Wednesday, October 28, 2015



WORLD MARKETS                             

Dow and S & P 500 lost a fourth of a percent and Nasdaq fell 0.1% yesterday on the back of some disappointing data and ahead of Wednesday's Fed statement.

Data from China showed that industrial profits slipped 0.1% in September after an 8.8% tumble in the previous month.

Back in the US, durable goods orders showed a decline of 1.2% in September, following a negative read in August. Consumer confidence came in at 97.6 for October, missing expectations. The S&P/Case-Shiller 20-City home price index increased 5.1% y-o-y in August, matching expectations.

IBM plunged 4% after disclosing the SEC is conducting an investigation into the IBM's accounting treatment of certain transactions.

Energy stocks eased as Nymex oil fell 78 cents to end at 2-month low of $43.20 a barrel.

European markets lost 0.8%-1.5% with energy and mining shares leading the losses.


After a gap down opening, benchmark indices traded in a narrow range through rest of the session to finally end lower by nearly a third of a percent, extending the losing streak to second straight day. Sensex settled at 27253, down 109 points while Nifty lost 28 points to finish at 8233. BSE mid-cap and small-cap indices however gained 0.2% each. Except a 0.4% and 0.1% rise in BSE Auto and FMCG indices respectively, all the sectoral indices ended in red with Consumer Durable and Capital Goods indices leading the tally, down 1.4% and 0.7% respectively.

FIIs net bought stocks and index futures worth Rs 10 cr and 624 cr respectively but net sold stock futures worth Rs 642 cr. DIIs were net sellers to the tune of Rs 165 cr.

Rupee depreciated 1 paise to end at 64.965/$.

Maruti Suzuki matched expectations on bottomline and topline front while operational performance was ahead of estimates. Net profit shot up 42% y-o-y to Rs 1226 cr while revenue increased 13% to Rs 13934 cr. Operating profit surged 49% to Rs 2269 cr and margin expanded by 390 bps to 16.3%.

Axis Bank met street expectation with net profit rising 19% to Rs 1916 cr. NII grew by 15.2% to Rs 4062 cr. Gross as well as net NPA remained flat sequentially at 1.38% and 0.48% respectively. However, details later revealed that bad loans worth Rs 1850 were sold to Asset Reconstruction Companies and two accounts amounting to Rs 1500 cr were restructured under 5-25 scheme. If these are added to slippages, the figure will come to around Rs 4000 cr as against Rs 1920 cr in the previous quarter.

Lupin disappointed as consolidated net profit plunged 35% to Rs 409 cr on weak operational performance and slow revenue growth that impacted by US and Japan businesses. Lower other income also hit bottomline. Revenue rose 4.7% to Rs 3321 cr. Operating margin declined 610 bps to 20.2%.

Vedanta reported 41% dip in net profit at Rs 974 cr on the back of continued weakness in commodity prices. Net sales fell 16% to Rs 16561 cr. Expected figures were Rs 441 cr and Rs 15800 cr. Operating profit fell 36.3% to Rs 4000 cr and margin contracted by 790 bps to Rs 24.2%. Here the expected figures were Rs 3690 cr and 23%.


Today morning, except half a percent higher Nikkei, other Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting about 15 points lower opening for our market.

For past some time, we had been advising booking profits in 8320-8380 region considering the fact that 8320 is where 34-week moving average is placed and 8380 is 200-DMA.

The benchmark, after touching a high of 8336 on Monday saw a severe profit booking and has come down to 8233, vindicating our view.

A breach of 8217, the low made yesterday, would confirm a sell on the hourly chart and would open up the space for the further downside till about 8100, where the immediate previous bottom on the daily chart is placed.

Traders can initiate short positions once Nifty sustains below 8217 with the stop loss of 8270, which is the immediate resistance on the hourly chart.

Ambuja Cement will report its quarterly earnings today.

US Fed concludes its two day meeting today where it is expected to keep rates unchanged but leave the door open for the chance of a December rate hike.

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