8545 CONTINUES TO BE IMMEDIATE HURDLE; 8270 CRUCIAL SUPPORT

8545 CONTINUES TO BE IMMEDIATE HURDLE; 8270 CRUCIAL SUPPORT

WORLD MARKETS                             

US indices gained between 0.1%-0.4% yesterday with the Nasdaq setting a new, all-time closing record, topping the previous high of 5048.62 set in March 2000.

New home sales for March came in weaker than expected, at 481,000 in March, versus the 510,000 unit estimate. Weekly jobless claims showed an increase of 1,000 to 295,000. The preliminary manufacturing PMI fell to 54.2 in April from the final March read of 55.7.

IBM climbed 3% after spiking more than 3.5% on positive follow-through from its earnings report on Monday. AT&T jumped more than 4% after reporting earnings after the close Wednesday that beat estimates on revenue that came in slightly below expectations. Caterpillar rose after beating expectations on both earnings per share and revenue. On the flip side, 3M, GM and PepsiCo fell after missing earnings estimates.

Corporate news and the highest settlement in crude for 2015 sent telecommunications and energy higher.

Nymex oil surged $1.58 or 2.8% to $57.74 a barrel.

European markets ended mixed. FTSE gained 0.4% while DAX, CAC and Italy lost 0.5%-1.2% with DAX leading the fall after German flash composite PMI fell to 54.2 in April from an eight-month peak of 55.4 in March. For the Eurozone, the reading stood at 53.5, down from 54 in March.

Greek Prime Minister called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor. Both sides called the discussions constructive.

AT HOME

After gaining nearly a percent in the initial trade, benchmark indices tumbled a percent and quarter from the top of the day to end lower by about four tenth of a percent. Sensex lost 155 points to settle at 27735 while Nifty finished at 8398, down 31 points. BSE mid-cap index gained 0.6% while the small-cap index lost 0.2%. BSE Metal and Consumer Durable indices gained 1.6% and 1.2% respectively, becoming top gainers among the sectoral indices while Capital Goods and Healthcare indices were the top losers, giving away 0.9% respectively.

FIIs net sold stocks and index futures worth Rs 277 cr and 585 cr respectively but net bought stock futures worth Rs 497 cr. DIIs were net buyers to the tune of Rs 560 cr.

Rupee plunged 50 paise to end at 3-month low of 63.32/$.

HDFC Bank's reported in-line with estimated 20.6% rise in net profit at Rs 2807 cr. NII stood at Rs. 6013 cr, up 21.4%, slightly better than estimated 20.6% growth. Gross NPAs stood at 0.9% from 1% q-o-q while net NPA stood at 0.2%, improving from 0.3%.

Cairn India posted a fourth quarter loss of Rs 241 cr on revenues of Rs 2677 cr as against a profit of Rs 1350 cr on revenues of Rs 3504 cr in the third quarter. EBIDTA stood at Rs 727 cr Vs Rs 2113 cr.

RBI yesterday revised priority sector lending (PSL) norms, adding new segments such as micro, small and medium enterprise (M SME), social infrastructure and renewable energy under the ambit of priority sectors. Further, the Reserve Bank outlined targets of 8% and 7.5% (of a bank’s total loan book) for small and marginal farmers and micro enterprises, respectively, which shall be achieved in a phased manner by March 2017. The RBI also maintained the PSL target for the weaker section at 10 percent.

OUTLOOK

Today morning Nikkei and Shanghai are down more than half a percent but other Asian markets are trading with gains in the vicinity of half a percent. SGX Nifty is suggesting about 10 points higher opening for our market.

In yesterday's report we had mentioned that while the recovery seen on Wednesday was expected to extend itself, a crossover of 8545 would be required to generate a buy on the hourly chart.

The benchmark, after touching a high of 8505 in the initial trade, fell later to end at 8398.

8545 continues to be immediate hurdle a crossover of which is required to generate a buy on the hourly chart. On the way down, 8270 continues to be crucial support to eye.

Infosys will report its quarterly earnings today. Dollar revenues are expected to rise 0.3% q-o-q to $2224 mn. In constant currency basis, the growth is seen between 2%-2.5%. EBIT margin is expected at 25.95%, down from 26.74%. Net profit is expected to fall 2.7% to Rs 3161 cr. FY16 revenue guidance is seen at 9-11% in constant currency terms.

An important meeting of Euro zone finance ministers is scheduled today, where Greece's progress in its reform pledges will be reviewed. It remains to be seen whether the country reaches an agreement with creditors on a comprehensive list of reforms to get the remaining 7.2 billion euros from its bailout.