Monday, October 15, 2018

10492-10547 IS THE IMMEDIATE RESISTANCE ZONE; 10138 IMMEDIATE SUPPORT


 10492-10547 IS THE IMMEDIATE RESISTANCE ZONE; 10138 IMMEDIATE SUPPORT

WORLD MARKETS

US indices, after two-days of meltdown, soared 1.2%-2.3% on Friday with the S & P 500 breaking six-day losing streak.

Wells Fargo and Citigroup both reported better-than-expected earnings, along with J.P. Morgan Chase, to kick off the third quarter earnings season.

Brent crude futures fell 26 cents to $80 a barrel, having dropped by 5.6% over the previous two sessions. US oil rose 37 cents to $71.34 a barrel, after falling 5.3% during the two-day sell-off.

Main European markets fell 0.1%-0.2% while Italy and Spain tumbled 0.5% and 1.2% respectively. German September inflation numbers showed a 2 percent rise for the month, boosted by energy and food prices.

For the week, US indices fell 3.7%-4.2%. European markets fell 4.4%-5.9%, marking their worst weekly declines since March. In Asia, Shanghai nosedived 7.6% while Nikkei and Hang Seng fell 5.3% and 2.9% respectively.

US crude fell 4% for the week while Brent was off roughly 5%.

AT HOME

Sensex and Nifty soared 2.2% and 2.3% respectively, registering largest single day gain since 25th May 2016. Sesnex settled at 34733, up 732 points while Nifty added 237 points to finish at 10472. BSE mid-cap and small-cap indices rose 2.4% and 2.6% respectively. Except a 0.8% and 0.5% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Auto and Metal indices leading the tally, up 4% and 3.8% respectively.

FIIs net sold stocks worth Rs 1322 cr but net bought index futures and stock futures worth Rs 529 cr and 525 cr respectively. DIIs were net buyers to the tune of Rs 1287 cr.

Rupee appreciated 56 paise to end at 73.56/%.

HUL posted better-than-expected net profit, margin and volume growth for September quarter while revenue was in-line. Net profit rose 19.5% to Rs 1525 cr while revenue was up 11.1% at Rs 9234 cr. EBITDA was up 20% at Rs 2019 cr and margin rose 170 bps to 21.9%. Volume growth stood at 10%.

Consumer price index (CPI) in September at 3.77% increased marginally from 3.69% as reported in August.

The index of industrial production grew at 4.3% in the month of August, which is the slowest pace since May 2018. In July, IIP growth stood at 6.6%.

OUTLOOK

Today morning, Nikkei and Hang Seng are down 1.4% and 1% respectively and Shanghai is off 0.3%. SGX Nifty is suggesting about 20 points lower start for our market.

In Friday's report we had said that "10482, the top made on Wednesday, continues to be immediate hurdle, upon crossover of which, 200-DMA, placed around 10780, would be the next major hurdle to eye".

Nifty surged 237 points to close at 10472.

10492 is the top made last week while 10540-10547 is where a gap created by the gap down opening on Friday, 5th October, is placed which makes 10492-10547 immediate resistance zone, a crossover of which is required for a fresh upmove. If that happens, 200-DMA, placed around 10780, would be the next major resistance. 10138, the low made last week, continues to be important support.

Indiabulls Housing and Indusind Bank will report their quarterly earnings today.

Friday, October 12, 2018

NIFTY HOLDS 10200 ON CLOSING BASIS; 10482 CONTINUES TO BE IMMEDIATE HURDLE


NIFTY HOLDS 10200 ON CLOSING BASIS; 10482 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 plunged 2.1% each while Nasdaq fell 1.2%, extending previous day's sell-off, as investors fled riskier assets like stocks and loaded up on traditional safe havens like bonds and gold.

Treasury yields pulled back from multiyear highs following soft reading on inflation. The consumer price index rose 0.1% in September, well below the expected gain of 0.2%.

US crude tubled $2.20 or 3% to settle at $70.97 while Brent fell $2.83 or 3.4% to $80.26 a barrel. Data from US U.S. Energy Information Administration showed crude inventories climbed by 6 million barrels in the week to Oct. 5, compared with analyst expectations for an increase of 2.6 million barrels.

Trump, reacting to market correction, said "It's a correction that I think is caused by the Fed and interest rates."

Gold futures surged 2.6% to $1,224.60 per ounce.

European markets fell 1.5%-2%.

AT HOME

After plunging 3% at the open in reaction to brutal sell-off in US markets, benchmark indices recouped some of the losses through the choppy session to end lower by 2.2%. Sensex settled at 34001, down 760 points while Nifty lost 225 points to finish at 10234. Sensex and Nifty closed at the lowest level since 4th April 11th April 2018 respectively. BSE mid-cap and small-cap indices fell 2.3% and 1.4% respectively. Except 2.9% and 0.2% higher Oil & Gas and Energy indices respectively, all the BSE sectoral indices ended in red with IT and Realty indices leading the losses, down 3.2% each.

FIIs net sold stocks and index futures worth Rs 2869 cr and 1143 cr respectively but net bought stock futures worth Rs 227 cr. DIIs were net buyers to the tune of Rs 1888 cr.

Rupee appreciated 8 paise to end at 74.12/$.

TCS reported lower-than-expected net profit and constant-currency revenue growth for the September quarter but managed to outperform on EBIT and met estimate on margins front. Dollar revenue growth at 3.2% was in-line with estimates but constant currency revenue growth at 3.7% was a miss. Net profit rose 7.6% to Rs. 7901 cr. Margins improved 150 bps to 26.5%, a seven .

The government yesterday announced increased import duty on several electronic items and telecom equipment to rein in current account deficit (CAD) and stabilise the rupee.

OUTLOOK

Today morning, Hang Seng is up 0.3% while Nikkei and Shanghai are down half a percent each. SGX Nifty is suggesting about 50 points higher start for our market.

In yesterday's report we had said that "10200 continues to be immediate support, upon sustained trading below which, 9951 would be the next major support to eye". Nifty, after touching a low of 10138 in the initial trade, rebounded to end at 10234, holding on to 10200 support on closing basis.

10138, the bottom made yesterday, is now the immediate support, below which, 9951 would be the next crucial support to eye. 10482, the top made on Wednesday, continues to be immediate hurdle, upon crossover of which, 200-DMa, placed around 10780, would be the next major hurdle to eye.

HUL and Karnataka Bank will report their quarterly earnings today.

September CPI will be released today and is expected to inch up to 4.16% from 3.69% in August. August IIP growth is expected to ease to 4% from 6.6%.

Thursday, October 11, 2018

NIFTY SET TO REVISIT 10200 SUPPORT


NIFTY SET TO REVISIT 10200 SUPPORT

WORLD MARKETS

US indices nosedived 3.2%-4.1% with the Dow and S & P 500 suffering their worst fall in eight months on worries over rising interest rates and sell-off in technology shares. Nasdaq fell the most since June 2016.

Amazon declined 6.2%, Netflix slid 8.4% while Facebook and Apple fell more than 4% each.

The producer price index rose 0.2% in September and was up 2.8% on a year-over-year basis.

Trump, expressing his view on rising interest rates said "I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,". Commenting on the sell-off on Wall Street, Trump said: "It's a correction we've been waiting for for a long time, but I really disagree with what the Fed is doing."

US crude tumbled 2.4% to settle at $73.17 while Brent was down 2.2% at$83.10.

European markets fell 1%-2.2%. UK GDP grew 0.7% over previous quarter.

AT HOME

Sensex and Nifty soared 1.4% and 1.5% respectively, registering the largest percentage gain in nearly 6 months. Sensex added 461 points to settle at 34760 while Nifty finished at 10460, up 159 points. BSE mid-cap and small-cap indices climbed 3.7% and 3.2% respectively, registering best day since February and March 2016 respectively. Except 1.5% and 1.1% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Realty and Consumer Durable indices leading the gains, up 4.4% and 3.8% respectively.

FIIs net sold stocks and index futures worth Rs 1096 cr and 1487 cr respectively but net bought stock futures worth Rs 2280 cr. DIIs were net buyers to the tune of Rs 1893 cr.

Rupee appreciated 19 paise to end at 74.20/$.

ZEE Entertainment reported better than expected quarterly numbers on all counts. Net profit fell 38.2% to Rs 387 cr while revenue rose 25% to Rs 1976 cr. EBIDTA climbed 38% to Rs 676 cr and margin was up 320 bps at 34.2%. Advertising revenue rose 22.7% to Rs 1211 cr and subscription revenue was up 21.3% at Rs 608 cr. 320 34.2

OUTLOOK

Today morning, Asian markets are trading with cuts of 2.55-3.5% and SGX Nifty is suggesting more than 200 points lower start for our market.

In yesterday's report we had reiterated the view that 10200, the low made on Monday, continues to be immediate support while 10400, in the vicinity of which tops made on Monday and Tuesday were placed, was the immediate hurdle.

Nifty crossed 10400 hurdle and touched a high of 10482 before closing at 10460 but is set to open around 10250 today.

10200 continues to be immediate support, upon sustained trading below which, 9951 would be the next major support to eye.

10482, the top made yesteray, would now be the immediate hurdle.

TCS will report its quarterly earnings today.

Wednesday, October 10, 2018

10200 CONTINUES TO BE IMMEDIATE SUPPORT; 10400 IMMEDIATE HURDLE


10200 CONTINUES TO BE IMMEDIATE SUPPORT; 10400 IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 fell 0.2% and 0.1% respectively while Nasdaq ended flat, with the S & P 500 extending the losing streak to fourth day.

US-10 year note yield touched a high of 3.252%, its highest since May 2011, before slipping to 3.21%. U.S. 30-year yield hit a four-year high at 3.439 percent.

Trump said that he did not like the Federal Reserve's decision to continue hiking interest rates.

US oil rose 67 cents to $74.96 and Brent added $1.09 to settle at $85 a barrel.

IMF cut its global economic growth outlook for this year and the next, citing trade uncertainties including the new NAFTA agreement, Brexit and the battle of tariffs between the U.S. and China.

European markets gained 0.1%-1.1% with Italy on the top. The U.K. pound surged to $1.31 handle after news reports suggested that EU and U.K. divorce terms could be resolved by October 15th.

AT HOME

Benchmark indices ended lower by half a percent after a rangebound but choppy session. Sensex settled at 34299, down 175 points while Nifty lost 47 points to finish at 10301. BSE mid-cap and small-cap indices fell 0.2% and 0.4% respectively. BSE Consumer Durable and Auto indices tumbled 3.9% and 2.6% respectively, becoming top losers among the sectoral indices while Metal and Healthcare gained 1% each, becoming top gainers.

FIIs net sold stocks worth Rs 1243 cr but net bought index futures and stock futures worth Rs 80 cr and 377 cr respectively. DIIs were net buyers to the tune of Rs 1526 cr.

Rupee depreciated 33 paise to end at fresh record low of 74.39/$.

Tata Motors nosedived 13% after the company-owned Jaguar Land Rover (JLR) reported a 12.3% decline in global sales in September, hit by lower demand in China.

OUTLOOK

Today morning, Hang Seng is up 0.7% while Nikkei and Shanghai are up about 0.2% each. SGX Nifty is suggesting about 40 points higher start for our market.

In yesterday's report we had said that 10198, the low made Monday, is the immediate support while immediate hurdle on the hourly chart is placed around 10740.

Nifty, after touching a high of 10398, slipped in last half an our to end at 10301 and is set to open higher today.

10200 continues to be immediate support, upon sustained trading below which, 9951, the bottom made in March, would be the next major support to eye. 10400, in the vicinity of which tops made yesterday and day before are placed, is the immediate hurdle above which 10650-10780 would be the bigger resistance zone to eye.

Zee Entertainment will report its quarterly earnings today.

Tuesday, October 9, 2018

10200 IS IMMEDIATE SUPPORT; 10740 IMMEDIATE HURDLE


10200 IS IMMEDIATE SUPPORT; 10740 IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.2%, while S & P 500 ended little changed and Nasdaq fell 0.7% yesterday with the Dow breaking two-day losing streak while S & P 500 and Nasdaq fell for the third consecutive day.

US crude, after touching a low of $73.07, recovered to close 5 cents lower at $74.29 while Brent crude, after touching a low of $82.66, rebounded to end at $83.73, down 43 cents compared to previous close.

European markets fell 1.1%-2.4% with Italy topping the losses as Italian government bond yields hit highest level in 4-1/2 years amid renewed fears over Italy's budget plans. The EU reiterated concerns over Italy's budget plans over the weekend. In response, Italy said it would "not retreat" from its current spending plans.

AT HOME

Benchmark indices managed to end higher by three tenth of a percent after a volatile session to break three-day losing streak. Sensex settled at 34474, up 97 points while Nifty added 32 points to finish at 10348. BSE mid-cap and small-cap indices however ended with cuts of 2% each. BSE Energy and Oil & Gas indices soared 4.4% and 3.3% respectively, becoming top gainers among the sectoral indices while Metal and Realty indices plunged 3.2% and 3.1% respectively, becoming top losers.

FIIs net sold stocks worth Rs 1805 cr but net bought index futures and stock futures worth Rs 918 cr and 1334 cr respectively. DIIs were net buyers to the tune of Rs 1974 cr.

Rupee depreciated 29 paise to end at fresh record low of 74.06/$.

OUTLOOK

Today morning, Nikkei is down a percent while Hang Seng and Shanghai are little changed. SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had said that "10261, the bottom made on Friday, coincides with a trendline adjoining bottoms made in September 2017 and March 2018" and that upon sustained trading below 10261, 9951, the bottom made in March, would be the next meaningful support to eye.   

Nifty, after touching a low of 10198, rebounded in last hour to end at 10348, holding the trendline support mentioned above on closing basis.

10198, the bottom made yesterday, is now the immediate support below which 9951 would be the next major support to eye.

Immediate hurdle on the hourly chart is placed at 10740.

Monday, October 8, 2018

9951 NEXT MAJOR SUPPORT BELOW 10261; 10760 IS IMMEDIATE HURDLE


9951 NEXT MAJOR SUPPORT BELOW 10261; 10760 IS IMMEDIATE HURDLE

WORLD MARKETS

US indices fell 0.6%-1.2% on Friday as interest rates rose to multi-year high following mixed employment data.

The U.S. economy added 134,000 in September, well below the expected gain of 185,000. However, the U.S. unemployment rate fell to 3.7%, its lowest level since 1969. Wages grew by 2.8% y-o-y to match expectations.  Job gains for August was revised sharply upwards to an addition of 270,000 jobs from 201,000.

The 10-year note yield rose to 3.24% and hit a fresh high since 2011.

U.S. trade deficit widened to $53.2 billion in August.

WTI crude rose 1 cent to $74.34 a barrel and Brent fell 20 cents to $84.38.

European markets fell 0.6%-1.4%. Basic resources stocks were the worst performers Friday amid heightened global trade war fears.

For the week, Dow ended flat while S & P 500 fell 1% and Nasdaq plunged 3.2%, registering largest weekly fall since the week ended 23rd March 2018. In Europe, DAX was flat while FTSE and CAC tumbled 2.6% and 2.4% respectively. In Asia, Hang Seng nosedived 4.2% while Nikkei was off 0.6%. Shanghai was shut for the week. Ishare MSCI Emerging index fund tumbled 4.8%.

AT HOME

Bloodbath on dalal street extended to the last day of the week as Sensex and Nifty nosedived 2.2% and 2.7% respectively to close at the lowest level since 23rd May and 4th April respectively. Sensex settled at 34376, down 792 points while Nifty lost 282 points to finish at 10316. BSE mid-cap and small-cap indices fell 2.7% and 2% respectively. BSE Oil & GAs and Energy indices collapsed 12.7% and 8.5% respectively, becoming top losers among the sectoral indices while IT, Teck and Consumer Durable indices were the sole gainers, up 1.1%, 0.7% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 3370 cr and 1610 cr respectively but net bought stock futures worth Rs 120 cr. DIIs were net buyers to the tune of Rs 1902 cr.

Rupee depreciated 19 paise to end at 73.77/$.

For the week, Sensex and Nifty fell 5.1% and 5.6% respectively, registering largest weekly fall since 12th February 2016.

RBI's Monetary policy committee kept the repo rate unchanged, as against the widely expected 25-bps hike. It however changed its policy stance from "Neutral" to "Calibrated tightening". The inflation forecast for second half of FY19 was cut to 3.9%-4.5% from 4.8% earlier while FY19 GDP growth estimate was kept unchanged at 7.4%.

OUTLOOK

Today, Shanghai has opened after a week-long holiday and is trading with cuts of nearly 2%. Nikkei is shut and Hang Seng is up about half a percent. SGX Nifty is trading around 10290, which is about 50 points lower compared to Friday's close of Nifty futures.

Readers would recall that after 200-DMA support, placed at 10775, was taken out, we had given target of 10550, the 67% retracement level of the entire 9951-10760 upmove.  After the same was hit on Thursday, we had given next level of 10350 on Friday, which is where the 20-month moving average is placed. We had also said that if 10350 does not hold, one should be prepared for the retest of 9951 bottom.

Nifty, on Friday, plunged to 10261 before closing at 10316, achieving 10350 target and vindicating our view.

10261, the bottom made on Friday, coincides with a trendline adjoining bottoms made in September 2017 and March 2018. Upon sustained trading below 10261, 9951, the bottom made in March, would be the next meaningful support to eye.

One must remember that the momentum on the downside has picked up and in the event of even 9951 not holding, 9687, the bottom made in September 2017, followed by 34-month moving average, placed around 9460, would be next major supports to eye.

10760 is the immediate hurdle on the hourly chart.

Friday, October 5, 2018

NIFTY ACHIEVES 10550 TARGET; 10417, 10350 NEXT SUPPORTS TO EYE


NIFTY ACHIEVES 10550 TARGET; 10417, 10350 NEXT SUPPORTS TO EYE

WORLD MARKETS

Dow and S & P 500 fell 0.8% each while Nasdaq plunged 1.8% on worries over rising interest rate.

The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2%.

Weekly initial jobless claims fell to 207,000, a near 49-year low.

US crude fell 2.7% to $74.33 while Brent was off 1.9% at $84.64 a barrel.

European markets fell 0.4%-1.5% with CAC leading the losses. Sterling climbed almost 0.6% against the dollar amid reports that the U.K. could join a customs union within the European Union.

AT HOME

Market mayhem continued as Sensex and Nifty nosedived 2.2% and 2.4% respectively, suffering worst percentage fall since 2nd February 2018 and 11th November 2016 respective and closing at the lowest level since 28th June 2018 and 24th May 2018 respectively. Sensex lost 806 points to settle at 35169 while Nifty finished at 10599, down 259 points. BSE mid-cap and small-cap indices fell 1.9% and 2.1% respectively. All the BSE sectoral indices ended in red with Oil & Gas and Energy indices leading the losses, down 6.6% each, followed by 3.3% lower IT index.

FIIs net sold stocks, index futures and stock futures worth Rs 2761 cr, 3157 cr and 365 cr respectively. DIIs were net buyers to the tune of Rs 1824 cr.

Rupee depreciated 24 paise to end at 73.58/$.

In a relief to fuel consumers, the Central Government reduced the prices of petrol & diesel by Rs 2.5 per litre effective immediately. The central government reduced the excise duties on petrol & diesel by Rs 1.5 per litre. While, the balance hit of Rs 1 will be taken by the oil marketing companies (OMC). Owing to this news, HPCL, BPCL and IOC plunged sharply. Marketing margins for these companies will come under pressure as they absorb the cost of Rs 1. The Rs 1.5 excise hit which the government will absorb, will lead to reduction in revenues for the government. However the Finance Minister stated that despite the hit in this excise revenue, the government remains committed to its fiscal deficit target of 3.3% of gross domestic product.

ICICI Bank soared following the news that MD and CEO Chanda Kochhar has quit the bank with immediate effect and Sandeep Bakshi has been appointed as MD and CEO for a period of five years.

OUTLOOK

Today morning, Nikkei and Hang Seng are down 0.3% each and SGX Nifty is suggesting about 60-80 points lower start for our market.

In yesterday's report we had said that upon sustained trading below 200-DMA placed around 10775, 10640 and 10550, which are the 61.8% and 67% retracement levels of the entire 9951-11760 upmove, would be the next downside levels to eye.

Nifty broke 200-DMA support at the open itself and plunged all the way to 10547 before closing at 10599, achieving both the targets mentioned above and vindicating our view.

A gap down opening today would take Nifty back in the vicinity of yesterday's low.

10418, the low made in May, is now the next downside support to eye below which 10350, where 20-month moving average is placed, would be the next crucial support. In the event of even 10350 not holding, be prepared for the retest of 9951 mark. 10820-10866, the erstwhile support zone, would now act as the immediate hurdle.

Key event to watch out today would be RBI's monetary policy review where a 25 bps repo rate hike is widely expected. Markets would also watch out whether the stance is changed from neutral to hawkish and other thinks like RBI's view on liquidity, debt market, rupee and growth.