NIFTY REBOUNDS FROM 7780 SUPPORT

NIFTY REBOUNDS FROM 7780 SUPPORT

WORLD MARKETS                             

S & P 500 and Nasdaq lost 1% each and Dow fell 1.2% yesterday despite gain in oil as disappointing earnings from Disney and Macy's weighed. For the Dow, it was the worst daily fall since Feb. 11.

Disney plunged 4% after reporting its first earnings miss in five years, while revenue was also below forecasts. Mecy's plunged 15% after lowering full years forecast and revenue missed estimates.

US oil rose 3.5% or$1.57 to its highest in six months at $46.23 a barrel and Brent climbed 4.6% to $47.60 after data from the U.S. Energy Information Administration showed crude inventories fell 3.4 million barrels last week, against market expectations for an increase.

Dollar index fell half a percent, breaking six-day winning streak. Gold rose $11 to $1275 an ounce.

European markets, except a marginally higher FTSE, lost 0.5%-1.3% as a mixed set of earnings and weakness in the banking sector weighed on sentiment, despite gains in various commodities.

AT HOME

After plunging about a percent and third at the open on the back of Mauritius tax treaty amendment, Sensex and Nifty recouped about half of the losses through the volatile trading session to end lower by 0.7% and 0.5% respectively. Sensex settled at 25597, down 176 points while Nifty lost 39 points to finish at 7849. BSE mid-cap index gained 0.2% while Small-cap index lost 0.03%. Except a 0.4% and 0.3% rise in Basic Material and Consumer Discretionary indices respectively, all the BSE sectoral indices ended in red with Telecom index leading the tally, down 2.3%, followed by 0.9% cut in Realty index.

FIIs net sold stocks and index futures worth Rs 362 cr and 962 cr respectively but net bought stock futures worth Rs 1072 cr. DIIs were net buyers to the tune of Rs 730 cr.

Rupee appreciated 11 paise to end at 66.56/$.

Kotak Mahindra Bank posted 9.6% rise in Jan-March quarter standalone net profit at Rs 696 cr. NII rose 5.2% to Rs 1857 cr. Gross NPA stood at 2.36% v/s 2.3% on a sequential basis. Net NPA rose to 1.06% from 0.96%.

Asian Paints reported 20% increase in consolidate net profit at Rs 409 cr for the March quarter. Sales rose 12.3% to Rs 3919 cr. Operating profit rose 26% to Rs 704 cr while margins expanded by 190 bps y-o-y to 17.72%.

Rajya Sabha yesterday passed the Insolvency and Bankruptcy Code bill. The bill seeks to create time-bound processes for insolvency resolution of companies and individuals.

OUTLOOK

Today morning, Shanghai is down a percent and half, other Asian markets are trading with cuts of upto 0.8% and SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report, when Nifty was set to open with a big down gap, we had reiterated the view that 7770 is the immediate support, with the stop loss of which trading longs should be held on to.

The benchmark, after touching a low of 7781, rebounded through choppy session to end at 7849.

7770 continues to be immediate support, a sustained trading below which will generate a sell on the hourly chart and would pave the way for further correction. 7678, the low made last week, would be the next target in that case.

IIP for March will be released today and is expected to show a growth of 2.52% vs 2% in March. April CPI is expected to inch up to 5.05% from 4.83% in March. 

Dr Reddy will report its quarterly earnings today.