10675 IS THE NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 10520

10675 IS THE NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 10520

WORLD MARKETS

Dow and S & P 500 fell 0.2% each but Nasdaq gained 0.1% on Friday amid a mix of positive corporate earnings releases and Trump's decision to cancel a key summit with North Kora.

Oil tumbled with WTI down $2.83 or 4% to $67.40 and Brent down 3.4% to $76.13 following news that top producers could ease quotas on existing production cuts.

In economic news, orders for nondefense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 1% last month. Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, dropped 1.7% in April.

10-year US treasury yield eased further to 2.93%.

In Europe, FTSE and DAX gained 0.2% and 0.6% respectively but CAC, Italy and Spain fell 0.1%, 1.5% and 1.7% respectively. Italy's short-dated bond yields soared as uncertainty over the country's incoming anti-establishment government continued.

Delegations from the U.S. and North Korea met on Sunday at the border between North and South Korea. The White House later said it was still making preparations "should the summit take place."

AT HOME

Benchmark indices climbed about eight tenth of a percent to extend winning streak to second straight day. Sensex added 262 points to settle at 34925 while Nifty finished at 10605, up 91 points. BSE mid-cap and small-cap indices surged 1.6% and 1.2% respectively. Except 0.3% lower Consumer Durable index, all the BSE sectoral indices ended in green with Oil & Gas and Metal indices leading the tally, up 3% and 2.2% respectively.

FIIs net sold stocks worth Rs 768 cr but net bought index futures and stock futures worth Rs 538 cr and 407 cr respectively. DIIs were net buyers to the tune of Rs 888 cr.

Rupee appreciated 56 paise to end at 67.77/$.

For the week, Sensex gained 0.2% while Nifty ended flat.

Sun Pharma reported better-than-expected earnings. Net profit surged 58% to Rs 1309 cr while revenue was up 4.5% at Rs 6977 cr. EIDTA rose 20% to Rs 1683 cr and margin expanded 310 bps to 24.1%.

Tech Mahindra reported 29.6% q-o-q growth in net profit at Rs 1222 cr. Revenue rose 3.6% to Rs 8054 cr. EBIDTA was up 11.7% at Rs 1412 cr and margin rose 120 bps to 17.5%. Revenue in Dollar terms grew by 2.9% qoq to USD1,244.3 mn.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower but SGX Nifty is suggesting a marginally higher start for our market.

In Friday's report we had reiterated the view that 10575 is the immediate hurdle, a crossover of which will generate a "Buy" on the hourly chart and would pave the way for further upmove.

Nifty soared 91 points to settle at 10605, crossing this hurdle. 10675, the 50% retracement level of the recent 10930-10420 fall, is the next upside target to eye, above which, 10735, the 61.8% retracement level of this fall, would be the subsequent target.

Meanwhile, immediate support on the hourly chart is palced at 10520, with the stop-loss of which, trading longs should be held on to.

L & T, NTPC and Aurobindo Pharma will report their quarterly earnings today.

US markets will be closed today for the Memorial Day holiday.