% though it upped its January 2017 target from 4.8% earlier to 5% (subject to upward risks arising out of Pay Commission rollout). For fiscal year 2016, the RBI said it expects growth to come in at 7.4% with downside risks. For the next fiscal, it said growth is expected to increase to 7.6%.

OUTLOOK

Today morning, Nikkei and Hang Seng are trading with deep cuts of more than 3%, other Asian markets are trading with cuts in the vicinity of a percent and SGX Nifty is suggesting about 75 points lower opening for our market.

After Nifty nearly achieved 7605-7620 target, we had advised booking some profit in trading longs and trailing the stop loss in remaining ones to 7460, which was the immediate support on the hourly chart.

The benchmark, after a flattish start, plunged sharply to 7428 before closing at 7455, breaking the 7460 support.

Next downside target to eye is 7380, which is the 61.8% retracement level of the recent 7240-7600 upmove. A sustained trading below 7380 would open up the possibility of retest of 7240 bottom.

Immediate hurdle on the hourly chart is placed at 7500, with the stop loss of which trading shorts can be held on to.