10950 CONTINUES TO BE UPSIDE TARGET; TRAIL STOP-LOSS TO 10715

10950 CONTINUES TO BE UPSIDE TARGET; TRAIL STOP-LOSS TO 10715

WORLD MARKETS

Dow and S & P 500 fell 0.4% and 0.2% respectively while Nasdaq ended flat, weighing the possibility of a government shutdown.

Congress needs to pass a spending bill by the end of Friday to avoid a government shutdown.

The benchmark 10-year yield rose to trade at 2.62 percent, near a multi-year high

In Europe, FTSE fell 0.3% while DAX gained 0.7% and CAC ended flat.

AT HOME

After rising nearly a percent in the initial trade, Sensex and Nifty saw a sharp dip in the late noon trade to end higher by 0.5% and 0.3% respectively. Sensex settled at 35260, up 178 points while Nifty added 28 points to finish at 10817. BSE mid-cap and small-cap indices nosedived 1.7% and 2% respectively. BSE Realty index nosedived 4.1%, becoming top loser among the sectoral indices, followed by 2.9% lower Metal index. FMCG and Finance indices were top gainers, up 0.7% and 0.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1895 cr, 679 cr and 1842 cr respectively. DIIs were net sellers to the tune of Rs 657 cr.

Rupee appreciated 3 paise to end at 63.85/$.

The GST Council yesterday revised rates of 29 goods and 53 services. Rates of goods such as bio-diesel, packaged drinking water, drip, irrigation system, bio-pesticides, among others have been brought down to 12% from 18%. Diamonds and precious stones will now attract 0.25% GST instead of 3%, while vibhuti and de-oiled brown rice will attract nil tax.

While there was extensive discussion to simplify the return filing process, a final decision will be taken in the next meeting via video conferencing. The decision on inclusion of real estate in GST has been deferred.

Bharti Airtel reported 11% q-o-q fall in its consolidated net profit for the third quarter ended December at Rs 306 cr. Revenue fell 6.7% to Rs 20319 cr. 37.3. Operating profit fell 5.7% q-o-q to Rs Rs 7469, its lowest level in the last 15 quarters. Operating margin rose slightly to 36.76% from 36.38%.

Ultratech posted 25% drop in net profit at Rs 421.5 cr while revenue rose 35% to Rs 7590 cr. Operational performance fell short of estimates with EBIDTA up 13.9% at Rs 1268 cr and operating margins down 310 bps at 16.7%.

Yes Bank reported 22% y-o-y growth in net profit at Rs 1077 cr. NII grew 27% to Rs 1889 cr. Asset quality improved during the quarter as gross non-performing assets (NPA) were lower at 1.72% compared to 1.82% in previous quarter and net NPAs were also lower at 0.93% from 1.04% QoQ.

OUTLOOK

Today morning, Asian makets are trading with modest gains and SGX Nifty is suggesting about 20 points higher start for our market.

At the risk of repeating, we have been working with target of 10950 ever since 10490 hurdle was taken out on 22nd December. Yesterday, Nifty, after touching a high of 10887, fell sharply to end at 10817 and is set to open modestly higher today.

10950 continues to be upside target to eye. Immediate support on the hourly chart has moved up to 10715, with the stop-loss of which, tradding longs should be held on to.

Reliance Industries, HDFC Bank, ITC, Kotak Mahindra Bank, Wipro and HCL Tech will report their quarterly earnings today.