Monday, August 3, 2015



WORLD MARKETS                             

Dow and S & P 500 fell 0.3% and 0.2% on Friday while Nasdaq ended flat, digesting energy earnings misses and soft economic data.

Exxon posted the lowest profit in six years, while Chevron posted the worst quarterly profit in nearly 13 years.

The employment cost index showed a rise of 0.2%, the smallest increase in 33 years and below expectations of 0.6%. The 2-year yield plunged after the data, trading near 0.66%, off from 0.75% before the data release. The 10-year yield edged lower, trading near 2.20%.  In other economic news, the Chicago PMI came in at 54.7 for July, the highest since January. The final University of Michigan consumer sentiment survey came in at 93.1 for July, a decline from June's 96.1 read.

Nymex oil plunged $1.40 or 2.9% to $47.12 a barrel.

Europea markets gained upto 0.7%.

Earlier, Shanghai Composite index finished 1.1% lower, as investors remained nervous amid commodity weakness.

For the week, US indices gained 0.7%-1.2%. European markets ended mixed.


Benchmark indices surged nearly a percent and half on the last day of the week and the month, extending the winning streak to third straight day. Sensex soared 409 points to settle at 28115 while Nifty finished at 8533, up 111 points. BSE mid-cap and small-cap indices gained 1% and 0.9% respectively. Except a 0.6% and 0.3% cut in BSE Power and Oil & Gas indices respectively, all the sectoral indices ended in green with Realty and Healthcare indices leading the tally, up 2.9% and 2% respectively.

FIIs net sold stocks worth Rs 278 cr but net bought index futures and stock futures worth Rs 1155 cr and 341 cr respectively. DIIs were net buyers to the tune of Rs 1021 cr.

Infrastructure output grew at a slower pace of 3% percent in June from a six-month high rate of 4.4% registered in May, as sectors like coal and steel turned weak while oil and gas production fell.

ICICI Bank reported better-than-estimated 12% rise in quarterly net profit at Rs 2976 cr. NII rose 13.9% to Rs 5115 cr, coming in slightly below estimates. What stood out was improvement in asset quality. Gross NPA ratio fell 10 bps q-o-q to 3.68% and Net NPA ratio improved 3 bps to 1.58%.

L & T reported worse-than-expected 37.3% fall in consolidated net profit at 606.2 cr. Adjusted for exception income in Q1FY15, the profit was down 24%. Consolidated revenue grew by 6.7% to Rs 20252 cr. Operating margin declined 200 bps to 11.3%. It won new orders worth Rs 26376 cr in June quarter, down 21% compared to Rs 33408 cr worth of orders received in June 2014. The company however said that FY16 guidance for order inflow and revenue remained unchanged at 15%.

Maruti Suzuki registered a strong 20.1% y-o-y growth in July sales at 1.22 lakh units. Ashok Leyland reported 40% growth at 11022 units. M & M sold 34652 units, down 2.6%. TVS Motor registered 2% rise at 2.18 lakh units.


China's July Caixin Final manufacturing PMI has come in at 47.8, down from 49.4 in June.

Asian markets are trading with cuts of 0.5%-2% with Shanghai leading tally and SGX Nifty is suggesting about 10 points higher opening for our market.

In Thursday's report we had mentioned that 8450, the 38.2% retracement level of the recent 8655-8322 fall, is the immediate hurdle, a crossover of which can take Nifty to around 8530, which is the 61.8% retracement level of this downmove.

On Friday, Nifty surged to 8549 before closing at 8533, achieving the target mentioned above and vindicating our view.

8655, the top made on 23rd July, is the next target to eye on the way up. Immediate support on the hourly chart is placed at 8410, with the stop loss of which trading longs should be held on to.

HCL Tech and Hero MotoCorp will report their quarterly earnings today.

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