10710 ABOVE 10607; 10300 CONTINUES TO BE IMMEDIATE SUPPORT

10710 ABOVE 10607; 10300 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Dow and S & P 500 rose 0.8% and 0.6% respectively as gains in Berkshire Hathaway buoyed the broader financials sector, but Nasdaq fell 0.4%.

Berkshire Hathaway's Class B shares climbed 4.7% after it disclosed over the weekend that it bought back nearly $1 billion of its own shares in August. Chevron shares jumped 3.7% to lead the energy sector higher after Credit Suisse upgraded it to outperform from neutral. Apple and Amazon however fell more than 2%, dragging Nasdaq lower.

Earlier, Chinese President Xi Jinping reiterated his rhetoric against protectionism and commitment to free trade in a speech. Xi said his country was pursuing "a new round of high-standard opening up" to broaden market access to the rest of the world.

European markets ended mixed with modest changes.

US oil fell 4 cents to $63.10 while Brent was up 34 cents at $73.17 a barrel as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers.

AT HOME

After falling about seven tenth of a percent, benchmark indices recouped more than half of the losses in last half an hour to end lower by nearly a fifth of a percent. Sensex settled at 34950, down 60 points while Nifty fell 24 points to finish at 10528. BSE mid-cap and small-cap indices lost 0.5% and 0.3% respectively. BSE Power and Oil & Gas indices tumbled 1.6% and 1.4% respectively, becoming top losers among the sectoral indices while Realty index climbed 1.6%, becoming top gainer, followed by 0.5% higher Basic Material index.

FIIs net bought stocks worth Rs 12 cr but net sold index futures and stock futures worth Rs 481 cr and 532 cr respectively. DIIs were net sellers to the tune of Rs 623 cr.

Rupee depreciated 68 paise to end at 73.12/$.

SBI reported 40% y-o-y dip in net profit at Rs 945 cr for the September quarter as against expectation of a  loss of Rs 225 cr. Gross NPA ratio improved 74 bps q-o-q to 9.95% while net NPA ratio improved 45 bps to 4.84%. Gross slippages fell to Rs 10888 cr from Rs 14349 cr.

India's October services PMI rose to a three-month high at 52.2, up from 50.9 in the previous month. Composite PMI improved to 53 from 51.6.

OUTLOOK

Today morning, Nikkei is up nearly a percent, Hang Seng is flat while Shanghai is modestly lower. SGX Nifty is suggesting about 45 points higher start for our market.

In yesterday's report we had said that "10607, the top made Friday, roughly coincides with 34-DMA as well as the upper band of bollinger on the daily chart, hence making it an important immediate hurdle, a crossover of which is required for a fresh upmove."

Nifty, after touching a low of 10477 intraday, rebounded in last half an hour to end at 10524 and is set to open above 10550 today.

10607, the top made last week, continues to be immediate hurdle above which 10710, the top made in mid-October, would be the next important resistance.

10300 continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

U.S. midterm elections scheduled for today. If the GOP maintains a majority in both chambers, it could give stocks a short-term boost as it increases the likelihood of further tax cuts. On the flip side, a Democratic sweep could pressure stocks as it could lead to a reversal of some of the policies passed by the GOP to boost the economy in the near term.