12103 CONTINUES TO BE UPSIDE TARGET/HURDLE; 11850 CONTINUES TO BE IMMEDIATE SUPPORT

12103 CONTINUES TO BE UPSIDE TARGET/HURDLE; 11850 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Dow gained 0.7% while S & P 500 and Nasdaq rose 0.3% each, after US and China reportedly agreed to remove existing trade tariffs.

A ministry spokesperson for China’s Commerce Ministry said that both sides had agreed to simultaneously cancel some existing tariffs on one another’s goods. He added that both sides were closer to a so-called “phase one” trade agreement following constructive negotiations over the past two weeks. A U.S. official also said both sides agreed to the tariffs rollback, according to Reuters.

The 10-year Treasury yield surged to 1.95% from 1.81% in the previous session. This was the biggest upward move since the day U.S. President Donald Trump was elected.

Weekly jobless claims numbers came in at 211,000, down slightly from 218,000 in the previous week.

Brent rose 58 cents to settle at $62.32 while WTI crude climbed 80 cents to $57.15 a barrel.

European markets gained 0.1%-0.8%. EU said GDP for the 19-member area will grow by 1.1% in 2019, having forecast 1.2% growth in July.

AT HOME

Benchmark indices rose four tenth of a percent each, with Sensex hitting yet another record high while Nifty ended 76 point short of the record highest close of 12088 made on 3rd June. Sensex added 183 points to settle at 40653 while Nifty finished at 12012, up 46 points. BSE mid-cap and small-cap indices rose 0.7% and 0.5% respectively.  BSE Metal index was the top gainers among the sectoral indices, rising 1%, followed by 0.8% higher Realty and Consumer Durables indices. Oil & Gas and Capital Goods indices were the top losers, down 0.6% and 0.5% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 927 cr, 328 cr and 190 cr respectively. DIIs were net sellers to the tune of Rs 636 cr.

Rupee appreciated 2 paise to end at 70.96/$.

UPL reported 82% YoY plunge in September quarter net profit at Rs 89 cr on the back of a one-time loss of Rs 305 cr. Revenue surged 84% to Rs 7817 cr, EBITDA climbed 83% to Rs 1539 cr and margin remained unchanged at 19.7%.

Sun Pharma reported a net profit of Rs 1065 cr as against loss of Rs 270 cr YoY. Revenue rose 17% to Rs 8123 cr, EBITDA was up 17% at Rs 1790 cr while margin were unchanged at 22%.

OUTLOOK

Rating agency Moody's has cut India's credit ratings outlook to negative from stable.

Today morning, Nikkei and Shanghai are up half a percent while Hang Seng is off 0.2%. SGX Nifty is suggesting about 40 points lower start for our market.

Just to reiterate, we have been working with upside target of 12103 after Nifty achieved 11981 target.

The benchamrk yesterday touched a high of 12021 before closing at 12012, moving towards this target.

12103, the top made in June, is the next major upside target as well as resistance to eye. Once 12103 is taken out, 12325, where an upward sloping trendline adjoining tops made in September 2018 and  June 2019 is placed, would be the next upside target/resistance to eye.

11850, the bottom made on Wednesday, continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

M & M, GAIL, Eicher Motors and Nestle will report their quarterly earnings today.