US EQUITIES END LOWER ON POOR GDP DATA; 8350 CONTINUES TO BE IMMEDIATE HURDLE FOR NIFTY

US EQUITIES END LOWER ON POOR GDP DATA; 8350 CONTINUES TO BE IMMEDIATE HURDLE FOR NIFTY

WORLD MARKETS                             

US indices fell 0.4%-0.6% on renewed concerns over the US economy.

Data showed U.S. economy expanded a meager 0.2% in the first three months of the year, thanks to a strengthening dollar and stubbornly frugal consumers amid the harsh winter. The reading was much lower than the estimates of 1% growth and a big step down from the fourth quarter's 2.2%.

The Federal Reserve Open Market Committee released its meeting statement that removed all calendar references and showed no new guidance on the timing of the rate hike.

Pending home sales data for March showed an increase of 1.1%, the fastest rate since last summer. Mortgage applications gave back their gains last week, falling exactly as much as they had risen the previous week.

Dollar index fell more than 1% and Euro continued to strengthen, climbing above $1.11 for the first time since March 5. Nymex oil climbed $1.52 to $58.58 a barrel.

European markets plunged 1.2%-3.2% as strength of Euro hurt shares of exporting firms such as Pharmaceuticals and autos. A failed bond auction in Germany also weighed on sentiment, with yields surging on fixed income assets. Plus, an euro zone economic, business and industrial sentiment index showed a fall to 103.7 in April from 103.9 in March.

AT HOME

Benchmark indices ended lower by six tenth of a percent after a choppy trading session. Sensex lost 170 points to settle at 27226 while Nifty finished at 8240, down 46 points. BSE mid-cap and small-cap indices however gained 0.4% and 1.1% respectively. BSE FMCG index plunged 1.6%, becoming top loser among the sectoral indices, followed by 0.6% cut in Auto index. Realty and Consumer Durable indices gained 0.9% and 0.8% respectively.

FIIs net sold stocks and index futures worth Rs 718 cr and 197 cr respectively but net bought stock futures worth Rs 315 cr. DIIs were net buyers to the tune of Rs 912 cr.

Rupee fell 15 paise to end at 63.29/$.

HDFC reported standalone net profit growth of 8% at Rs 1862 cr, impacted by deferred tax liability. Total income from operations rose 12.5% to Rs 7448 cr. NII climbed 13.5% to Rs 2534 cr. Gross NPA ratio improved to 0.67% from 0.69% q-o-q.

Axis Bank reported 18.3% rise in net profit at Rs 2180 cr. NII rose 20% to Rs 3799 cr. Gross NPAs and Net NPAs remained unchanged sequentially at 1.34% and 0.44% respectively. The Union Cabinet on Wednesday approved the proposal to set up 100 smart cities across the country. The government also decided to increase the validity of industrial licences for 7 years, as against the present term of 3 years.

OUTLOOK

Today morning, Nikkei is down nearly 2%, Hang Seng is down more than a percent, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 30 points lower opening for our market.

For last two days, we have been mentioning that the immediate hurdle on the hourly chart is placed at 8350, a crossover of which is required for turning the near term view positive. The benchmark reversed from the level of 8308 on both the days and is set to open with a downward gap today, giving credence to our view.

8350 continues to be the immediate hurdle which should be kept as a stop loss in trading shorts. On the way down, lower band of bollinger on the weekly chart, placed around 8100, continues to be the major downside target.

IDFC will report its quarterly earnings today.

8360 CONTINUES TO BE IMMEDIATE HURDLE; FED IN FOCUS

8360 CONTINUES TO BE IMMEDIATE HURDLE; FED IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 gained about a third of a percent while Nasdq ended marginally lower as investors eyed tech earnings and awaited the Federal Reserve's statement on Wednesday.

The Conference Board consumer confidence survey results for April was 95.2, below expectations of a rise. The S&P/Case-Shiller's 20-City Composite gained 5 percent year-over-year in February, compared with a 4.5 percent increase in January.

European markets plunged 1%-2%. UK economy grew by 0.3% in the first three months of the year, below forecasts of 0.5%, indicating that economic expansion was slowing.

Nymex oil rose 7 cents to $57.06 a barrel. Gold gained $11 to $1214 an ounce.

AT HOME

After a choppy trade for better part of the day, benchmark indices spiked up in the late noon trade to end higher by eight tenth of a percent, breaking three day losing streak. Sensex settled at 27396, up 219 points while Nifty finished at 8286, up 72 points. BSE mid-cap and small-cap indices climbed 1% and 1.5% respectively. BSE Bankex and Auto indices soared 2.4% and 2.2% respectively, becoming top gainers among the sectoral indices while FMCG and IT indices lost 0.7% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 1533 cr and 408 cr respectively but net bought stock futures worth Rs 1264 cr. DIIs were net buyers to the tune of Rs 1537 cr.

Rupee appreciated 33 paise to end at 63.14/$.

In an effort to help banks facing asset quality woes and to revive investments in the critical infra sector, the government yesterday discussed 85 large projects from powe, steel, roads and port sector, entailing Rs 3.51 lakh crore in outstanding bank credit.

Bharti Airtel reported worse-than-expected 12.6% q-o-q dip in consolidated net profit at Rs 1255 cr. Revenues fell 0.9% to Rs 23016 cr. EBIDTA margin came in at 35%, up from 33.7%.

Idea reported better-than-expected 22.8% q-o-q rise in net profit at Rs 942 cr. Revenues rose 5.1% to Rs 8422 cr. Operating margin stood at 36.4 as against estimate of 34.5%.

OUTLOOK

Today morning, Shanghai is down more than a percent, other Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting about 10 points lower opening for our market.

In yesterday's report we had mentioned that "Nifty has broken the important support of 200 DMA placed at 8260 as well as the 8269 bottom made in March" and that next major support to eye is 8080, where the lower bad of bollinger on the weekly chart is placed.

We had therefore advised holding on to short positions with the stop loss of 8360, the immediate hurdle on the hourly chart.

That continues to be the view. 8360 continues to be the immediate hurdle, a crossover of which is required to generate a buy on the hourly chart.

HDFC and Ambuja Cement will report their quarterly earnings today.

Two day FOMC meeting concluded today and markets would watch out the post-meeting statement for more clues about when interest rates in the U.S. will be raised.

NIFTY VIOLATES IMPORTANT SUPPORTS; HEADED TO 8080

NIFTY VIOLATES IMPORTANT SUPPORTS; HEADED TO 8080

WORLD MARKETS                             

After a positive start, US indices saw a sustained downward move through the session to end lower by 0.2%-0.6% as investors eyed earnings and looked ahead to the beginning of the two-day Federal Reserve meeting on Tuesday.

Biotech/Pharma shares led the losers with Mylan losing 5.5% after rejecting Teva's unsolicited $40 bn bid but remained open to future talks.

Markit's flash Services PMI slipped to 57.8 in April from a final reading of 59.2 in March.

European markets gained 0.5%-1.9% with investor sentiment boosted by a reshuffle of the team of Greek officials that are negotiating with its creditors.

Nymex crude settled down 16 cents at $56.99 a barrel. Gold surged 2.4% at $1203, the largest percentage gain since Jan 15.

AT HOME

After a marginally higher start, benchmark indices saw a relentless fall through the session to end lower by nearly a percent, closing at the lowest level since 7th January. Sensex slumped 261 points to settle at 27177 while Nifty finished at 8214, down 91 points. BSE mid-cap and small-cap indices lost 2.1% and 2.8% respectively. All the BSE Sectoral indices ended in red with Realty and Healthcare indices leading the tally, giving away 4% and 3.2% respectively.

FIIs net sold stocks and index futures worth Rs 1749 cr and 421 cr respectively but net bought stock futures worth Rs 916 cr. DIIs were net buyers to the tune of Rs 1668 cr.

Rupee appreciated 8 paise to end at 63.48/$.

Maruti Suzuki beat expectations on every parameter with the profit rising a whopping 60.5% to Rs 1284 cr, supported by higher volumes and favorable foreign exchange. Revenues rose 12.5% to Rs 13625 cr. Operating margin expanded by 540 to 15.8%.

ICICI Bank reported roughly in-line with estimated net profit and better-than-estimated NII but asset quality worsened. Net profit rose 10.2% to Rs 2922 cr while NII rose 16.6% to Rs 5079 cr. Net interest margin improved to 3.57% from 3.46%. Provisions for the bad loans jumped 88.4% to Rs 1345 cr y-o-y. Gross NPAs rose 75 bps q-o-q to 3.78% while net NPAs climbed 64 bps to 1.61%.

OUTLOOK

Today morning, except a 0.7% higher Nikkei, other Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 20 points lower opening for our market.

Nifty yesterday plunged 91 points to end at 8214, breaking the important support of 200 DMA placed at 8260 as well as the 8269 bottom made in March.

Setup on the daily chart continues to be negative and next logical target would be around 8080, where the lower band of bollinger on the weekly chart is placed.

Immediate resistance on the hourly chart is placed around 8360, with the stop loss of which short positions should be held on to.

Bharti Airtel and Idea will report their quarterly earnings today.

NIFTY REBOUNDS FROM CRUCIAL SUPPORT; 8470 IS THE IMMEDIATE RESISTANCE

WORLD MARKETS                             

Dow and S & P 500 gained 0.1% and 0.2% respectively while Nasdaq surged 0.7%  on Friday as investors cheered earnings reports from Microsoft, Google, Amazon.com and Starbucks. Nasdaq closed at record for the second day in a row.

Microsoft soared more than 10% after reporting earnings and revenue that beat estimates after the close Thursday. Amazon.com climbed 14% despite reporting an expected decline in earnings and light guidance.

Durable goods, ex-transportation, fell 0.2%, below expectations for a slight gain but less than February's 1.3% decline. Including transportation, which tends to be volatile, the report posted an increase of 4% for March, surpassing expectations for a moderate bounce back, after February's disappointing 1.4% month-on-month drop.

Nymex oil fell 1% to $57.15 a barrel. Gold plunged $19.30 to $1175.

European markets gained between 0.3%-1% as investors reacted to a slew of corporate earnings news. Germany's IFO survey of business sentiment showed a rise in April and came in close to market expectations.

As expected, little progress was made when Greece's finance minister met with his euro zone counterparts on Friday.

AT HOME

After falling nearly a percent and half through the session, benchmark indices recovered somewhat in last 20 minutes of trade to finally end lower by 1.1%. Sensex settled at 27438, down 297 points while Nifty lost 93 points to finish at 8305. BSE mid-cap and small-cap indices lost 1.6% and 2.7% respectively. Except a flat FMCG index, all other BSE sectoral indices ended in red, with Realty and Consumer Durable indices leading the tally, giving away 3.8% and 3.2% respectively.

Infosys missed street estimates with the dollar revenues falling 2.66% to USD 2159 mn as against expectation of a 0.3% growth. In constant currency terms, revenues fell 0.4% Vs expectation of a 2%-2.5% growth. Net profit fell 4.7% to Rs 3097 cr and rupee revenues fell 2.8% to Rs 13411 cr. The company however, surprised with a 1:1 bonus and gave a dollar revenue growth guidance of 10-12% for 2015-16, which was above estimates.

FIIs net sold stocks and index futures worth Rs 775 cr and 530 cr respectively but net bought stock futures worth Rs 884 cr. DIIs were net buyers to the tune of Rs 896 cr.

Rupee fell 24 paise to end at 63.56/$, a 3-1/2 month low.

For the week, Sensex and Nifty plunged 3.5% each, extending the losing streak to second week.

The long-pending Goods and Services Tax (GST) Bill was moved in the Lok Sabha on Friday for consideration amid stiff resistance by several Opposition parties. Members of the Congress, led by Sonia Gandhi, along with those of the TMC, the Left and NCP staged a walk-out after their plea for referring the Constitution Amendment Bill to the Standing Committee was not accepted.

‎MoS Finance Jayant Sinha in a written reply to Parliament revealed on Friday that the 68 MAT notices served to FPI's - amount to only Rs 600 cr - a huge climbdown from the Rs 40,000 cr likely demand that Union Finance Minister Arun Jaitely had spoken about.

OUTLOOK

Today morning Shanghai and Hang Seng are up about a percent and half, other Asian markets are little changed and SGX Nifty is suggesting about 20 points higher opening for our market.

Nifty on Friday touched a low of 8273, nearly retesting the 8269 bottom made in March, before closing at 8305. As we have been mentioning, 8269 continues to be a crcial support, as a weekly close below which would confirm a lower-top lower-bottom formation on the weekly chart and would turn the medium-term view bearish. Also, you have got important 200-DMA support around 8260.

7961, the bottom made in December, would be the next logical target if support levels mentioned above are violated.

Traders should wait for the close below 8260 for initiating fresh shorts. Immediate resistance on the hourly chart is placed around 8470, a crossover of which should be awaited for taking fresh longs.

Maruti and ICICI Bank will report their quarterly earnings today.

8545 CONTINUES TO BE IMMEDIATE HURDLE; 8270 CRUCIAL SUPPORT

8545 CONTINUES TO BE IMMEDIATE HURDLE; 8270 CRUCIAL SUPPORT

WORLD MARKETS                             

US indices gained between 0.1%-0.4% yesterday with the Nasdaq setting a new, all-time closing record, topping the previous high of 5048.62 set in March 2000.

New home sales for March came in weaker than expected, at 481,000 in March, versus the 510,000 unit estimate. Weekly jobless claims showed an increase of 1,000 to 295,000. The preliminary manufacturing PMI fell to 54.2 in April from the final March read of 55.7.

IBM climbed 3% after spiking more than 3.5% on positive follow-through from its earnings report on Monday. AT&T jumped more than 4% after reporting earnings after the close Wednesday that beat estimates on revenue that came in slightly below expectations. Caterpillar rose after beating expectations on both earnings per share and revenue. On the flip side, 3M, GM and PepsiCo fell after missing earnings estimates.

Corporate news and the highest settlement in crude for 2015 sent telecommunications and energy higher.

Nymex oil surged $1.58 or 2.8% to $57.74 a barrel.

European markets ended mixed. FTSE gained 0.4% while DAX, CAC and Italy lost 0.5%-1.2% with DAX leading the fall after German flash composite PMI fell to 54.2 in April from an eight-month peak of 55.4 in March. For the Eurozone, the reading stood at 53.5, down from 54 in March.

Greek Prime Minister called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor. Both sides called the discussions constructive.

AT HOME

After gaining nearly a percent in the initial trade, benchmark indices tumbled a percent and quarter from the top of the day to end lower by about four tenth of a percent. Sensex lost 155 points to settle at 27735 while Nifty finished at 8398, down 31 points. BSE mid-cap index gained 0.6% while the small-cap index lost 0.2%. BSE Metal and Consumer Durable indices gained 1.6% and 1.2% respectively, becoming top gainers among the sectoral indices while Capital Goods and Healthcare indices were the top losers, giving away 0.9% respectively.

FIIs net sold stocks and index futures worth Rs 277 cr and 585 cr respectively but net bought stock futures worth Rs 497 cr. DIIs were net buyers to the tune of Rs 560 cr.

Rupee plunged 50 paise to end at 3-month low of 63.32/$.

HDFC Bank's reported in-line with estimated 20.6% rise in net profit at Rs 2807 cr. NII stood at Rs. 6013 cr, up 21.4%, slightly better than estimated 20.6% growth. Gross NPAs stood at 0.9% from 1% q-o-q while net NPA stood at 0.2%, improving from 0.3%.

Cairn India posted a fourth quarter loss of Rs 241 cr on revenues of Rs 2677 cr as against a profit of Rs 1350 cr on revenues of Rs 3504 cr in the third quarter. EBIDTA stood at Rs 727 cr Vs Rs 2113 cr.

RBI yesterday revised priority sector lending (PSL) norms, adding new segments such as micro, small and medium enterprise (M SME), social infrastructure and renewable energy under the ambit of priority sectors. Further, the Reserve Bank outlined targets of 8% and 7.5% (of a bank’s total loan book) for small and marginal farmers and micro enterprises, respectively, which shall be achieved in a phased manner by March 2017. The RBI also maintained the PSL target for the weaker section at 10 percent.

OUTLOOK

Today morning Nikkei and Shanghai are down more than half a percent but other Asian markets are trading with gains in the vicinity of half a percent. SGX Nifty is suggesting about 10 points higher opening for our market.

In yesterday's report we had mentioned that while the recovery seen on Wednesday was expected to extend itself, a crossover of 8545 would be required to generate a buy on the hourly chart.

The benchmark, after touching a high of 8505 in the initial trade, fell later to end at 8398.

8545 continues to be immediate hurdle a crossover of which is required to generate a buy on the hourly chart. On the way down, 8270 continues to be crucial support to eye.

Infosys will report its quarterly earnings today. Dollar revenues are expected to rise 0.3% q-o-q to $2224 mn. In constant currency basis, the growth is seen between 2%-2.5%. EBIT margin is expected at 25.95%, down from 26.74%. Net profit is expected to fall 2.7% to Rs 3161 cr. FY16 revenue guidance is seen at 9-11% in constant currency terms.

An important meeting of Euro zone finance ministers is scheduled today, where Greece's progress in its reform pledges will be reviewed. It remains to be seen whether the country reaches an agreement with creditors on a comprehensive list of reforms to get the remaining 7.2 billion euros from its bailout.

A DRAMATIC REBOUND FROM AN ANTICIPATED SUPPORT ZONE

A DRAMATIC REBOUND FROM AN ANTICIPATED SUPPORT ZONE

WORLD MARKETS                             

US indices gained about half a percent, reacting to better-than-expected earnings from Coca-Cola, McDonald's and Boeing and signs of strength in the housing market.

In an encouraging sign that the housing market is picking up, total mortgage application volume rose 2.3% week to week on a seasonally adjusted basis for the week ending April 17th. Existing home sales data for March beat expectations at 5.19 million. The FHFA house price index for February showed a 0.7% increase from the previous month.

Shares of Visa and MasterCard closed up about 4% following China's announcement that the country will open its market for clearing domestic bank card transactions.

European markets ended mixed after digested a slew of earnings from European companies. FTSE and DAX fell about half a percent while France and Italy rose a third of a percent. Greek Finance Minister Yanis Varoufakis said on Tuesday that he was confident Greece would reach a deal with its international lenders, although this may not happen in the upcoming meeting of euro zone finance ministers on April 24.

Gold fell $16.20 to $1187 an ounce. Nymex crude fell 0.8% to $56.16 a barrel.

AT HOME

After falling more than a percent, benchmark indices saw a dramatic, more than a percent and a half, surge in the late noon trade to end higher by nearly two third of a percent, snapping a five day losing streak. Sensex settled at 27890, up 214 points while Nifty finished at 8430, up 52 points. BSE mid-cap index gained 0.4% while the small-cap index ended a tad lower. BSE Capital Goods and Healthcare indices were the top gainers among the sectoral indices, rising 1.9% and 1.2% respectively while IT and Oil & Gas indices lost 0.7% and 0.4% respectively.

FIIs net sold stocks worth Rs 910 cr but net bought index futures and stock futures worth Rs 35 cr and 60 cr respectively. DIIs were net buyers to the tune of Rs 218 cr.

Rupee appreciated 3 paise to end at 62.82/$.

Indian Meteorological Department released its first forecast for the south-west monsoon and said that the rains are expected to be 93% of a long-term average. Moreover it said that there is 28% probability of a normal monsoon, 35% probability of a below normal monsoon and 33% probability of a deficient monsoon.

In an important development, Revenue Secretary Shaktikanta Das, Central Board of Direct Taxes (CBDT), Chairperson Anita Kapur and Minister of State for Finance Jayant Sinha told investors in a conference call that MAT would not be levied on funds that have invested through countries such as Singapore and Mauritius with which India has a double taxation avoidance agreement (DTAA).

OUTLOOK

China's HSBC flash manufacturing PMI for April has come in at 49.2 as against the final reading of 49.6 in March.

Shanghai has marginally dipped into the negative territory after the data but other Asian markets are trading with average gains of half a percent. SGX Nifty is suggesting about 35 points higher opening for our market.

In yesterday's report we had reiterated our stance that Nifty is close to some crucial support levels and had advised booking profits in short positions considering the oversold status on the hourly chart along with formation of a positive divergence.

The benchmark touched a low of 8285, nearly retesting the 8269 bottom made in March and bounced back sharply to end at 8430, vindicating our view.

The recovery might extend itself in today's session. Immediate resistance to watch on the hourly chart is 8545, a crossover of which would be needed to generate a buy on the hourly chart.

On the way down 8269 continues to be crucial support to eye. 

HDFC Bank and Cairn India will report its quarterly earnings today.

APPROACHING CRUCIAL SUPPORTS

APPROACHING CRUCIAL SUPPORTS

WORLD MARKETS                             

Dow and S & P 500 lost 0.5% and 0.2% respectively, reacting to lackluster earnings reports of major companies while Nasdaq gained 0.4% on the back of strength in biotech shares.

IBM's revenues continued to decline for the 12th straight quarter, DuPont's earnings were affected by FX headwinds and Travelers' missed both the top and bottom-line.

European markets, except a 0.4% lower Italy, gained upto 0.4%. Germany’s ZEW economic sentiment index dipped to 53.3 in April from 54.8 in March, missing expectations. Greece closed more than 3% lower and government bond yields soared amid growing concerns the country might default on its hefty debt burden and/or leave the euro zone.

Nymex crude fell 2% or $1.12 to $55.26 a barrel.

AT HOME

Benchmark indices ended lower by about eight tenth of a percent after a choppy trade, extending the losing streak to fifth straight session and closing at the lowest level since 27th March. Sensex lost 210 points to settle at 27676 while Nifty finished at 8378, down 70 points. BSE mid-cap and small-cap indices lost 0.4% and 0.3% respectively. Except a 0.1% each rise in BSE Metal and Consumer Durable indices, all the sectoral indices ended in red with Healthcare index leading the tally, plunging 3.2%, followed by 1.3% cut in Auto index.

Sun Pharma plunged after Daiichi Sankyo sold its entire 8.9% stake in the company via multiple blocks at between Rs 930-968 per share (lower end of the band) amounting to around $3.6 bn.

FIIs net bought stocks worth Rs 17489 cr which included about Rs 18000 on account of Sun Pharma deal, stripped of which net selling stood at around Rs 500 cr. They net bought index futures worth Rs 319 cr but net sold stock futures worth Rs 1294 cr. DIIs were net buyers to the tune of Rs 1365 cr.

Rupee appreciated 6 paise to end at 62.85/$.

Wipro reported worse than expected 1.2% in IT services revenues at USD 1.77 bn. Rupee revenues fell 0.9% to Rs 11242 cr. On constant currency basis, dollar revenue grew 1.2% to USD 1.82 bn. which was within its guidance range of USD 1.81-1.85 billion. However, this was lower compared its peers TCS (1.6%) and HCL Technologies (2.7%). For the April-June quarter, company expects IT services revenues in the range of USD 1.76-1.79 bn, implying a sequential growth of negative 0.5% to positive 1%.

HCL Tech reported 12.2% dip in consolidated net profit at Rs 1683 cr. Rupee revenue declined 0.2% to Rs 9267 cr while dollar revenue was flat at USD 1.49 bn. In constant currency terms dollar revenues rose 2.7%, lower than the 3% estimate.

OUTLOOK

Today morning Asian markets are trading with gains of 0.2%-1.2% but SGX Nifty is suggesting about 15 points lower opening for our market.

In yesterday's report we had mentioned that Nifty is close to some crucial supports in the form of 34-week moving average placed at 8416 and a trendline adjoining recent bottoms on the weekly chart placed around 8350. We had therefore advised booking profit in short positions as 8350 approaches.

The benchmark, after touching a low of 8352, recovered somewhat to close at 8378.

8350 continues to be immediate support below which 8269, the bottom made in March, would be very crucial support to eye. A weekly close below 8269 would confirm a lower-top lower-bottom formation on the weekly chart and would turn the medium term view negative.

Meanwhile considering the fact that Nifty is heavily oversold on the hourly chart and also made a positive divergence in yesterday, traders would do well to book profits in short positions and wait for the further cues for taking a fresh view. Alternatively, immediate resistance, placed around 8610, can be kept as a stop loss in trading shorts.

MET department will release its first monsoon forecast today.

EUROPE, US CLIMBS ON CHINA STIMULUS; NIFTY NEAR CRUCIAL SUPPORTS

EUROPE, US CLIMBS ON CHINA STIMULUS; NIFTY NEAR CRUCIAL SUPPORTS

WORLD MARKETS

US indices surged 0.9%-1.3% amid an unexpected stimulus from China's central bank as investors kept eyeing corporate earnings.

On Sunday, China's central bank lowered the reserve requirement ratio for all banks by 100 basis points. The wider-than-expected cut was the People's Bank of China's second reduction in two months, and marks a continuing effort by the world's second-largest economy to combat slowing growth.

Morgan Stanley earned an adjusted 85 cents per share, beating estimates of 78 cents, with revenue also above forecasts.

Key European markets gained 0.8%-1.7%

Nymex crude rose 1.2% or 64 cents to $56.38 per barrel.

                                                             

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end with deep cuts of nearly 2%, registering largest single day fall since 26th March and closing at the lowest level since 27th March. Sensex plunged 556 points to settle at 27886 while Nifty finished at 8448, down 158 points. BSE mid-cap and small-cap indices lost 1.9% and 2% respectively. All the BSE sectoral indices ended in red with Realty and FMCG indices leading the tally, giving away 2.7% each.

FIIs net sold stocks, index futures and stock futures worth Rs 1507 cr, 1339 cr and 199 cr respectively. DIIs were net buyers to the tune of Rs 962 cr.

Rupee nosedived 55 paise to hit one month low of 62.91/$.

OUTLOOK

Today morning, Hang Seng is up more than a percent, Nikkei and Shanghai are up more than half a percent and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that after advising booking profits in the 8800-8860 resistance zone, we turned our bias on Nifty negative when 8722 was broken last Thursday. We were working with the major downside taret of 8490, which was the 61.8% retracement level of the 8269-8845 upmove.

The benchmark yesterday plunged to 8423 before closing at 8448, achieving the target mentioned above and vindicating our view.

After yesterday's fall, Nifty is close to some crucial supports. 34-week moving average is placed at 8416 and a trendline adjoining recent bottoms on the weekly chart lands support around 8350. Below 8350, 8269, the bottom made in March, would be the major support to eye.

Traders are advised to book profit in short positions as 8350 approaches.

Wipro and HCL Tech will report their quarterly earnings today.

NIFTY ACHIEVES FIRST DOWNSIDE TARGET, ON TRACK FOR SECOND

NIFTY ACHIEVES FIRST DOWNSIDE TARGET, ON TRACK FOR SECOND

WORLD MARKETS                             

Dow and Nasdaq plunged 1.5% each while S & P 500 lost 1.1% on Friday on mounting tensions over Greece debt negotiations and the put trading rules in China.

Chinese futures tumbled over news of coming government regulation to expand short-selling and limit over-the-counter margin trading.

Consumer price index showed an increase of 0.2% in March, below expectations of 0.3%. Core CPI, excluding food and energy, came in slightly above expectations at 0.2%, the same level as in February. Consumer sentiment rose more than expected in April.

European markets fell between 1%-2.6%. Greek stocks closed around 3% lower. Euro zone finance ministers are due to meet on April 24 to discuss Greece making economic and political reforms in return for aid. Some officials, like German Finance Minister Wolfgang Schaeuble, are skeptical the meeting will yield results.

German bund yields dipped below 0.05%. Italian, Spanish and Portuguese 10-year bond yields jumped more than 5 percent.

Nymex crude fell 97 cents or 1.7% to $55.74 a barrel but posted gains for the fifth week in a row.

For the week, US markets fell between 1%-1.3%. European markets plunged between 1.3%-5.5% with DAX leading the tally.

China, on Sunday, lowered the reserve requirement ratio for all banks by 100 basis points. This marked the second cut in two months as the world's second-biggest economy attempted to combat slowing growth.

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end deep in the red, extending the losing streak to third straight day. Sensex lost 0.8% or 224 points to settle at 28442 while Nifty finished at 8606, down 101 points or 1.2%. BSE mid-cap and small-cap indices tumbled 1.2% and 2% respectively. Except a 1.1% rise in BSE Metal index, all other sectoral indices ended in red with Healthcare and IT indices leading the tally, giving away 3% and 2% respectively.

FIIs net sold stocks and stock futures worth Rs 676 cr and 893 cr respectively but net bought index futures worth rs 409 cr. DIIs were net buyers to the tune of Rs 73 cr.

Rupee depreciated 6 paise to end at 62.36/$.

For the week, Sensex and Nifty lost 1.5% and 2% respectively, breaking the two-week winning streak.

India's trade deficit in March widened to a 4-month high of $11.79 bn as imports rose to $35.74 bn from $28.39 bn while exports stood at $23.95 bn vs $21.55 bn. Gold imports surged to $4.95 bn from $1.98 bn.

Reliance Industries reported better-than-estimated 22.8% rise in fourth quarter net profit at Rs 6243 cr driven by strong operational performance in refining business. Revenues however were down 30.1% to Rs 56043 cr. Gross refining margin (GRM) also topped expectations at USD 10.1 a barrel against USD 7.3 a barrel in the December quarter.

OUTLOOK

Today morning, barring a modestly higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

After advising booking profits in 8800-8860 region, we turned our bias on Nifty negative when immediate support of 8722 was breached. We had given downside targets of 8625, 8560 and 8490, which were the 38.2%, 50% and 61.8% retracement levels of the 8269-8845 upmove.

The benchmark has since fallen to 8597, vindicating our negative bias. Oscillators on the hourly chart are suggesting some more downside and 8560 followed by 8490 would continue to be the downside targets to eye.

Immediate resistance on the hourly chart is placed at 8740, with the stop loss of which short positions can be held on to.

The second part of budget session of Parliament starts today and will conclude on 8th May. 

STAY SHORT WITH THE STOP LOSS OF 8770

STAY SHORT WITH THE STOP LOSS OF 8770

WORLD MARKETS                             

US indices ended marginally lower.

Nymex crude rose 32 cents to settle at $56.71 per barrel on news that a tribal group made up of former Al Qaeda militants took control of a major southern oil terminal in Yemen after military forces protecting it withdrew from the site. Brent rose 73 cents to $64.05 a barrel. Benchmark contracts fell earlier after OPEC reported its oil output surged in March.

March housing starts showed a 0.926 million unit rate, below expectations but above February's 0.908 million unit rate. Weekly initial jobless claims came in at 294,000, above expectations and a slight increase from the prior week. The Philadelphia Fed's business outlook index for April showed 7.5, above expectations.

The U.S. dollar fell about 1 percent as the euro gained to above $1.08 for the first time in a week.

European markets saw cuts between 0.5%-1.9%, weighed down by a mixed bag of earnings reports and the further deterioration of Greece's economic outlook.

Ratings agency Standard & Poor's cut Greece's credit rating to "CCC+" from "B-". The 10-year yield on Greek debt reached as high as 12.8%.

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end lower by half a percent, extending the losing streak to second day. Sensex lost 134 points to settle at 28666 while Nifty finished at 8707, down 43 points. BSE mid-cap and small-cap indices lost 0.6% and 0.7% respectively. Except a 0.9% rise in BSE Oil & Gas index, all other sectoral indices ended in red with Realty and Capital Goods indices leading the tally, giving away 2.3% and 1.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 214 cr, 1071 cr and 376 cr respectively. DIIs were net buyers to the tune of Rs 432 cr.

Rupee appreciated 7 paise to end at 62.30/$.

Indusind Bank reported 25% rise in fourth quarter net profit at Rs 495.3 cr boosted by higher other income and lower provisions. NII rose 18.4% to Rs 925.14 cr. Estimated figures for profit and NII were Rs 498 cr and 945 cr respectively. Gross NPA fell to 0.81% from 1.05% q-o-q while net NPA stood at 0.31% as against 0.32%.

TCS reported 0.8% q-o-q fall in dollar revenue at $3900 mn. In rupee terms, revenues fell 1.1% to Rs 24220 cr, EBIT fell 0.5% to Rs 6591 cr while net profit (adjusted for one-time employee bonus) rose 8.4% to Rs 5906 cr supported by higher other income. In constant currency terms, revenues were up 1.6%, lower than estimates.

OUTLOOK

Today morning Shanghai and Hang Seng are up about 2% and 0.7% respectively, other Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 10 points lower opening for our market.

In yesterday's report we had mentioned that a sustained trading below 8722, the low made on Wednesday, would generate a sell on the hourly chart and would pave the way for the further fall till about 8625, which is the 38.2% retracement level of the 8269-8845 upmove.

The benchmark broke 8722 level and plunged all the way to 8645, but rebounded later to close at 8706.

8825 continues to be immediate support below which 8560, the 50% retracement level of the 8269-8845 upmove, would be the next target. Immediate resistance on the hourly chart is placed around 8770, with the stop loss of which short positions can be held on to.

Reliance Industries will report its quarterly earnings. The company is expected to report its best ever quarterly profit at Rs 6000 cr, up from Rs 5085 cr in December quarter supported by higher Gross Refining Margin which are likely to shot up to $9.9/barrel from $7.3/bbl.

India's trade data for March would be released today and is expected to come in between $ 8-11 bn.

A SHARP PLUNGE FROM AN EXPECTED RESISTANCE ZONE VINDICATES OUR VIEW

A SHARP PLUNGE FROM AN EXPECTED RESISTANCE ZONE VINDICATES OUR VIEW

WORLD MARKETS                             

US indices gained between 0.4%-0.7% amid gains in oil and gas plays and as investors continued to digest first-quarter financial earnings from corporate America.

Nymex oil surged $3.10 or 5.8% to $56.39 a barrel, its highest close of the year after the U.S. Energy Information Administration reported a less-than-expected increase of 1.3 million barrels in weekly inventories.

Intel climbed more than 4%. The blue chip reported earnings in line with estimates on revenue that missed, but said it expects to benefit from gains in its personal computer chips and its data center business. Bank of America posted a first-quarter profit, swinging from a surprise loss a year earlier when it took a charge of $6 billion for litigation expenses. JPMorgan Chase reported investment banking fees and core trading revenues were both up about 20% year over year.

Federal Reserve's Beige Book noted improvements in residential real estate but reported overall moderate growth.  Industrial production for March showed a greater-than-expected decline of 0.6%, following a slight gain in February. Capacity utilization also came in slightly below the previous month. Mortgage applications decreased 2.3% from the prior week as interest rates ticked up slightly. Meanwhile, the Empire Manufacturing survey showed growth in New York State unexpectedly contracted in April, weakening for a third straight month as the pace of new orders fell to a multi-year low. The National Association of Home Builders housing market index showed a sharp increase to 56 in April.

In Europe, except a flattish DAX, other markets gained between 0.3%-1.2%. The ECB announced it was holding its main interest rate at a record low of 0.05%. In his regular press conference, ECB chief Mario Draghi dismissed fears of a Greek default and a bubble in bond markets.

Greece remained in focus, with S&P downgrading its rating to "CCC+" from "B-" with a negative outlook.

AT HOME

After falling nearly half a percent from the opening high, benchmark indices recouped most of the losses in the noon trade but plunged sharply in last half an hour to end lower by about nine tenth of a percent. Sensex lost 245 points to settle at 28800 while Nifty finished at 8750, down 84 points. BSE mid-cap and small-cap indices lost 0.5% and 0.3% respectively. Except a 0.2% each rise in BSE FMCG and Oil & Gas indices, all the sectoral indices ended in red with Healthcare and Auto indices leading the tally, giving away 1.5% each.

FIIs net bought stocks and index futures worth Rs 108 cr and 783 cr respectively but net sold stock futures worth Rs 20 cr. DIIs were net sellers to the tune of Rs 60 cr.

Rupee appreciated 14 paise to end at 62.36/$.

Wholesale price index based inflation for March fell to a new low of -2.33%, the fourth successive month of deflating prices, as against the February's reading of -2.06%.

Oil marketing companies cut petrol and diesel price by Rs 0.80/litre and 1.30/litre respectively.

OUTLOOK

Today morning, Nikkei is down about four tenth of a percent, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had mentioned that Nifty has achieved the major target of 8800, which was the 61.8% retracement level of the 9119-8269 fall and was approaching a stiff resistance in the form of upper band of bollinger placed around 8860. We had therefore advised booking partial profit in long positions and raising stop loss in remaining ones to 8730.

The benchmark, after touching a high of 8845 in the opening trade, plunged to 8722 before closing at 8750, vindicating our view.

A sustained trading below 8722, the low made yesterday, would generate a sell on the hourly chart and would pave the way for the further fall till about 8620, which is the 38.2% retracement level of the 8265-8845 upmove.

On the way up, one should wait for the crossover of 8850 for building fresh longs.

TCS and Indusind Bank will report their quarterly earnings today. TCS is expected to report a sequential dollar revenue growth of 0.2% to USD 3940 mn. Rupee revenue is seen declining 0.1% to Rs 24456 cr. Operating profit is seen falling 1.2% to Rs 6540 cr and EBIT margin are seen at 26.74%, down from 27.04%. Net profit may fall 0.6% to Rs 5410 cr.

TRAIL STOP LOSS TO 8730

TRAIL STOP LOSS TO 8730

WORLD MARKETS                             

Dow and S & P 500 gained 0.3% and 0.2% respectively on the back of stronger oil and JPMorgan Chase earnings while Nasdaq lost 0.2%.

Nymex oil surged $1.38 to $53.29 a barrel after a forecasted decline in U.S. shale output and continued tensions in Yemen.

Retail sales showed an increase of 0.9%, slightly below expectations of a 1.1% increase. The Producer Price Index (PPI) showed an increase of 0.2% in March, in line with expectations and breaking four consecutive months of declines.  U.S. small business confidence fell in March as hiring and capital spending plans weakened, adding to signs that economic growth braked sharply in the first quarter.

European markets, except a 0.2% higher FTSE, lost 0.7%-1.4%

AT HOME

Benchmark indices ended higher by six tenth of a percent, closing at the highest level since 5th March  and with Nifty extending the winning streak to seventh straight day. Sensex gained 165 points to settle at 29044 while Nifty finished at 8834, up 54 points.  BSE mid-cap and small-cap indices gained 0.3% and 0.8% respectively. Except a 0.6% and 0.2% cut in BSE Auto and Realty indices respectively, all the sectoral indices ended in green with Consumer Durable and Healthcare indices leading the tally, putting on 1.6% and 1.5% respectively.

FIIs net bought stocks and stock futures worth Rs 417 cr and 106 cr respectively but net sold index futures worth Rs 166 cr. DIIs were net buyers to the tune of Rs 46 cr.

Rupee depreciated 20 paise to end at 62.50/$.

Data released on Monday showed retail inflation, as measured by the CPI, slowed to 5.17% from 5.37% in February.

ACC reported better-than-estimated earnings. The 10% contraction in sales volumes was more than offset by 11.5% increase in net realization. Operating margin at 14.3% was around 200 bps higher than a year back. Operating profit rose by 13.2%. Net profit was 41% lower than the year-ago period. But, after adjustments, especially for one-time provisions or expenses, the net profit was in line with a year back and marginally better than forecast.

OUTLOOK

China's GDP rose 7% in the first quarter, slowing from 7.3% in the fourth quarter, but above the estimate of 6.9%. The industrial output rose 5.6% in March, slowing from 6.8% growth in the combined January-February period and estimates of 6.9% growth.

Asian markets are trading mixed with modest changes and  SGX Nifty is trading at 8840, suggesting about 15 points lower start compared to Monday's close of 8855 of Nifty future.

Ever since Nifty crossed immediate hurdle of 8510 on 31st March, we had been working with the targets of 8700 and 8800 which were the 34 DMA and 61.8% retracement levels of the 9119-8269 fall respectively.

The benchmark on Monday touched a high of 8842 before closing at 8834, achieving the 8800 target and vindicating our view.

A crossover of 8842, the high made on Monday, would mark a fresh berakout on the daily chart and would pave the way for the retest of the 9119 top.

Immediate support on the hourly chart has moved up to 8730, with the stop loss of which existing longs should be held on to.

WPI for March would be released today and is expected to show a reading of -2.07% as against -2.06% in February.