Monday, May 25, 2015



WORLD MARKETS                             

Dow and S & P 500 lost about a fourth of a percent and Nasdaq ended marginally lower on Friday as investors eyed inflation data and Fed Chair Yellen's speech ahead of the long weekend.

Federal Reserve Chair Janet Yellen, in a speech, said a rate hike would be appropriate this year if the economy improves. She noted that first quarter weakness was largely transitory and that it would take several years for rates to return to normal.

Consumer Price Index (CPI) rose 0.1% last month, with the core figure discounting food and energy costs up 0.3% for the largest gain since January 2013.

The dollar index gained more than 1% with the euro lower at $1.10. Nymex oil fell $1 to $59.72 a barrel, marking the 10th positive week in a row.

European markets ended mixed with modest changes. On the data front, German business confidence slipped sightly lower in May, according to the widely watched Ifo Index. Germany's final figure for first quarter gross domestic product came in at 0.3%, confirming an earlier flash estimate.

For the week, Dow lost 0.2% while S & P 500 and Nasdaq gained 0.2% and 0.8% respectively. European markets soared 1%-3.2% with DAX leading the tally. China's Shanghai Composite gained 8.1% for the week, its strongest since the week ending December 5, 2014, when it rose 9.5%.

Greek interior minister yesterday threatened to default on loan repayments due to the International Monetary Fund.


After gaining about eight tenth of a percent, benchmark indices gave away some of the gains in the noon trade to end higher by nearly half a percent on Friday. Sensex settled at 27957, up 148 points while Nifty gained 38 points to finish at 8459. BSE mid-cap and small-cap indices gained 0.4% and 0.1% respectively. BSE IT and Healthcare indices gained the most among the sectoral indices, rising 0.9% each while Consumer Durable index and Bankex were the top losers, giving away 0.6% and 0.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 211 cr, 328 cr and 9 cr respectively. DIIs were net buyers to the tune of Rs 238 cr.

Rupee appreciated 12 paise to end at 63.52/$.

SBI reported 23.1% y-o-y rise in March quarter net profit at Rs 3742 cr. NII rose 14% to Rs 14712 cr. Gross NPAs improved to 4.25% from 4.25% q-o-q and Net NPA ratio improved to 2.1% from 2.8%. Though asset quality has seen big improvement it was aided by sale of loans to Asset Reconstruction Companies (ARCS). Sale of loans to ARCs increased to Rs 4510 crore against no amount in last quarter. During the period, its fresh restructuring was at Rs 11885 crore from Rs 2580 crore sequentially.

ITC reported lower than estimated 3.6% growth in March quarter net profit at Rs 2361 cr. Total income rose 0.6% to Rs 9293 cr. Operating margin stood at 34.9% vs 34.7% y-o-y.

For the week, Sensex and Nifty gained 2.3% and 2.4% respectively, extending the winning streak to third straight week.


Today morning Nikkei is up about half a percent on the back of weaker yen and a better-than-expected export data. Shanghai is up about a percent, other Asian markets are marginally higher and SGX Nifty is suggesting about 10 points lower opening for our market.

Readers would recall that ever since Nifty regained higher-top higher-bottom formation on the daily chart by crossing 8333 on last Monday, we have been working with major upside target of around 8600, where the trendline adjoining tops made in March and April is placed.

The benchmark touched a high of 8490 before closing at 8459, gradually moving towards this target.

Hold on to trading longs with a trailing stop loss continues to be advise. Immediate support on the hourly chart has moved up to 8380, with the stop loss of which trading longs should be held on to.

The downward sloping trendline adjoining tops made in March and April has now moved lower to around 8575, which would be the upside target to eye.

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