NIFTY HITS RECORD HIGH; STAY LONG WITH THE STOP LOSS OF 8050

NIFTY HITS RECORD HIGH; STAY LONG WITH THE STOP LOSS OF 8050

WORLD MARKETS                             

US indices gained between 0.4%-1.3% yesterday after data showed the U.S. economy grew more than expected last quarter.

US third-quarter GDP rose 3.5%, beating expectations. Another report had the number of Americans filing for jobless benefits rising last week, but the four-week average fell, illustrating ongoing improvement in the labor market.

European markets gained between 0.2%-0.7%. The banking sector underperformed, with shares in Greek and Italian banks still struggling following the results of the European Central Bank's stress tests.

Germany's unemployment rate held steady at 6.7% in October, and joblessness fell more than expected. However, inflation data for the country came in slightly lower than forecast.

Dollar index, after rising to 86.49, settled at 86.15. Gold plunged 2.2% to $1199 an ounce; Nymex crude fell 1.3% to $81.1 a barrel.

AT HOME

After a flattish start, benchmark indices saw a sustained upward move through the session to end higher by nearly a percent, hitting record highs and extending the winning streak to third straight day. Sensex surged 248 points to settle at 27346, marking a fresh closing high. Nifty gained 79 points to close at 8169, just 4 points short of highest closing registered on 8th September. All the BSE sectoral indices ended higher with Realty and IT indices leading the tally, putting on 3.4% and 2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1257 cr, 1286 cr and 531 cr respectively. DIIs were net sellers to the tune of Rs 94 cr.

Rupee depreciated 10 paise to close at 61.45/$.

Maruti reported better-than-estimated 28.8% growth in September quarter net profit at Rs 863 cr. Revenues rose 17.5% to Rs 12304 cr. Operating profit jumped 15% to Rs 1521 cr but margin declined 20 bps to 12.4% which were slightly lower than estimates.

ICICI Bank met street expectations on profit and net interest income front but its asset quality and provisions hit in the quarter ended September 2014. Net profit rose 15.2% y-o-y to Rs 2709. NII too grew 15.2% to Rs 4657 cr. Gross NPA rose 7 bps sequentially to 3.12% and Net NPAs climbed 9 bps to 0.96%.

Bharti Airtel reported better-than-expected 24.8% q-o-q rise in September quarter net profit at Rs 1382 cr. Revenue declined 0.5% to Rs 22845 cr, which was in-line with estimates. Operating profit declined 0.3% to Rs 7705 cr but margin expanded to 33.7% from 33.62%.

OUTLOOK

Today morning Asian markets are trading with gains ranging from 0.5%-1.5% and SGX Nifty is suggesting about 50 points higher opening for our market.

We have been bullish on Nifty ever since it crossed 7928 on 21st October, which broke the lower-top lower-bottom formation on the daily chart. Nifty has seen strong upmove since then and yesterday touched a fresh all-time high of 8181, achieving the upside targets given by us and vindicating our view.

The momentum continues to be positive and more importantly Nifty has given a fresh breakout on the daily chart after a consolidation of nearly a month and half, which suggests much higher levels in the days to come.

"Stay long with a trailing stop loss" continues to be the advice. 8260-8300 is the next target area on the way up. Immediate support on the hourly chart has moved up to 8050, with the stop loss of which trading longs should be held on to.

ITC, M & M and NMDC will report their quarterly earnings today.

FED ENDS QE AS EXPECTED; TRAIL STOP LOSS TO 8000

FED ENDS QE AS EXPECTED; TRAIL STOP LOSS TO 8000

WORLD MARKETS

US indices ended modestly lower as markets mulled the ramifications of the monetary-policy decision from the Fed.

The U.S. central bank ended its historic monthly bond purchase program, as widely expected. However, it kept its language on keeping interest rates low for a "considerable time" but dropped its "significant" wording in regards to slack in the U.S. labor market, which some analysts take as a sign that the bank is focusing on an interest rate rise.

Key European markets ended flat to modestly higher while Italy and Spain tumbled a percent and half as fears about the region's banking sector following the results of Europe-wide stress tests weighed on these countries.

Dollar index climbed to 86 from 85.39 on the previous day. Nymex crude rose 1% to $82.2 a barrel; Gold fell $4.5 to $1226 an ounce.

                                                             

AT HOME

Benchmark indices added some more gains to the gap up opening in last hour of trade and finally ended higher by eight tenth of a percent. Sensex gained 217 points to settle at 27098 while Nifty finished at 8090, up 63 points. BSE mid-cap and small-cap indices gained 0.5% and 0.6% respectively. Except a 0.3% and 0.2% cut in BSE Healthcare index and Bankex, all other sectoral indices ended in green with Realty and Metal indices leading the tally, climbed 3% and 2.6% respectively.

FIIs net bought stocks and index futures worth Rs 786 cr and 2167 cr respectively but net sold stock futures worth Rs 61 cr. DIIs were net sellers to the tune of Rs 507 cr.

Rupee depreciated 3 paise to close at 61.35/$.

Sesa Sterlite reported slightly better-than-estimated bottom line and operational performance while topline was in line. September quarter net profit fell 31.7% y-o-y to Rs 1658 cr. Total income slipped 22.7% to Rs 19448 cr. Operating profit fell 1.2% to Rs 6381 cr.

Dr Reddy reported slightly above estimated profit but topline and operational performance missed street expectations. Consolidated net profit fell 16.8% to Rs 574 cr. Net sales rose 6.9% to Rs 3588 cr. Operating profit fell 12.2% to Rs 646.5 cr and margin dropped 400 bps to 18%.

Tech Mahindra reported better than estimated 5.2% sequential growth in dollar revenue at USD 900 mn for the quarter ended September. Rupee revenue grew 7.2% to Rs 5448 cr. Net profit grew 14.1% to Rs 720 cr on strong operational performance but was impacted by forex loss. Operating margins expanded by 220 bps to 17.4% but were lower than the estimated 18.3%.

In a boost to cash-starved real estate industry, government yesterday relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement and easing the exit norms.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Ever since Nifty broke the lower-top lower-bottom formation by crossing 7928 top last week, we have been working with targets of 8030 and 8130. The benchmark yesterday rose to 8098 before closing at 8090, coming in close to the second target mentioned above and vindicating our view.

The trendline adjoining major tops on the daily chart is now placed around 8115 and would be the immediate target on the way up.

Immediate support on the hourly chart has moved up to 8000, with the stop loss of which trading longs should be held on to.

ICICI Bank, Maruti, Bharti Airtel, ACC and Abuja Cement will report their quarterly earnings today.

NIFTY ON TRACK TO ACHIEVE 8130 TARGET; FED IN FOCUS

NIFTY ON TRACK TO ACHIEVE 8130 TARGET; FED IN FOCUS

WORLD MARKETS                             

US indices surged between 1.2%-1.7%, with the Dow extending the winning streak to fourth day on strong consumer sentiment data and corporate earnings.

October consumer confidence came in at 94.5, beating the 87 estimate and hitting its highest level since 2007. Durable goods orders however unexpectedly declined 1.3% in September. A third report had U.S. single-family home prices rising in August on a year-over-year basis but still falling short of expectations.

European markets gained between 0.6%-2.4%

Nymex crude gained 0.5% to $81.4 a barrel; Gold was flat at $1229 an ounce.

AT HOME

After Monday's consolidation, benchmark indices resumed their upward journey by gaining nearly half a percent yesterday and closed at the highest level since 22nd September. Sensex gained 128 points to settle at 26881 while Nifty finished at 8028, up 36 points. BSE mid-cap and small-cap indices gained 0.1% and 0.8% respectively. BSE Healthcare and Power indices gained the most among the sectoral indices, rising 1.4% and 1% respectively.

Lupin reported better-than-estimated 55% rise in consolidated quarterly net profit at Rs 630 cr but missed estimates on topline and operational front. Consolidated revenue grew 18.9% to Rs 3173 cr. Operating margin expanded by 150 bps to 26.2%, lower than the 27.4% estimate.

FIIs net sold stocks and stock futures worth Rs 108 cr and 600 cr respectively but net bought index futures worth Rs 592 cr. DIIs were net sellers to the tune of Rs 100 cr.

Rupee depreciated 2 paise to close at 61.32/$.

OUTLOOK

Today morning Nikkei is up a percent and half as Japan's industrial output has risen at its fastest pace since January, coming in well above expectations. Other Asian markets are trading with gains ranging from 0.5%-1% and SGX Nifty is suggesting about 40 points higher opening for our market.

Ever since Nifty crossed 7928 hurdle last Tuesday, we have been working with targets of 8030 and 8130. The benchmark has already achieved the first one and is on track to achieve the second. Immediate support on the hourly chart has moved up to 7960, with the stop loss of which trading longs should be held on to.

Dr Reddy, Sesa Sterlite and Tech Mahindra will report their quarterly earnings today.

The Federal Open Market Committee concludes a two-day meeting today, where it is widely expected to announce the end of its massive bond-buying stimulus. Markets would closely watch out for any timeline for the interest rate hike which is currently expected to happen in July 2015.

BROADER MARKETS GAINS WHILE NIFTY CONSOLIDATES

BROADER MARKETS GAINS WHILE NIFTY CONSOLIDATES

WORLD MARKETS

US indices ended little changed yesterday after rebounding from initial lower levels, digesting big gains made last week.

Nymex crude dipped to a more-than two-year low below $80 a barrel before recovering to $81, and reminded of global growth concerns.

Existing home sales remained almost flat in September.

European markets ended with cuts ranging from 0.4%-2.4% after closely watched German business sentiment index declined in October for a sixth consecutive month and hit a near two-year low, increasing worries about Europe's biggest economy.

Italy fell the most as nine out of the 25 euro zone banks that failed the ECB stress test were Italian.

                                                             

AT HOME

After a gap up opening, benchmark indices saw a gradual downward move through the session to end with cuts of about a third of a percent, breaking five day winning streak. Sensex lost 98 points to settle at 26753 while Nifty finished at 7992, down 23 points. BSE mid-cap and small-cap indices however gained 0.2% each. BSE Realty index plunged 3.8%, becoming top loser among the sectoral indices, followed by 1.4% cut in Oil & Gas index. Consumer Durable index climbed 2.1%, becoming top gainer, followed by 0.5% rise in Bankex.

FIIs net bought stocks and index futures worth Rs 49 cr and 680 cr respectively but net sold stock futures worth Rs 210 cr. DIIs were net buyers to the tune of Rs 10 cr.

Rupee depreciated 2 paise to close at 61.30/$.

HUL reported in-line-with estimated 8.1% y-o-y growth in September quarter net profit at Rs 988 cr supported by exceptional gain of Rs 33 cr and higher revenue growth. Adjusted net profit rose 6.5% to Rs 939 cr. Total income grew 10.8% to Rs 7639 cr. Volume growth stood at 5%, down from 6% same quarter last year. Operating margin declined 30 bps to 16.3%.

The World Bank yesterday said that India's growth story is on track with its economy set to grow by 6.4% in FY16 and at 7% in FY17 versus 5.6% in FY15. The agency also forecasts FY15 inflation (WPI) at 4.3% and current account deficit at 2%.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher opening for our market.

After five days of upmove, yesterday was a day of consolidation as Nifty ended lower by three tenth of a percent after a gap up opening.

We have been mentioning that for turning the near term view decisively bullish, Nifty needs to regain higher-top higher-bottom formation on the daily chart. The benchmark has already confirmed a higher-top when 7928 was crossed last Tuesday. Now a higher-bottom needs to be formed for which benchmark should not retrace more than 61.8% of the 7723-8064 upmove seen over past couple of days.

7934, the 38.2% retracement level of this upmove, would be the first support, with the stop loss of which trading longs can be held on to.

We were working with 8030 as the first target above 7928, which has been achieved. 8130 continues to be next target.

US Fed starts its two day policy meeting today and is widely expected to declare the end of its quantitative easing program when it releases its statement Wednesday.

NIFTY ACHIEVES 8030 TARGET; 8130 NEXT

NIFTY ACHIEVES 8030 TARGET; 8130 NEXT

WORLD MARKETS

US indices gained about three fourth of a percent on Friday and also finished the week with best weekly gains of the year along with halting a four-week losing streak on better-than-expected earnings from Microsoft and P & G.

New-home sales rose 0.2% to a six-year high in September, while the pace of August sales was revised sharply lower.

Markets shrugged of the concern about the Ebola, with a New York City doctor testing positive for the virus, making him the fourth person to be diagnosed with Ebola in the United States and the first in the nation's biggest city.

Nymex crude fell 1.3% to $81 a barrel; gold rose $3 to $1232 an ounce.

Earlier Thursday, U.S. stocks surged after heavy-equipment maker Caterpillar boosted its profit outlook and an unexpected increase in euro-zone manufacturing eased worries about the global economy. For the week, Dow gained 2.6%, S & P 500 soared 4.1% and Nasdaq climbed 5.3%.

Key European markets ended with cuts of about six tenth of a percent on Friday on concerns over the results of Europe's bank stress tests and the first Ebola case in New York.

Media reports suggested that more euro zone banks than previously thought would fail the region-wide stress tests. Actual results on Sunday showed that 25 banks failed the test. However, 12 of those lenders have already raised 15 billion euros this year to repair their finances.

Data on Friday showed that China's new home prices fell 1.3% year on year in September, the first annual drop in nearly two years.

                                                             

AT HOME

Benchmark indices gained a fourth of a percent on the Muhurat Trading on Thursday, extending the winning streak to fifth straight day.

On Wednesday, after a gap up opening, benchmark indices traded in a narrow range through the session and finally ended higher by eight tenth of a percent. Sensex surged 211 points to settle at 26787 while Nifty finished at 7996, up 68 points. BSE mid-cap and small-cap indices gained 1.2% each. All the BSE sectoral indices ended higher with Auto and Capital Goods indices leading the tally, putting on 3% and 2.1% respectively.

FIIs net bought stocks and index futures worth Rs 8 cr and 751 cr respectively but net sold stock futures worth Rs 109 cr. DIIs were net buyers to the tune of Rs 376 cr.

Rupee appreciated 3 paise to close at 61.28/$.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 25 points higher opening for our market.

In Wednesday's report we had mentioned that by crossing the 7928 hurdle, Nifty had broken the lower-top lower-bottom formation and that 8030, the top made on 30th September was the immediate target above which 8130 would be the next hurdle.

Nifty surged to 7996 on Wednesday and extended the upmove on the Muhurat trading day by touching a high of 8032 before closing at 8014, achieving the target mentioned above and vindicating our view.

8130, where the trendline adjoining recent tops on the daily chart is placed, continues to be the next target to eye. Immediate support on the hourly chart is placed at 7880, with the sop loss of which trading longs should be held on to.

HUL will report its quarterly earnings today.

SAMVAT REPORT - "FIRST MILESTONE ACHIEVED, 10460 NEXT"

http://www.prudentbroking.com/samvat2071.htm

NIFTY BREAKS LOWER-TOP LOWER-BOTTOM FORMATION

NIFTY BREAKS LOWER-TOP LOWER-BOTTOM FORMATION

WORLD MARKETS                             

US indices surged between 1.3%-2.4% yesterday, with S & P 500 and Nasdaq registering their largest daily gain for 2014 and extending the rising streak to fourth day.

Boosting the sentiment was data that showed existing home sales in September hit a one-year high and positive earnings from corporate including Apple, Texas Instruments and United Technologies.

Media reports that the ECB could begin buying corporate bonds in the secondary debt markets from as soon as this December, also lifted the sentiment.

Earlier data showed China's GDP grew 7.3% y-o-y in the July-September period, the slowest pace in nearly six years. Still, the figure was above forecasts for a 7.2% rise. September industrial output rose 8% y-o-y, beating estimates, but retail sales and fixed-asset investment both missed expectations.

European markets climbed between 1.7%-2.8% reacting to corporate earnings and ECB stimulus reports.

Nymex crude rose 58 cents to $82.5 a barrel; gold gained $7 to $1252 an ounce.

AT HOME

Benchmark indices ended higher by six tenth of a percent after a choppy trading session, extending the winning streak to third straight session. Sensex gained 146 points to settle at 26576 while Nifty finished at 7928, up 48 points. BSE mid-cap index gained 0.9% while the small-cap index was up 0.2%. Except a 0.8% and 0.1% cut in BSE Oil & Gas and Healthcare indices respectively, all other sectoral indices ended in green, with Realty and Power indices leading the tally, putting on 2.6% each.

FIIs net bought stocks and index futures worth Rs 32 cr and 399 cr respectively but net sold stock futures worth Rs 153 cr. DIIs were net buyers to the tune of Rs 69 cr.

Rupee appreciated 5 paise to close at 61.31/$.

PNB plunged after quarterly earnings missed expectations on all parameters. Net profit rose 13.8% to Rs 575 cr as against expectation of Rs 1224 cr as provisions remained at an elevated level at Rs 1768 cr. NII grew 3.4% y-o-y to Rs 4151 cr. Asset quality worsened with Gross NPAs rising 17 bps sequentially to 5.65% and net NPAs rising by 24 bps to 3.26%.  

HDFC Bank met street expectations with the net profit rising 20.1% to Rs 2380 cr . NII grew by 23.1% to Rs 5511 cr. Net interest margin expanded 10 bps sequentially to 4.5%. Gross NPAs improved to 1.02% from 1.07% q-o-q while net NPAs remained unchanged at 0.3%.

OUTLOOK

Today morning, Asian markets are trading with gains ranging from 0.5%-1.5% and SGX Nifty is suggesting about 70 points higher opening for our market.

As we have been mentioning, Nifty was forming lower-tops and lower-bottoms on the daily chart and negation of this formation was required to turn the near term view positive. In that sense, 7928, the immediate previous top on the daily chart was the key resistance we were watching.

Yesterday, Nifty touched a high of 7936 and closed at 7928, crossing this hurdle on intraday basis.

8030, the top made on 30th September, is the next target to eye on the way up, above which 8130 would be the next hurdle.

Immediate support on the hourly chart is placed at 7850, with the stop loss of which trading longs should be held on to.

Wipro, Kotak Mahindra Bank, HDFC and Asian Paints will report their quarterly earnings today.

7928-7820 IS THE IMMEDIATE RANGE

7928-7820 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

While Dow gained 0.1%, S & P 500 and Nasdaq climbed 0.9% and 1.4% yesterday as shares of Apple inc surged ahead of its earnings.

IBM slid 7.1% after the technology giant and Dow component posted third-quarter earnings short of estimates.

European markets lost between 0.4%-1.5%, reacting to disappointing corporate earnings. SAP and Philips were prominent losers. German producer prices for September were flat compared to the month before, but showed a yearly drop of 1%. Italy's industrial orders showed a gain of 1.5% on the month.

Nymex crude lost 4 cents to $82.7 a barrel; gold rose 0.5% to $1245 an ounce.

AT HOME

After a big gap up opening, benchmark indices traded in a narrow range through the session and finally ended higher by a percent and quarter. Sensex surged 321 points to settle at 26430 while Nifty finished at 7879, up 100 points. BSE mid-cap and small-cap indices gained 1.1% and 0.5% respectively. Except a 0.8% and 0.3% cut in BSE IT and Teck indices respectively, all the sectoral indices ended in green with Auto and Capital Goods indices leading the tally, putting on 2.1% each.

FIIs net bought stocks, index futures and stock futures worth Rs 1040 cr, 1455 cr and 628 cr respectively. DIIs were net sellers to the tune of Rs 166 cr.

Rupee appreciated 8 paise to end at 61.36/$.

ONGC surged after government raised natural gas prices to $5.6 per unit from $4.2 which will significantly boost the earnings of ONGC and deregulated diesel.

Jindal Steel plunged after CBI registered a case of cheating and corruption against the company.

Government yesterday approved the promulgation of ordinance on deallocated Coal Blocks. The government will put in place a transparent e-auction process for allocation of coal mines to both public and private sector.

OUTLOOK

China's Q3 GDP growth has come in at 7.3%, slightly above the market estimate of 7.2%. September industrial output is up 8%, beating the estimate of 7.5%. September retail sales are up 11.6% slightly below the estimated 11.8%.

Asian markets are trading mixed with changes of upto half a percent. SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had reiterated the view that a resumption of the higher-top higher-bottom formation on the daily chart is necessary for turning the near term view decisively bullish and that 7928, the immediate previous top on the daily chart is the important resistance to eye.

7928 continues to be important resistance on the way up. 7856-7820, the gap created by the gap up opening would be the immediate support on the way down.

PNB, HDFC Bank and Cairn will report their quarterly earnings today.

REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

WORLD MARKETS

US indices surged between 1%-1.6% on Friday as investors bet on further stimulus from central banks and corporations including General Electric and Morgan Stanley reported profits that topped expectations.

New-home construction climbed 6.3% in August, signalling improvement in the U.S. residential real-estate market. The preliminary read for consumer sentiment in October came in at 86.4 versus a 84.0 estimate.

In prepared remarks, Fed Chair Janet Yellen voiced concern about income inequality in the United States, saying by some accounts, it is near its highest level in the past 100 years. On Thursday, St. Louis Fed President James Bullard had said that the central bank should think about postponing the end of its bond purchases.

European markets climbed between 2%-3.5%. The Bank of England's Chief Economist, Andrew Haldane, said the central bank may need to keep interest rates lower for longer to reduce the chances of an economic stagnation.

Nymex crude rose 0.1% to $82.8 a barrel, down 3.6% week on week; gold fell 0.2% to $1239 an ounce, posting weekly gain of 1.4%.

For the week, Dow and S & P 500 lost 1% each and Nasdaq was down 0.4%. European markets, except a 0.7% higher DAX, lost between 0.5%-2.6% for the week.

                                                             

AT HOME

Benchmark indices managed to end higher by four tenth of a percent after a choppy trading session. Sensex gained 109 points to settle at 26108 while Nifty finished at 7780, up 31 points. BSE mid-cap index gained 0.3% while the small-cap index lost 0.3%. Except a 4% and 2.7% fall in BSE IT and Teck indices, all other sectoral indices ended higher with Bankex and Capital Goods indices leading the tally, putting on 2.5% and 1.9% respectively. 

FIIs net sold stocks and stock futures worth Rs 1430 cr and 159 cr respectively but net bought index futures worth Rs 1030 cr. DIIs were net buyers to the tune of Rs 737 cr.

Rupee appreciated 39 paise to close at 61.44/$.

Axis Bank reported better-than-expected 20% rise in NII at Rs 3525 cr for the quarter ended September. Net profit rose 18.3% to 1611 cr which was in-line with estimates. Gross and Net NPAs remained unchanged from previous quarter at 1.34% and 0.44%.

For the week, Sensex and Nifty lost 0.7% and 1% respectively, extending the losing streak to fourth straight week.

OUTLOOK

Today morning Nikkei is up more than 3% and other Asian markets are up between 0.5%-1.5%.

BJP came out with flying colors in the assembly election held recently. In Haryana, the party got a majority on its own for the first time, winning 47 of the 90 seats, up from a meagre four in the last elections. In Maharashtra, BJP won 122 of 288 seats, increasing the tally from just 46 seats and emerging as the single largest party.

Taking a major decision on Saturday, government deregulated diesel price. As a result, diesel price fell by Rs 3.37 a litre from Sunday and will move in tandem with international cost henceforth. In another long pending issue, government hiked natural gas tariff to $5.61 per mmbtu from the current $4.2 per mmbtu. The price will be revised every six months.

Reacting to these developments, SGX Nifty is suggesting a whooping 125 higher opening for our market.

This gap up opening would bring Nifty very close to the important 7928 resistance, which is the immediate previous top on the daily chart, a crossover of which is required to break the lower-top lower-bottom formation. 8000 followed by 8160 would be next targets to eye in that case.

EQUITIES, OIL REBOUND FROM LOWER LEVEL; NIFTY CLOSES AT 2-MONTH LOW

EQUITIES, OIL REBOUND FROM LOWER LEVEL; NIFTY CLOSES AT 2-MONTH LOW

WORLD MARKETS

US indices, after opening down by 1%-1.5%, recovered through the session with Dow closing just 0.2% lower while Nasdaq and S & P 500 ended marginally in the green as worries about global growth were offset by mostly better-than-expected U.S. earnings and economic reports.

Claims for jobless benefits dropped to a 14-year low last week, falling by 23,000 to 264,000. Industrial production rose 1% in September, versus expectations of 0.4%. On the flip side, confidence among home builders fell in October after rising to a nine-year high the prior month.

St. Louis Fed President James Bullard said that the Federal Reserve should consider postponing the end of its bond purchase program to stop the drop in inflation expectations.

European markets too recovered quite a bit from intraday lows to end with cuts ranging from 0.2%-1.7%. DAX managed to break into green, up 0.1%. The European Commission moved to ease concerns over Greece by saying it would continue to assist Greece in whatever way was necessary and would ensure a smooth evolution of support for the country after its bailout program finishes.

Nymex crude, after dropping to as low as $79.8 a barrel, rebounded sharply to $82.7, up 1.1% from previous close. Gold fell 0.3% to $1241 an ounce.

AT HOME

After a rangebound trading in the morning trade, benchmark indices saw a sharp fall in the noon tracking weakness in European markets and ended with deep cuts of nearly a percent and half to close at their lowest level in 2 months. Sensex nosedived 350 points to settle at 25999 while Nifty finished at 7748, down 116 points. BSE mid-cap and small-cap indices lost 2.4% and 2.7% respectively. All the BSE sectoral indices ended in red with Consumer Durable and Power indices leading the tally, giving away 4.2% and 2.9% respectively.

FIIs net sold stocks and index futures worth Rs 1128 cr and 725 cr respectively but net bought stock futures worth Rs 363 cr. DIIs were net buyers to the tune of Rs 664 cr.

Rupee plunged 42 paise to close at 61.85/$, a seven-month low.

TCS missed street estimates by small margin. 6.4% q-o-q Dollar revenues rose 6.4% q-o-q to $3929 mn. In rupee terms consolidated revenues rose 7.7% to Rs 23816 cr while net profit was up 4.55% at Rs 5288 cr. EBIDTA margin stood at 26.85%, up 55 bps q-o-q.

Hero Motocorp reported better than expected 58.5% rise in September quarter net profit at Rs 763 cr. Revenues at Rs 6915 cr grew 20.8%, which was slightly below estimate. EBIDTA margin declined by 100 bps to 13.5%, slightly below 13.6% estimate.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes. SGX Nifty is suggesting about 30 points higher opening for our market.

Just to remind our viewers, we have been bearish on Nifty ever since it closed below 7925 on 25th September, confirming a lower-top lower-bottom formation on the daily chart. Since then we have been maintaining that unless we see a resumption of the higher-top higher-bottom formation, the near term view will not turn bullish.

Immediate previous top on the daily chart now stands at 7928, which needs to be crossed for fulfilling above condition.

On the way down, having broken below the 7785 support, the benchmark has open up the possibility of the retest of the 7540 bottom, from where the rally till 8180 had begun. Before that 7650 would be the immediate support to eye.

HCL Tech and Axis Bank will report their quarterly earnings today.

EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

WORLD MARKETS

US indices, after plunging nearly 3% intraday amid worries over global growth and the spread of Ebola, recovered quite a bit in the late noon trade to end with cuts ranging from 0.3%-1.1%.

Reports of diagnosis of another Ebola case in the US weighed on the sentiment. Also, U.S. retail sales fell 0.3% in September, slightly more than the expected 0.2% decline. Business inventories rose less than expected in August. The producer price index for September fell 0.1% as opposed to expectations of a 0.1% gain.

Fed released its "Beige Book" that said the economy is growing at a "modest to moderate" pace.

Bank of America posted a smaller-than-expected loss, while BlackRock reported better-than-expected earnings.

The U.S. 10-year Treasury note yield dipped below 2 percent for the first time since May 2013. Nymex crude settled down 6 cents to $81.8 a barrel; Gold rose $10.5 to $1242 an ounce.

European markets nosedived between 2%-4%. Greece plunged 6% on political uncertainty. Greek Prime Minister won a confidence vote last week, which called for lawmakers to back plans to exit an international bailout program early.

Greek bond yields crossed 7% threshold while 10-year German yields fell to another record on safe haven buying.

                                                             

AT HOME

On Tuesday, benchmark indices ended with modest cuts after a choppy trading session. Sensex lost 35 points to settle at 26349 while Nifty finished at 7864, down 20 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Realty index nosedived 9.2%, becoming top loser among the sectoral indices, followed by 0.8% cut in IT index. Power index and Bankex gained 0.5% each.

FIIs net sold stocks and index futures worth Rs 695 cr and 303 cr respectively but net bought stock futures worth Rs 93 cr. DIIs were net buyers to the tune of Rs 496 cr.

Rupee fell 31 paise to close at 61.41/$.

DLF plunged after SEBI barred the company from accessing the capital market for three years for non-disclosure of its 2007 IPO documents.

WPI inflation for September cooled off to a 5-year low at 2.38% vs 3.74% in August on lower food and fuel price.

India's trade deficit in September widened to a 16-month high of $14.25 bn as imports surged 26% y-o-y to $43.2 bn while exports grew a tepid 2.7% to $28.9 bn.

OUTLOOK

Today morning, Nikkei is down more than 2% on strengthening yen. Other Asian markets are trading with average cuts of a percent. SGX Nifty is trading at 7880, which is 15 point lower than Tuesday's closing of Nifty future.

In the assembly election held yesterday, Haryana recorded all-time high 73% turnout while Maharashtra saw 64% turnout. Most of the exit polls predicted that BJP will form government in both the states.

While Nifty has been repeatedly bouncing back from the crucial 7785 support, we have been indicating that the resumption of higher-top higher-bottom formation is required to turn the near term view bullish. Therefore, in Tuesday's report we had termed 7785-7972 a no-trading zone where 7972 is the immediate previous top on the daily chart.

That continues to be the view. Traders are advised to wait for the crossover of 7785-7972 range on either side for taking a fresh view on Nifty. A breach of 7785 can take Nifty all the way to 7540 while a crossover of 7972 can take it in the vicinity of 8180.

TCS and Hero Moto Corp will report their quarterly earnings today.

CPI COOLS TO ALL-TIME LOW; NIFTY REBOUNDS FROM THE VICINITY OF 7785 SUPPORT

CPI COOLS TO ALL-TIME LOW; NIFTY REBOUNDS FROM THE VICINITY OF 7785 SUPPORT

WORLD MARKETS

US indices plunged about a percent and half yesterday, extending the fall to third straight session as concerns over slowing global economy persisted. S & P 500 closed below its 200 DMA for the first time after 19th November 2012.

European markets, except a modestly lower Italy, ended with modest gains. Basic resource sector gained 2.8% following strong Chinese data which showed exports surged 15.3% y-o-y in September.

Nymex crude fell 8 cents to $85.7 a barrel; Gold rose $8.3 to $1230 an ounce.

                                                             

AT HOME

After a gap down opening, benchmark indices saw a sustained upward move through the session to erase all the losses and in fact end higher by a third of a percent. Sensex gained 86 points to settle at 26384 while Nifty finished at 7884, up 24 points. BSE mid-cap and small-cap indices gained 0.5% and 0.3% respectively. BSE Metal index and Bankex gained the most among the sectoral indices, rising 1.4% each. Realty and Healthcare indices lost 1.8% and 1% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 671 cr, 822 cr and 21 cr respectively. DIIs were net buyers to the tune of Rs 567 cr.

Rupee appreciated 26 paise to close at 61.09/$.

The Consumer Price Inflation for the month of September cooled off to 6.46%, the lowest since India started computing CPI in January 2012, led by lower food prices and fuel costs.

Reliance Industries reported a consolidated net profit of Rs 5972 cr for the quarter ended September, which was up 0.3% q-o-q and 1.7% y-o-y. Consolidated sales declined 4.3% y-o-y to Rs 1.13 lakh cr. Gross refining margins came in higher than estimates at USD 8.3 a barrel vs 8.7 in first quarter and forecast of 7.7-8.

SEBI yesterday barred DLF Ltd from accessing the capital market for three years for non-disclosure of its 2007 IPO documents.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 20 points higher opening for our market.

Ever since Nifty broke the higher-top higher-bottom formation on the daily chart by closing below 7925 on 25th September, we have been working with a downside target of 7785, which is the 61.8% retracement level of the 7540-8180 upmove.

Nifty, after touching a low of 7796 yesterday, rebounded to close at 7884, validating this support once again.

7785 continues to be crucial support, a breach of which would open up the possibility of the retest of the 7540 bottom.

7972, the top made last week, which is also the immediate previous top on the daily chart, continues to be important resistance to eye.

This makes 7785-7972 a no-trading zone, a breach of which, on either side is required to take a fresh view on Nifty.

Bajaj Auto will report its quarterly earnings today.

WPI inflation for September would come out today and is expected to ease to 3.1% from 3.74% in August.

ASIA STARTS THE WEEK LOWER ON GLOBAL GROWTH CONCERNS; NIFTY LIKELY TO TEST 7785 SUPPORT

ASIA STARTS THE WEEK LOWER ON GLOBAL GROWTH CONCERNS; NIFTY LIKELY TO TEST 7785 SUPPORT

WORLD MARKETS                             

US indices fell between 0.7%-2.3% on Friday as computer-chip manufacturers led the losses after Microchip Technology lowered its sales outlook and Standard & Poor's downgraded its outlook for France to negative from stable.

U.S. import prices fell in September for a third month as the price of petroleum prices fell and a stronger dollar made it cheaper for Americans to purchase European goods.

European markets fell between 1%-2.4%. August industrial production for France came in flat on the previous month, below estimates. Comparative figures for Italy showed a 0.3% rise, but they also missed expectations.

Nymex crude rose 0.3% to $86 a barrel; Gold fell 0.3% to $1222 an ounce.

For the week, Dow lost 2.7%, S & P 500 3.1% and Nasdaq 4.5%, extending the losing streak to third straight week.

AT HOME

After Thursday's dramatic upmove, Friday was marked by equally dramatic reversal as benchmark indices, after a gap down opening, saw further losses through the session to end lower by a percent and quarter. Sensex lost 340 points to settle at 26297 while Nifty finished at 7860, down 101 points. BSE mid-cap and small-cap indices lost 1.4% and 1.1% respectively. Except a 2.3% and 1.2% rise in BSE IT and Teck indices, all other sectoral indices ended in red with Metal index leading the tally, plunging 4.1%, followed by 2.8% cut in Auto index.

Infosys surged after reporting better-than-estimated quarterly earnings and declaring an unexpected 1:1 bonus. Dollar revenues rose 3.1% sequentially to $2201 mn vs expected 2.9% growth. Rupee revenue rose by 4.5% to Rs 13342 while profit rose 7.3% to Rs 3096 cr. Operating profit margin expanded by 96 bps to 26.1%. The company maintained full year dollar revenue growth guidance at 7-9%.

FIIs net sold stocks, index futures and stock futures worth Rs 720 cr, 1464 cr and 176 cr respectively. DIIs were net buyers to the tune of Rs 558 cr.

Rupee depreciated 30 paise to close at 61.35/$.

August industrial output, as represented by IIP, grew at merely 0.4% as against the expectation of a 2.4% uptick.

For the week, Sensex and Nifty lost 1% each, extending the losing streak to third straight week.

OUTLOOK

China has reported a trade surplus of $31 bn for September. Imports are up 7% as against the expectation of a dip of 2.7% while exports are up 15.3%, beating the estimated 11.8% rise.

Asian markets are trading with cuts ranging from 0.5%-1% and SGX Nifty is suggesting about 50 points lower opening for our market. Crude oil is down more than 1%, extending losses from last week, after Kuwait's oil minister reportedly said that the Organization of the Petroleum Exporting Countries (OPEC) is unlikely to cut production to support falling prices. Also, top exporter Saudi Arabia said that it was comfortable with oil prices below $90 a barrel.

Ever since Nifty closed below 7925 on 25th September, a lower-top lower-bottom formation on the daily chart has been in place and as we have been telling, until this formation is negated, the short term trend will continue to be negative.

In that sense, 7972, the top made last week, which is also the immediate previous top on the daily chart, would be the important resistance to eye.

On the way down, 7785, the 61.8% retracement level of the entire 7540-8180 upmove, continues to be crucial support, a breach of which would open up the possibility of the retest of the 7540 bottom.

India's inflation based on CPI for September would be released today and is seen further decelerating to 7.2% from 7.8% in August.

Reliance Industries and Indusind Bank will report their quarterly earnings today.