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.