NIFTY VIOLATES IMPORTANT SUPPORTS; HEADED TO 8080

NIFTY VIOLATES IMPORTANT SUPPORTS; HEADED TO 8080

WORLD MARKETS                             

After a positive start, US indices saw a sustained downward move through the session to end lower by 0.2%-0.6% as investors eyed earnings and looked ahead to the beginning of the two-day Federal Reserve meeting on Tuesday.

Biotech/Pharma shares led the losers with Mylan losing 5.5% after rejecting Teva's unsolicited $40 bn bid but remained open to future talks.

Markit's flash Services PMI slipped to 57.8 in April from a final reading of 59.2 in March.

European markets gained 0.5%-1.9% with investor sentiment boosted by a reshuffle of the team of Greek officials that are negotiating with its creditors.

Nymex crude settled down 16 cents at $56.99 a barrel. Gold surged 2.4% at $1203, the largest percentage gain since Jan 15.

AT HOME

After a marginally higher start, benchmark indices saw a relentless fall through the session to end lower by nearly a percent, closing at the lowest level since 7th January. Sensex slumped 261 points to settle at 27177 while Nifty finished at 8214, down 91 points. BSE mid-cap and small-cap indices lost 2.1% and 2.8% respectively. All the BSE Sectoral indices ended in red with Realty and Healthcare indices leading the tally, giving away 4% and 3.2% respectively.

FIIs net sold stocks and index futures worth Rs 1749 cr and 421 cr respectively but net bought stock futures worth Rs 916 cr. DIIs were net buyers to the tune of Rs 1668 cr.

Rupee appreciated 8 paise to end at 63.48/$.

Maruti Suzuki beat expectations on every parameter with the profit rising a whopping 60.5% to Rs 1284 cr, supported by higher volumes and favorable foreign exchange. Revenues rose 12.5% to Rs 13625 cr. Operating margin expanded by 540 to 15.8%.

ICICI Bank reported roughly in-line with estimated net profit and better-than-estimated NII but asset quality worsened. Net profit rose 10.2% to Rs 2922 cr while NII rose 16.6% to Rs 5079 cr. Net interest margin improved to 3.57% from 3.46%. Provisions for the bad loans jumped 88.4% to Rs 1345 cr y-o-y. Gross NPAs rose 75 bps q-o-q to 3.78% while net NPAs climbed 64 bps to 1.61%.

OUTLOOK

Today morning, except a 0.7% higher Nikkei, other Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 20 points lower opening for our market.

Nifty yesterday plunged 91 points to end at 8214, breaking the important support of 200 DMA placed at 8260 as well as the 8269 bottom made in March.

Setup on the daily chart continues to be negative and next logical target would be around 8080, where the lower band of bollinger on the weekly chart is placed.

Immediate resistance on the hourly chart is placed around 8360, with the stop loss of which short positions should be held on to.

Bharti Airtel and Idea will report their quarterly earnings today.