Wednesday, July 20, 2016



WORLD MARKETS                             

US indices ended mixed with Dow rising 0.1% while S & P 500 and Nasdaq fell 0.1% and 0.4% respectively

Netfilix tumbled 14% after beat on earnings Monday but subscriber numbers that missed guidance. Bank earnings continued to surprise with Goldman Sachs posting better-than-expected results yesterday.

U.S. housing starts rose more than expected in June, at a pace of 1.19 million units.

In its World Economic Outlook published yesterday, the IMF lowered its 2016 global growth forecast by 10 bps to 3.1%. 2017 forecast was also cut by 10 bps to 3.4%.

European markets, except a flat FTSE, fell between 0.5%-0.8%. The Zew Institute's German economic index, owing to Brexit uncertainty, fell to -6.8 in July, the lowest level since November 2012, from 19.2 in the previous month. U.K. inflation rose 0.5% y-o-y in June.

WTI oil fell 59 cents or 1.3%to $44.65 per barrel. Brent settled at $46.66.

Dollar index rose to hit its highest level since March 10.


After trading in a narrow range in first half, benchmark indices tuned volatile later, first falling about three fourth of a percent from the top of the day and then recouping all the losses to finally end higher by about a fifth of a percent. Sensex settled at 27788, up 41 points while Nifty added 20 points to finish at 8529. BSE mid-cap index gained 0.2% but the small-cap index fell 0.1%. BSE Oil & Gas and Energy indices gained 1.9% and 1.4% respectively, becoming top gainers among the sectoral indices while FMCG and Consumer Durable indices were the top losers, down 0.6% and 0.3% respectively.

FIIs net bought stocks and index futures worth Rs 549 cr and 553 cr respectively but net sold stock futures worth Rs 236 cr. DIIs were net sellers to the tune of Rs 377 cr.

Rupee appreciated 10 paise to end at 67.10/$.

Ultratech's profit and operational numbers beat expectations but revenue was a miss. Net profit climbed 26% to Rs 758 cr while revenue rose 3.8% to Rs 6232 cr. Sales volume was up 6.4% to 13.20 mn tonne. Operating profit grew by 23.4% to Rs 1422 cr and margin expanded by 362 bps to 22.82%.

Wipro's IT services revenue matched estimates but margin and Q2 guidance disappointed. Dollar revenue rose 2.6% q-o-q at USD 1931 mn. In rupee terms revenue rose 2.4% to Rs 13109 cr and profit fell 8.3% to Rs 2052 cr. Operating profit slipped 5.5% and margin contracted by 109 bps. The company guided for revenue of USD 1931-1950 mn for Q2, implying a growth of just 0.01-1% over Q1.

In line with its Budget announcement, the government yesterday announced infusion of Rs 22915 cr into 13 public sector banks to help them cope with their non-performing loans and shore up their capital levels.


Today morning Nikkei is down about 0.7% but other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had reiterated the view that 8475 continues to be immediate support. The benchmark, after touching a low of 8477, rebounded to close at 8529, holding on to this support.

8475 continues to be immediate support on the hourly chart, a breach of which will generate a sell on the hourly chart and next support to eye in that case would be 8400, which is the 61.8% retracement level of the last 8284-8595 upmove.

On the way up, 8595, the top made last week, continues to be immediate hurdle a decisive crossover of which will open up the space for further upmove till about 8845, the top made in April lat year.

Traders are advised to wait for the breach of 8475-8595 range for taking a fresh view on Nifty.

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