NIFTY RETREATS FROM 11078 HURDLE; 10890 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY RETREATS FROM 11078 HURDLE; 10890 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Nasdaq ended flat while Dow and S & P 500 gained 0.3% and 0.2% respectively, with the Dow extending the winning streak to fifth straight day, helped by strong quarterly results from Morgan Stanley and rail transport company CSX.

Morgan Stanley reported better-than-expected earnings and revenue, boosted by strong trading and investment banking revenue. CSX also posted stronger-than-forecast profits and sales.

Federal Reserve Chairman Jerome Powell mostly reinforced his upbeat view on the U.S. economy in his second testimony to congress in the week.

Trump said the U.S. could "do a deal separately" with Mexico and Canada, raising questions over the fate of the North American Free Trade Agreement (NAFTA).

U.S. housing starts fell 12% in June to a nine-month low. Mortgage applications also fell 2.5% last week.

US crude rose 1% to $68.76. Brent gained nearly 1% to $72.84.

In Europe, except a marginally lower Italy, other markets gained 0.4%-0.8%.

AT HOME

After gaining more than half a percent in the initial trade, Sensex and Nifty fell sharply in the noon trade to end with cuts of 0.4% and 0.2% respectively. Sensex settled at 36373, down 146 points while Nifty lost 27 points to finish at 10980. BSE mid-cap and small-cap indices tumbled 1.3% and 1% respectively. Except 1.1% and and 0.4% higher Oil & Gas and Energy indices respectively, all the BSE sectoral indices ended in red with Metal index leading the tally, down 3.1%, followed by 2.4% lower Realty index.

FIIs net bought stocks and index futures worth Rs 96 cr and 358 cr respectively but net sold stock futures worth Rs 602 cr. DIIs were net buyers to the tune of Rs 111 cr.

Rupee depreciated 17 paise to end at 68.62/$.

Ultratech reported in-line with estimated revenue and profit number while operating performance was mildly above estimates. Net profit fell 33% y-o-y to Rs 598 cr while revenue rose 30.6% to Rs 8655 cr. EBIDTA rose 4% to Rs 1627 cr and margin contracted 474 bps to 18.8%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.1%-0.4% and SGX Nifty is suggesting about 30 points higher start for our market.

In yesterday's report we had said that 11078, the top made last week, is the immediate hurdle, above which 11171, the top made in January, would be the next target to eye.

Nifty, after touching a high of 11076 in the initial trade, slipped to end at 10980, and is set to open above 11000 today.

11078 continues to be immediate hurdle, upon crossover of which, 11171 would be the next target as mentioned above.

Meanwhile, 10890 continues to be immediate support, with the stop-loss of which, trading longs should be held on to.

Kotak Mahindra Bank and Bajaj Finance will report their quarterly earnings today.