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.