NIFTY STRUGGLES TO CROSS 8225 HURDLE; 8100 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY STRUGGLES TO CROSS 8225 HURDLE; 8100 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices ended with gains of upto 0.3% yesterday as gains in utility counters offset a retreat in energy plays.

Nymex oil fell $2.53 or 5% to $47.10 a barrel, giving back more than half of last week's rally of nearly 9%. Gold rose $9 to $1164 an ounce.

Dell announced a $67 billion cash and stock deal with MSD Partners and Silver Lake to buy cloud computing firm EMC.

European markets, except a 0.2% higher DAX, fell 0.3%-0.8%. Glencore sank over 6% after the London-listed mining giant said it planned to sell copper mines as part of efforts to slash its debt pile.

Earlier, the Shanghai Composite surged more than 3% and the Hang Seng closed up 1.2% amid expectations that Beijing would roll out further stimulus measures to ward off a sharper slowdown.

AT HOME

After gaining more than half a percent in the opening trade, benchmark indices tumbled more than a percent from the top of the day to end lower by about six tenth of a percent. Sensex settled at 26904, down 175 points while Nifty lost 46 points to finish at 8144. BSE mid-cap index however gained 0.2% and the small-cap index ended flat. BSE IT and Teck indices plunged 2% and 1.8% respectively, becoming top losers among the sectoral indices while Metal and Power indices gained 1.2% and 0.9% respectively.

Infosys stock tumbled 3.8% despite reporting better-than-estimated quarterly numbers as the company did not raise full year revenue growth guidance and CFO Rajiv Bansal announced a surprise resignation. A dip in volume growth, a slight uptick in attrition rate and an ESOP that could lead to a 2% equity dilution going forward also weighed on the sentiment. Dollar revenue for the quarter surged 6%-the steepest in the last 16 quarter-to USD 2.392 bn. Net profit rose 12.1% to Rs 3398 cr and rupee revenues grew 8.9% to Rs 15635 cr. Operating margin improved by 153 bps to 25.53%. The company maintained its constant currency revenue growth of 10-12% for the full year but tweaked its dollar revenue guidance to 6.9-8.4% from 7.2%-9.2%.

Bank OF Baroda fell 3.4% after the Central Bureau of Investigation (CBI) raided 50 locations in connection with alleged irregularities at one of its Delhi branch. Reports said the raids were in connection with suspected money laundering involving around Rs 6,000 crore.

FIIs net bought stocks and index futures worth Rs 318 cr and 743 cr respectively but net sold stock futures worth Rs 65 cr. DIIs were net sellers to the tune of Rs 175 cr.

Rupee depreciated 1 paise to end at 64.75/$.

The Consumer Price Inflation for the month of September came in at 4.41%, up from 3.66% in August but lower than the estimated figure of 4.49%.

Index of industrial production (IIP) for August came in near 3-year high at 6.4% versus 4.2% seen in July.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that having achieved the 8225 target, next target for Nifty is 8350-8380 and had advised holding on to trading longs with the stop loss of 8100.

The benchmark, after touching a high of 8244 in the opening trade, slipped to end at 8144.

8100 continues to be immediate support, a sustained trading below which will generate a sell on the hourly chart. On the way up a sustained trading above 8225 can take the benchmark to 8350-8380 region.

Traders are advised to hold existing longs with the stop loss of 8100.

TCS will report its quarterly earnings today.