NIFTY HOLDS 8300 SUPPORT ONCE AGAIN; 8375 IS THE IMMEDIATE HURDLE

NIFTY HOLDS 8300 SUPPORT ONCE AGAIN; 8375 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices ended modestly lower yesterday following a 6.5 percent plunge in Chinese shares and amid a lack of resolution on Greek debt talks.

Shanghai bourse posted its biggest one-day loss since January 19 on the back of news that more Chinese brokerages are tightening margin lending rules, spurring fears that the retail investor-driven rally may be coming to an end.

Regarding Greece, IMF Managing Director Christine Lagarde told a German newspaper that a Greek exit from the euro zone was possible but that this would probably not herald the end of the euro currency.

European officials said there was some way to go before any agreement could be drawn up and that they were surprised by the upbeat comments from Greece that it had stated crafting a "staff level agreement" with its international bailout supervisors and that a deal should be reached by Sunday.

European markets, except a 0.1% higher FTSE, lost between 0.4%-0.9%.

AT HOME

After falling nearly three fourth of a percent, benchmark indices recouped most of the losses in the second half to end a fifth of a percent down. Sensex settled at 27507, down 58 points while Nifty lost 16 points to finish at 8319. BSE mid-cap and small-cap indices lost 0.5% and 0.2% respectively. BSE Consumer Durable and IT indices gained 1.3% and 0.7% respectively, becoming top gainers among the sectoral indices while Healthcare index lost 1.3%, becoming the top loser, followed by 0.5% cut in Bankex.

FIIs net sold stocks and stock futures worth Rs 793 cr and 646 cr respectively but net bought index futures worth Rs 651 cr. DIIs were net buyers to the tune of Rs 683 cr.

Rupee appreciated 21 paise to end at 63.80/$.

BPCL reported better-than-estimated 30% fall in March quarter net profit at Rs 2853 cr. Total income fell 31.3% to Rs 51346 cr. Gross refining margins stood at USD 3.62 per barrel against 4.33/bbl y-o-y.

Hindalco reported worse-than-expected 36% y-o-y fall in March quarter net profit at Rs 159.5 cr, impacted by exceptional item, higher finance cost and tax outgo. Turnover rose 11% to Rs 9371 cr.

ONGC reported worse than expected 19.5% fall in quarterly profit at Rs 3935 cr. Total income grew by 1.6% to Rs 21647 cr. Operating margin fell 790 bs to 35.2%.

OUTLOOK

Today morning except a 0.7% lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points lower opening for our market.

In yesterday's report we had reiterated that 8320-8300 continues to be immediate support area and traders would do well to wait for the close below 8300 for taking fresh negative view on Nifty.

The benchmark, after touching a low of 8270, rebounded to end at 8319, holding 8300 support on closing basis.

We would like to reiterate above mentioned view. On the way up 8375 is the immediate hurdle, a sustained trading above which would generate a buy on the hourly chart and can take benchmark to around 8490, the top made last week.

India's GDP data for the fourth quarter of FY15 will be released today and is expected to show a reading of 7.2%, down from 7.5% in Q3.

M & M and Sun Pharma will report their quarterly earnings today.

US, EUROPEAN EQUITIES CLIMB ON GREEK DEAL HOPES; NIFTY HOLDS 8300 SUPPORT ON CLOSING BASIS

US, EUROPEAN EQUITIES CLIMB ON GREEK DEAL HOPES; NIFTY HOLDS 8300 SUPPORT ON CLOSING BASIS

WORLD MARKETS                             

Nasdaq surged 1.5% while Dow and S & P 500 gained 0.7% and 0.9% respectively yesterday, with the tech-heavy Nasdaq logging a record high close, on the back of encouraging Greece headlines and a slight pause in the dollar.

Greek Prime Minister Alexis Tsipras yesterday said the negotiations are on the "final stretch" towards a positive deal, Reuters reported. A European official said in a Bloomberg report that "we are still working toward an agreement" and that no accord was reached.

Later in the day, German Finance Minister Wolfgang Schaeuble said there was not much progress in the Greek debt talks and he was surprised by the upbeat tone from some Greek government officials, according to an ARD television interview cited by Reuters.

European markets climbed 1.2%-2.3% .

Dollar index, after touching a high of 97.77, eased to end at 97.30. Nymex oill fell 52 cents or 1% to $57.50 a barrel.

AT HOME

After falling nearly three fourth of a percent in the initial trade, benchmark indices recouped all the lost ground through the session to end little changed. Sensex settled at 27565, up 33 points while Nifty lost 5 points to finish at 8335. BSE mid-cap index gained 0.1% while the small-cap index lost 0.03%. BSE Auto and IT indices plunged 2.1% and 1.9% respectively, becoming top losers among the sectoral indices while Bankex and Oil & Gas indices gained 1.2% and 1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 935 cr, 96 cr and 538 cr respectively. DIIs were net buyers to the tune of Rs 594 cr.

Rupee depreciated 3 paise to end at 64.01/$.

OUTLOOK

Today morning Asian markets are trading mixed SGX Nifty is suggesting about 15 points higher opening for our market.

In yesterday's report we had mentioned that 8320-8300 is the immediate support area, as 200 DMA as well as a trendline adjoining recent bottoms were placed around 8320 while 8300 was the 38.2% retracement level of the recent 7997-8490 upmove.

Nifty, after falling to 8278 in the initial trade, bounced back to end at 8335, holding 8320-8300 support on closing basis.

Traders would do well to wait for the close below 8300 for taking a fresh negative view. On the way up, immediate hurdle on the hourly chart is placed around 8405 above which 8490, the top made last week, would be the next target to eye.

Coal India, ONGC, Hindalco and NMDC will report their quarterly earnings today.

US EQUITIES PLUNGE ON RISING DOLLAR, RATE HIKE FEAR; EARNINGS DISAPPOINT AT HOME

US EQUITIES PLUNGE ON RISING DOLLAR, RATE HIKE FEAR; EARNINGS DISAPPOINT AT HOME

WORLD MARKETS                             

US indices plunged nearly a percent on the back of renewed strength in the U.S. dollar and mixed data that could strengthen the case for a rate hike.

Dollar index climbed 1.3% to 97.22. Euro traded below $1.09 for the first time since April 28.

Durable goods for April showed a decline of 0.5%, roughly in-line with expectations. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1% last month after an upwardly revised 1.5% increase in March. New home sales for April showed an increase of 6.8% to a seasonally adjusted annual rate of 517,000, up from the consensus 510,000. The S&P/Case-Shiller composite index of 20 metropolitan areas gained 5% in March on a year-over-year basis, matching February's gain and above the forecast of 4.7%. The Conference Board Consumer Confidence report was 95.4 in May, above the revised April read of 94.3.

On the flip side, Markit's Purchasing Managers Index for the services sectors fell for a third straight month in May to 56.4 from April's final read of 57.4.

U.S. Federal Reserve Vice Chairman Stanley Fischer said Tuesday that markets should not be surprised by the timing or pace of rate hikes.

European markets fell between 0.6%-1.6% with DAX leading the tally. Concerns over Greece persisted. The country needs urgent aid to repay a loan due next week to the International Monetary Fund and to pay wages and pensions, its government said on Monday. The Greek finance ministry will hold a teleconference with European officials on Tuesday evening.

Nymex oil plunged 2.8% or $1.7 to $58 a barrel. Gold fell $17 to $1187 an ounce.

AT HOME

After falling nearly six tenth of a percent, benchmark indices recouped some of the lost ground in last hour or so to end lower by about four tenth of a percent. Sensex settled at 27531, down 112 points while Nifty lost 31 points to finish at 8339. BSE mid-cap and small-cap indices lost 0.01% and 0.2% respectively. Except a 0.1% and 0.02% rise in Bankex and Power index respectively, all the sectoral indices ended in red with BSE Oil & Gas and Realty indices leading the tally with losses of 1% and 0.9% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 115 cr, 216 cr and 193 cr respectively. DIIs were net buyers to the tune of Rs 124 cr.

Rupee plunged 41 paise to end at 63.98/$.

Tata Motors reported a 56% decline in consolidated net profit at Rs 1,716.50 crore March quarter as its domestic business continue to drag, while British arm Jaguar Land Rover also witnessed weak demand. Consolidated net revenues rose 3.5% to Rs 67576 cr. Operating profit dropped 15.6% to Rs 8439 cr and margin declined 280 bps to 12.5%. JLR margin dipped 120 bps sequentially to 17.4%. The company skipped dividend for the first time after 10 years.

BHEL reported better-than-estimated 52% fall in net profit at Rs 888 cr. Sales slipped 16% to Rs 12368 cr. Operating margin stood at 11% as against 16.7% y-o-y.

Tech Mahindra reported 39.2% q-o-q fall in net profit at Rs 472 cr. Margins dipped 530 bps to 12.4% as against expectation of 15%. Dollar revenues rose 6.5% q-o-q to 984 mn but stripped off the acquisitions, dollar revenues declined 4.3%. On constant currency basis revenue were down 1.2%.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 40 points lower opening for our market.

In yesterday's report we had mentioned that Nifty had broken immediate support of 8380 and next support to eye is 8320 where the 200 DMA as well as a trendline adjoining recent bottoms on the daily chart is placed.

Nifty, after touching a low of 8320, recovered somewhat to end at 8339.

8320-8300 continues to be immediate support zone where 8320 is the 200 DMA while 8300 is the 38.2% retracement level of the recent 7997-8490 upmove. A breach of 8300 can take Nifty to around 8185, which is the 61.8% retracement level of the 7997-8490 upmove.

On the way up 8410 is the immediate hurdle above which 8490, the top made last week, would be the bigger hurdle to eye.

Traders can go short if Nifty sustains below 8300 with the stop loss of 8410.

8320 NEXT SUPPORT; 8490 IMMEDIATE HURDLE

8320 NEXT SUPPORT; 8490 IMMEDIATE HURDLE

WORLD MARKETS                             

US markets were shut yesterday for Memorial Day.

In Europe, FTSE and DAX were shut while CAC lost 0.5%. Spanish index plunged more than 2% after the ruling People's Party (PP) took a battering in regional and local elections on Sunday, as voters punished Prime Minister Mariano Rajoy for four years of severe spending cuts and a string of corruption scandals. Italy fell 1.7%. Greece tumbled more than 3% as fears of a potential Greek exit from the euro zone remained in the backdrop after the country's interior minister threatened to default on loan repayments due to the International Monetary Fund on Sunday.

AT HOME

After a lower start, benchmark indices extended the fall through the session to end with deep cuts of nearly a percent. Sensex plunged 314 points to settle at 27644 while Nifty finished at 8370, down 89 points. BSE mid-cap and small-cap indices lost 0.08% and 0.2% respectively. Except a 0.1% rise in BSE Oil & Gas index, all the sectoral indices ended in red with Metal and FMCG indices leading the tally, giving away 1.7% and 1.6% respectively.

FIIs net bought stocks and index futures worth Rs 74 cr and 167 cr respectively but net sold stock futures worth Rs 223 cr. DIIs were net buyers to the tune of Rs 17 cr.

Rupee depreciated 4 paise to end at 63.56/$.

OUTLOOK

Today morning Asian markets SGX Nifty is suggesting a flattish start for our market.

We had been advising holding on to trading longs with a trailing stop loss ever since 8333 hurdle was taken out for a target of about 8600.

In yesterday's report we had recommended trailing the stop loss to 8380, which was the immediate support on the hourly chart. Nifty yesterday tumbled 89 points to end at 8370, breaking the 8380 support.

Next support on the way down comes around 8320 where the 200 DMA as well as the trendline adjoining recent bottoms on the daily chart is placed.

On the way up, 8490, the top made last week, is the immediate hurdle, a crossover of which is required for fresh upmove.

Traders are advised to wait for the breach of 8320-8490 range for taking fresh view on Nifty.

Tata Motors, Tech Mahindra and BHEL will report their quarterly earnings today.