Friday, May 27, 2016



WORLD MARKETS                             

Dow fell 0.1%, S & P 500 ended almost flat while Nasdaq managed to gain 0.1% yesterday, looking forward to hear from Fed Chair Yellen who is expected to answer questions Friday afternoon as she receives an award at Harvard University.

Durable goods orders jumped 3.4% last month. However, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8% for a third-straight month. Initial jobless claims fell to a seasonally adjusted 268,000 for the week ended May 21. Pending home sales rose 5.1% in April from the previous month to hit their highest level in a decade.

US oil, after hitting a high of $50 a barrel, retreated to end 8 cents lower at $49.48 a barrel.

In Europe, FTSE was little changed while DAX and CAC gained 0.7% each.


It was second consecutive day of blockbuster gains as Sensex and Nifty climbed 1.9% and 1.7% respectively to close at the highest level since 4th November 2015 and 29th October 2015 respectively. Sensex soared 486 points to settle at 26367 while Nifty finished at 8070, up 135 points. BSE mid-cap and small-cap indices gained 1% and 0.9% respectively. Except a flat Healthcare index, all the BSE sectoral indices gained with Capital Goods index leading the tally, up 8.8% followed by Industrial index, up 4%.

FIIs net bought stocks, index futures and stock futures worth Rs 581 cr, 2348 cr and 1215 cr respectively. DIIs were net buyers to the tune of Rs 685 cr.

Rupee appreciated 16 paise to end at 67.16/$.

For the May derivative series, Sensex and Nifty gained 3% and 2.8% respectively.

ONGC, supported by other income and exceptional gain, reported over 3-fold rise in fourth quarter net profit at Rs 4416 cr. Revenue declined 11.4% to Rs 16385 cr. Operating profit plunged 44.2% to Rs 4487 cr and margin contracted by 1560 bps to 27.4%.

BPCL reported 10.6% fall in Jan-March quarter net profit at Rs 2549 cr. GRM's fell to $6.30/bbl from $7.67/bbl.


Japan's core CPI fell 0.3% in April, likely putting additional pressure on the Bank of Japan to ease at its next monetary policy meeting.

Today morning Shanghai and Hang Seng are trading with modest cuts, other Asian markets are trading modestly higher and SGX Nifty is suggesting about 15 points higher opening for our market.

Readers would recall that we had recommended going long on Nifty upon sustained trading above 7820 for an initial target of 7940. In yesterday's report we had mentioned that a decisive crossover of 7980-7990 hurdle would open up the space for further upside till about 8150 where 20-month moving average is placed.

The benchmark crossed the 7980-7990 hurdle around middle of the day and surged all the way to 8083 before closing at 8070.

8150 continues to be the upside target to eye. 7980, the erstwhile resistance, would now act as the immediate support on the way down, with the stop loss of which trading longs should be held on to.

SBI and BHEL will report their quarterly earnings today. In case of SBI, focus will be on asset quality where slippages through AQR (Asset Quality Review) are seen at Rs 15000 cr and overall slippages are expected between Rs. 20000-25000 cr.  Accounts under 5/25 are seen at Rs 4000 cr.  Net profit is expected to fall 49% to Rs 1916 cr and NII is seen declining 5.4% to Rs 13915 cr.

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