8680 CONTINUES TO BE IMMEDIATE SUPPORT; RBI IN FOCUS

8680 CONTINUES TO BE IMMEDIATE SUPPORT; RBI IN FOCUS

WORLD MARKETS                             

Dow and Nasdaq gained 0.2% each while S & P 500 ended flat yesterday amid decline in crude and a slew of corporate earnings.

US crude fell 1.6% to $52.17 a barrel and Brent lost 1.2% to $55.05 after data from the American Petroleum Institute estimated U.S. crude stockpiles surged 14.2 million barrels last week.

In economic news, the U.S. trade deficit last year rose 0.4% to $502.3 billion, its highest level since 2012. Job openings and labor turnover survey showed job openings in the U.S. totaled 5.501 million at the end of December.

Philadelphia Federal Reserve president said a March rate hike should be on the table.

U.S. Treasury yields traded mixed with the benchmark 10-year note yield at 2.38% and two-year note yield around 1.14%.

European markets ended mixed with FTSE and DAX up 0.2% and 0.3% respectively while CAC, Italy and Spain lost between 0.2%-0.5%

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end lower by four tenth of a percent, breaking four-day winning streak. Sensex lost 104 points to settle at 28335 while Nifty finished at 8768, down 33 points. BSE mid-cap and small-cap indices fell 0.2% and 0.1% respectively. BSE Metal and Energy indices were the losers among the sectoral indices, giving away 1.2% and 1% respectively while Capital Goods and Power indices were the top gainers, up 1.1% and 0.4% respectively.

FIIs net bought stocks worth Rs 201 cr but net sold index futures and stock futures worth Rs 39 cr and 586 cr respectively. DIIs were net buyers to the tune of Rs 1620 cr.

Rupee depreciated 19 paise to end at 67.41/$.

PNB reported four-fold y-o-y increase in quarterly net profit at Rs 207 cr. NII fell 9.4% to Rs 3731 cr. Earnings were lower than estimates but the bank lowered its provisions & slippages and improved asset quality in the quarter gone by. Gross non-performing assets (NPA) as a percentage of gross advances increased 7 basis points sequentially to 13.7% but net NPA fell to 9.09% (from 9.1%). Provisions for bad loans fell 22% year-on-year to Rs 2,936 crore but increased 16% on sequential basis. Fresh slippages for the quarter stood at Rs 4,800 crore against Rs 5,089 crore in previous quarter and Rs 13,482 crore in corresponding quarter of last fiscal.

BHEL's earnings surpassed subdued expectations on all counts. Profit for the quarter stood at Rs 93.5 crore against loss of Rs 1,085 crore in year-ago quarter, driven by strong operational performance. Revenue during the quarter increased 18.7% to Rs 6,325 crore y-o-y. Operating profit came in at Rs 224 crore against loss of Rs 1,612 crore, with margin at 3.5%.

Tata Steel reported a consolidated profit of Rs 232 cr for the October-December quarter as against a loss of Rs 2748 cr in year-ago quarter. Revenue rose 14% to Rs 29392 cr. Operating profit shot up 322% to Rs 3539 cr and margin expanded by 880 bps too 12%. Indian revenue jumped 39% to Rs 14106 cr and its EBIT more than doubled to Rs 3392 cr.

OUTLOOK

Today morning Asian markets are trading with cuts of upto 0.6% and SGX Nifty is suggesting a marginally lower start for our market.

Key event to watch out today would be the RBI monetary policy announcement. Expectations of a 25 bps repo rate cut are high owing to a responsible budget which set a reasonable 3.2% fiscal deficit target for FY18 and a comfortable retail inflation which fell to 3.41% in December from 3.63% in November.

Yesterday was a day of consolidation as Nifty, after four consecutive up-days, lost 33 points to end at 8768.

On the way up, 8900-8970 zone, where the trendline adjoining two major tops made in March 2015 and September 2016, is placed, continues to be major target as well as the hurdle area to eye.

8680 continues to be the immediate support on the hourly chart, with the stop-loss of which existing longs can be held on to.

Hero Motocorp, Cipla and NTPC will report their quarterly earnings today.