STAY LONG WITH THE STOP LOSS OF 8410

STAY LONG WITH THE STOP LOSS OF 8410

WORLD MARKETS                             

Dow and S & P 500 rose 0.4% each and Nasdaq gained 0.3% on Friday after the release of upbeat economic data and as euro zone finance ministers agreed to launch a third bailout program for Greece.

U.S. Producer Price index rose 0.2% in July, while core PPI also ticked up 0.2%, both beating estimates. Industrial production for July shot up 0.6%, above the expected 0.3% gain as auto production surged. The preliminary reading for August consumer sentiment came in at 92.9, below the estimated 93.5.

Nymex oil rose 0.6% to $42.50 a barrel.

European markets fell 0.3%-0.6%, eyeing a key European meeting on Greece's hoped-for third bailout program. Data showed the euro zone economy grew by 0.3% in the second quarter on the previous three months, narrowly missing forecasts.

For the week, US indices gained 0.6%-0.9%. European markets ended with steep cuts of 2%-4.4% with DAX and CAC leading the tally.

AT HOME

After a positive start, benchmark indices kept on moving higher through entire session and ended with hefty gains of nearly 2%. This was the highest single day gain for Nifty since 15th January and for Sensex since 8th May. Sensex soared 518 points to settle at 28067 while Nifty finished at 8519, up 163 points. BSE mid-cap and small-cap indices gained 2.4% and 1.7% respectively. All the BSE sectoral indices ended in green with Realty indices leading the tally, up 7.6%, followed by 3% rise in Bankex.

FIIs net bought stocks and index futures worth Rs 404 cr and 435 cr respectively but net sold stock futures worth Rs 71 cr. DIIs were net buyers to the tune of Rs 179 cr.

Rupee appreciated 10 paise to end at 65/$.

For the week however, Sensex and Nifty lost 0.6% and 0.5% respectively.

India's July WPI contracted for ninth straight month to -4.05% against -2.4% in June on account of easing commodity and food prices, raising the interest rate cut hopes.

BPCL reported 95.3% rise in quarterly net profit at Rs 2376 cr. GRM stood at USD 8.55 per barrel as against 3.38 y-o-y.

Hindalco Industries reported a lower-than-expected net profit at Rs 107 crore in the June quarter, down more than half of the bottomline recorded in the corresponding period last year mainly because of increased expenses and doubled finance costs. Revenues rose 7.2% to Rs 8573 cr.

Cipla reported better-than-expected 121% rise in quarterly net profit at Rs 651 cr, driven by strong operational performance and revenue growth in exports. Revenues rose 42% to Rs 3853 cr. Consolidated operating profit shot up 92% to Rs 1039 cr. Operating margin expanded by 707 bps to 27%

Finance minister Arun Jaitley on Friday launched a seven pronged plan-- Indradhanush--to revamp functioning of public sector banks. The seven elements include appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of accountability and governance reforms. 

Banks board of bureau will replace existing appointments board. Its members would be appointed in the next six months to be headed by the RBI governnor. Banks board bureau would also hold bad assets of public sector banks.

Under recapitalisation plans for Public Sector Banks, 13 banks would get Rs 20,058 crore this financial year. The rest Rs 5,000 crore would be allocated based on efficiency criteria.

India's exports contracted for the eighth straight month by 10.3% in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion. Imports too fell 10.3% to USD 35.94 bn.

OUTLOOK

Today morning, barring a half a percent higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting a flattish start for our market.

In Friday's report we had reiterated our view that 8450-8480 was the immediate resistance area where 8450 was 200-DMA and 8480 was where 34-DMA was placed.

Nifty soared 163 points to finish at 8519, crossing the 8450-8480 resistance area and generating a buy on the hourly chart.

Next target on the way up is around 8610, where the trendline adjoining recent tops on the daily chart is placed. 61.8% retracement level of the recent 8338-8530 upmove, placed at 8410, is the immediate support, with the stop loss of which trading longs should be held on to.