NIFTY EXTENDS VOLATILE CONSOLIDATION; EARNINGS, ECONOMIC DATA IN FOUCUS

NIFTY EXTENDS VOLATILE CONSOLIDATION; EARNINGS, ECONOMIC DATA IN FOUCUS

WORLD MARKETS                             

US indices climbed 0.5%-0.6% yesterday to close at new record highs amid sharp gains in oil and strong quarterly results from retailers.

US oil surged 4.3% to $43.49 a barrel and Brent climbed 4.5% to reach above $46 on comments from the Saudi oil minister about possible action to stabilize prices and as the International Energy Agency forecast crude markets would tighten in the second half of 2016.

Stocks of Macy's and Kohl's soared following encouraging earnings.

US import prices, as against an expectation of a 0.3% fall, rose unexpectedly by 0.1% in July after an upwardly revised 0.6% increase in June. Weekly jobless claims fell slightly to 266000.

Dollar index gained. Gold fell $2 to $1350 an ounce.

Key European markets gained 0.7%-1.2%

AT HOME

Benchmark indices managed to end modestly higher after a choppy session to break two-day losing streak. Sensex added 85 points to settle at 27860 while Nifty finished at 8592, up 17 points. BSE mid-cap and small-cap indices however ended little changed. BSE FMCG index soared 1.4%, becoming top gainer among the sectoral indices while Realty and Metal indices were the top losers, down 0.9% and 0.7% respectively.

FIIs net bought stocks and index future worth Rs 608 cr and 6 cr respectively but net sold stock futures worth Rs 958 cr. DIIs were net sellers to the tune of Rs 621 cr.

Rupee depreciated 12 paise to end at 66.84/$.

BoB plunged after reporting weak earnings and worsening asset quality. Gross NPA as percentage of total loans rose to 11.15% from 9.99% q-o-q. Net NPA stood at 5.73%, up from 5.06%. Net profit fell 60% y-o-y to Rs 424 cr due to higher provisions and lower NII. NII fell 2.5% to Rs 3372 cr. Provisions for NPA increased to Rs 1986 cr from 568 y-o-y.

In a major rejig at Aditya Birla group, AB nuvo will be first merged into Grasim and thereafter, financial services business will be demerged from the merged entity and listed separately. The Merger ratio has been set at 3 shares of Grasim for 10 shares of AB Nuvo which at yesterday's close, is around 13% in favor of Grasim.

OUTLOOK

Today morning Asian markets are trading with gains of 0.2%-0.9% and SGX Nifty is suggesting about 10 points higher start for our market.

In yesterday's report we had mentioned that as the Nifty has turned volatile, traders would do well to keep volumes low and let the benchmark settle down before taking a fresh view. The benchmark after touching a low of 8540 rebounded to close at 8592and is set to open higher today, extending the volatility seen over last couple of days.

8518-8500 is the important support area to eye where 8518 is the immediate previous bottom on the daily chart and 8500 is where 34-DMA is placed. 8650 is the immediate hurdle on the hourly chart abvoe which 8728, the top made on Tuesday, would be the next hurdle to eye.

Traders would do well to still trade light till the trend becomes clear.

SBI, Sun Pharma, Hindalco, Bosch and Cipla will report their quarterly earnings today.

IIP for June is seen at 2% vs 1.2% in May. CPI for July is seen rsing from 5.77% in June to 6.03% in July.