BOJ STATUS CO, EXPIRY JITTERS PUNCTURE NIFTY RALLY
Dow and Nasdaq plunged 1.2% each and Nasdaq fell 0.9% yesterday. This was the first 200 plus point fall for the Dow since Feb. 11.
After opening lower, tracking a steep fall in Nikkei on the back of status-co from Bank of Japan, US indices attempted to recover all the losses helped by gains in Facebook but were again dragged down by Apple which fell 3.1%, extending Wednesday's 6% plunge on disappointing earnings. Facebook soared 7.2% and touched a fresh all-time high after reporting quarterly earnings well above expectations on both the top and bottom line, helped by a sharp increase in mobile advertising revenue.
The Bank of Japan maintained the pace of its asset purchase program and kept steady its 0.1% negative rate it applies to some deposits. The central bank also cut its inflation forecasts and again pushed back the timing for hitting its 2% price target by six months. Nikkei plunged 3.5% and yen strngthened to trade near 108 a dollar.
Back in the US, the first quarter U.S. GDP advance read was 0.5%, the slowest pace since the first quarter of 2014. Consumer spending increased at a 1.9%, the slowest since the first quarter of 2015 and down from the fourth quarter's 2.4% rate. Weekly jobless claims rose to 257,000, but the four-week moving average of claims fell to the lowest since December 1973.
European markets ended mixed. Italy climbed 1.2% and Germany gained 0.2%. FTSE ended flat while Spain lost 0.7%. Basic resources sector posted solid gains following uptick in metal prices.
Nymex oil rose 70 cents or 1.5% to $46.03 a barrel, its highest since Nov. 4, 2015. Dollar index fell about 0.6%. Gold gained $16 to $1266 an ounce.
Surprised by the decision of Bank of Japan to hold off on expanding monetary stimulus, world equities came under pressure and Indian indices, also weighed down by the derivative expiry, plunged 1.7% to close at the lowest levels since 12th April. Sensex settled at 25603, down 461 points while Nifty lost 133 points to finish at 7847. BSE mid-cap and small-cap indices lost 0.8% and 1% respectively. Except a 1.7% rise in BSE Realty index, all the sectoral indices ended in red with Oil & Gas and Metal indices leading the fall, down 2.2% each.
FIIs net bought stocks and index futures worth Rs 120 cr and 103 cr respectively but net sold stock futures worth Rs 1351 cr. DIIs were net sellers to the tune of Rs 416 cr.
Rupee depreciated 8 paise to end at 66.52/$.
HCL Tech reported lower than expected 1.3% growth in dollar revenue at USD 1587 mn. Rupee revenue rose 3.4% to Rs 10698 cr while net profit rose 0.3% to Rs 1926 cr.
ACC reported lesser-than-expected 4.2% dip in Jan-March quarter net profit at Rs 237 cr. Total income fell 2.9% to Rs 2991 cr. EBIDTA fell 29% to Rs 433 cr while EBIDTA margin stood at 14.5% vs 19.8% y-o-y.
Ambuja Cement reported better-than-expected operational and net profit numbers. The company saw 4.4% dip in net profit at Rs 304 cr. Revenue fell 0.7% to Rs 2444 cr and EBIDTA was down 12% at Rs 450 cr. Operating margin stood at 18.4%, down from 20.7% y-o-y but better-than the expected 16-17% level. Volume grew a sharp 9.5% to 5.86 mn tonne. 18.4% 20.7% 16-17%
Idea Cellular reported lower-than-expected 25% dip in net profit at Rs 576 cr. Revenue rose 5.3% to Rs 9484 cr and EBIDTA grew 15.6% to Rs 3616 cr, significantly better than the estimates. EBIDTA margin stood at 38.1%, a sequential jump of nearly 340 bps and best the company has delivered in nearly three years.
Today, Nikkei is closed for a public holiday. Shanghai is flat but other Asian markets are trading with cuts of 0.5%-1.25% and SGX Nifty is suggesting about 30 points lower opening for our market.
Yesterday, before the Bank of Japan decision, SGX Nifty was suggesting a sharply higher start above the 7980 hurdle for Nifty. But the surprise status-co from the BoJ resulted in a flattish start, after which Nifty, also weighed down by the expiry jitters, plunged 133 points to end at 7847.
After yesterday's fall, Nifty is now back in the sell mode on the hourly chart. 7822, the bottom made on Tuesday, is the immediate support, upon sustained trading below which 34-DMA, placed around 7700, would be the next target to eye.
Immediate resistance on the hourly chart is placed around 7910, with the stop loss of which trading shorts can be held on to.
ICICI Bank will report its quarterly earnings today.