8460-8300 IS THE IMMEDIATE RANGE; ICICI BANK, L& T EARNINGS IN FOCUS

8460-8300 IS THE IMMEDIATE RANGE; ICICI BANK, L& T EARNINGS IN FOCUS

WORLD MARKETS                             

While Nasdaq gained 0.3%, Dow ended a tad lower and S & P 500 ended flat in yesterday's trade, digesting more earnings and second-quarter GDP.

The US second quarter GDP came in at 2.3%, below estimates of 2.6% growth. First quarter GDP reading was revised to a 0.6% increase from a 0.2% contraction. Weekly jobless claims increased by 12,000 week-over-week, but were below expectations at 267,000.

Dollar index gained about half a percent to settle at 97.49. Nymex oil fell 27 cents to $48.52 a barrel. Gold fell $4.60 to $1089 an ounce.

European markets, except a 1% lower Spain, gained 0.4%-0.6%

AT HOME

After gaining a percent in the morning trade, benchmark indices gave away nearly half of the gains in the choppy noon session to end higher by half a percent on the expiry day of the July derivative series. Sensex settled at 27705, up 142 points while Nifty added 47 points to finish at 8422. BSE mid-cap and small-cap indices gained 0.8% and 0.9% respectively. BSE Realty and FMCG indices soared 3.5% 2.7% respectively, becoming top gainers among the sectoral indices while IT and Teck indices lost 0.8% and 0.5% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 171 cr, 212 cr and 65 cr respectively. DIIs were net buyers to the tune of Rs 500 cr.

Rupee depreciated 13 paise to end at 64.04/$.

Bank of Baroda reported 22.8% fall in quarterly net profit at Rs 1052 cr which was better-than-expected. NII rose 4% to Rs 3460 cr. Gross NPA ratio deteriorated 41 bps q-o-q to 4.13% while Net NPA ratio stood at 2.07%, up 18 bps.

ITC reported lower-than-estimated 3.6% rise in quarterly net profit at Rs 2265 cr while revenue dropped 7.1% to Rs 8588 cr. Operating profit grew by 3.3% to Rs 3386 cr and margin expanded by 400 bps to 39.4%.

Dr Reddy's reported better-than-expected 14% growth in quarterly net profit at Rs 626 cr. Total income rose 7% to Rs 3758 cr. Gross profit margin stood at 61.1%, up 180 bps y-o-y.

Kotak Mahindra Bank reported 26% drop in consolidated net profit for the quarter ended June to Rs 517 cr on account of higher provisioning after the completion of its merger with ING Vysya Bank. Consolidated NII grew 43.2% to Rs 2163 cr.

OUTLOOK

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

In yesterday's report we had mentioned that 8450, the 38.2% retracement level of the recent 8655-8322 fall, is the immediate hurdle, a crossover of which can take Nifty to around 8530, which is the 61.8% retracement level of this downmove.

Yesterday, the benchmark, after touching a high of 8459, eased to end at 8422. A higher opening today would again take the benchmark closer to the high made yesterday. A sustained trading above 8460 would open up the further space till 8530 as mentioned above. On the way down, 8380, the lower level of the gap created by the gap up opening yesterday is the immediate support, below which 8315-8300 would be the important support area.

L & T and ICICI Bank will report their quarterly earnings today.

NIFTY RECOVERS AFTER HOLDING ON TO 8315 SUPPORT

NIFTY RECOVERS AFTER HOLDING ON TO 8315 SUPPORT

WORLD MARKETS                             

US indices gained 0.5%-0.8% yesterday amidst modest recovery in commodities and digesting Fed statement.

The Federal Reserve kept rates unchanged and gave no hint of liftoff coming in the next meeting. The decision on the rates was unanimous. Policymakers said the economy is expanding moderately and made no mention of recent volatility around Greece or China.

Nymex oil rose 81 cents to $48.79 a barrel after the weekly crude inventories showed a greater-than-expected decline. Gold settled down $3.60 at $1,092.60 an ounce.

US pending home sales came in down 1.8% in June from May. Weekly mortgage applications barely moved for the second week in a row, rising just 0.8%.

European markets, except a 0.3% cut in Italy, gained 0.3%-1.2%, with FTSE leading the tally.

Earlier Chinese stocks halted a three-day decline with a 3.5% gain.

AT HOME

Nifty rose half a percent and Sensex gained 0.4% on the penultimate day of the expiry of the July derivative series, breaking four-day losing streak. Sensex settled at 27563, up 104 points while Nifty added 38 points to finish at 8375. BSE mid-cap and small-cap indices gained 0.9% and 0.8% respectively. BSE Capital Goods and IT indices climbed 1.4% and 1.5% respectively, becoming top gainers among the sectoral indices while Consumer Durable and FMCG indices lost 1.9% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 186 cr, 1391 cr and 191 cr respectively. DIIs were net buyers to the tune of Rs 643 cr.

Rupee ended unchanged at 63.91/$.

Yes Bank reported better-than-expected 27.7% rise in quarterly net profit at Rs 551.2 cr. NII surged 42.3% to Rs 1060 cr. Gross NPA ratio rose to 0.46% from 0.41% q-o-q and Net NPA ratio stood at 0.13% Vs 0.12%.

Union Cabinet yesterday approved amendments to the GST Constitutional Amendment Bill and setting up of the Rs 20000 cr National Investment & Infrastructure Fund that will provide equity support to infrastructure financing companies by putting in a small portion while the rest could levered up from other sources.

OUTLOOK

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

For last two sessions we had been mentioning that Nifty has an important support in 8315-8300 area where 8315 is the immediate previous bottom on the daily chart and 8300 is where the lower band of bollinger on the daily chart is placed. Therefore we had advised booking profits in short positions in the vicinity of 8315.

The benchmark, after touching a low of 8322 on Tuesday, recovered to close at 8375 yesterday and is expected to open higher today, giving credence to above mentioned view.

8315-8300 continues to be the support area, a breach of which should be awaited for taking fresh negative view on Nifty. On the way up 8450, the 38.2% retracement level of the recent 8655-8322 fall, is the immediate hurdle, a crossover of which can take Nifty to around 8530, which is the 61.8% retracement level of this downmove.

Traders should concentrate on individual stocks and let the Nifty decide its next course of action.

Kotak Mahindra Bank, BoB, ITC and Dr Reddy will report their quarterly earnings today.

US EQUITIES BREAK FIVE-DAY LOSING STREAK; FED IN FOCUS

US EQUITIES BREAK FIVE-DAY LOSING STREAK; FED IN FOCUS

WORLD MARKETS                             

US indices climbed 1%-1.2% yesterday, breaking a five-day losing streak, on the back of some recovery on oil prices and Chinese stocks, amid mixed earnings and the beginning of the two-day Fed meeting.

Nymex oil gained 59 cents or 1.24% to $47.98 a barrel, breaking four day losing streak.

Earlier, Shanghai Composite closed down 1.7% in a recovery from an intraday decline of as much as 5%. China's securities regulator yesterday said that it had launched an investigation into Monday's selloff, when stocks fell more than 8%.

In economic news, U.S. consumer confidence for July came in at 90.9, missing expectations and posting a decline from June's read of 99.8.  The Case-Shiller 20-city home price index rose 4.9% in May, matching April's pace but missing expectations for a 5.6% increase. The home ownership rate dropped to 63.4%, the lowest level since 1967. The Markit flash services PMI rose slightly from a five-month low, hitting 55.2 in July.

Ford closed up nearly 2% after the firm posted its best quarterly performance since 2000. UPS reported higher second-quarter net profit as improved margins offset a drop in revenue.

European markets gained between 0.8%-2.3% with Italy leading the tally.

AT HOME

Benchmark indices ended lower by nearly a third of a percent after a choppy trade, extending the losing streak to fourth straight day. Sensex settled at 27459, down 102 points while Nifty lost 24 points to finish at 8337. BSE mid-cap and small-cap indices lost 0.2% each. BSE Realty index nosedived 2.7%, becoming top loser among the sectoral indices, followed by 0.9% cut in Healthcare index. Capital Goods index and Bankex were the top gainers, up 0.5% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1376 cr, 120 cr and 407 cr respectively. DIIs were net buyers to the tune of Rs 665 cr.

Rupee appreciated 25 paise to end at 63.91/$.

Maruti reported 56.5% y-o-y jump in first quarter net profit at Rs 1193 cr. Revenue rose 18% to Rs 13425 cr. Profit was slightly below the forecast due to lower other income and higher tax cost while topline was in line. Operational performance was ahead of expectations. Operating margin expanded by 460 bps to 16.3%.

HDFC reported lower-than-expected 1.2% y-o-y rise in net profit at Rs 1316 cr. The numbers are not comparable on year-on-year basis due to delay in getting dividend income from HDFC Bank. Net interest income, the difference between interest earned and interest expended, jumped 16.8% y-o-y to Rs 2,038.5 crore during the quarter, which was slightly ahead of estimates. Net interest margin slipped 20 basis points q-o-q to 3.8%t from Rs 4% but remained unchanged on year-on-year basis.

PNB reported lower-than-expected net profit and NII but improved asset quality. Net Profit fell 48.7% to Rs 721 cr. NII fell 6.3% to Rs 4102 cr. Gross NPA ratio improved to 6.47% from 6.54% q-o-q and net NPA ratio stood at 4.05% as against 4.06%.

Both the houses of the Parliament were adjourned for two days to mourn the death of former President A.P.J. Abdul Kalam.

OUTLOOK

Today morning Asian markets are trading mixed with changes of upto half a percent and SGX Nifty is suggesting a flattish opening for our market.

In yesterday's report we had mentioned that after recent steep fall, Nifty was close to two important supports in the form of immediate previous bottom on the daily chart placed at 8315 and the lower band of bollinger on the daily chart placed around 8300. We therefore had advised booking profit in short positions as Nifty approaches 8315.

The benchmark, after touching a low of 8322, closed at 8337 in yesterday's trade.

We reiterate our view that 8315-8300 is the important support area and traders should wait for the breach of the same before taking fresh negative bet.

US Fed concludes its two-day meeting today. Markets would watch out the policy statement for further clues on the timing of interest rate increase.

Yes Bank will report its quarterly earnings today.

WORLD EQUITIES EXTEND FALL; NIFTY APPROACHES 8315 SUPPORT

WORLD EQUITIES EXTEND FALL; NIFTY APPROACHES 8315 SUPPORT

WORLD MARKETS                             

US indices fell between 0.6%-1% yesterday, with the Dow closing near six-month low, under pressure from an overnight plunge in the Shanghai Composite and a continued decline in commodities, amid a lackluster earnings season.

Shanghai Composite yesterday dropped nearly 8.5% for its largest one-day loss since 2007 on concerns about growth. The China Securities Regulatory Commission said late Monday night that the local government will increase purchases of stocks in an effort to keep the equity market up.

Energy sector was the worst performer in the S&P 500 as oil extended losses, with Nymex oil falling 75 cents to $47.39, the lowest level since March 20. Brent fell $1.15 to $53.47 a barrel. The Thomson Reuters CRB commodities index hit its lowest level in six years. Copper futures fell more than 1.5%. Gold rebounded $11 to $1096 an ounce. Dollar index fell nearly a percent with the euro briefly creeping above $1.11.

US June durable goods data showed an increase of 3.4%, beating expectations slightly.

European markets fell 1.1%-3%. Germany's Ifo survey for July came in above forecasts, indicating business sentiment in the euro zone's largest economy had picked up.

AT HOME

Benchmark indices plunged nearly 2% yesterday amid negative global cues and jitters over a recommendation for stiff norms for participatory notes or P-Notes. Sensex nosedived 551 points to settle at 27561, marking the lowest close since 19th June. Nifty ended at 8361, down 161 points. BSE mid-cap and small-cap indices lost 1.4% and 1.1% respectively. All the BSE sectoral indices ended in red with Capital Goods and Metal indices leading the tally, down 2.8% and 2.3% respectively.

A Supreme Court-appointed Special Investigation Team (SIT) entrusted with the task of suggesting measures to curb black money recommended SEBI should do more to identify real owners of P-notes and restrict their transfer last week.

FIIs net sold stocks, index futures and stock futures worth rs 860 cr, 1414 cr and 799 cr respectively. DIIs were net buyers to the tune of Rs 239 cr.

Rupee depreciated 13 paise to end at 64.16/$.

OUTLOOK

Today morning, Shanghai is down nearly 4%, other Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 40 points lower opening for our market.

In yesterday's report we had clearly mentioned that Nifty had generated sell on the hourly chart and is headed to 8470 below which 8415, the 34 DMA, would be the next support.

The benchmark plunged 161 points to end at 8361, achieving the targets mentioned above and vindicating our view.

After yesterday's fall, Nifty is very close to immediate previous bottom of 8315, a breach of which will negate the higher-top higher-bottom formation on the daily chart. Also the lower band of bollinger on the daily chart is also placed in the vicinity of 8300 which makes 8300-8315 important support area.

Traders are advised to book some profits in short positions in the vicinity of 8315.

Tech Mahindra reported in-line with estimated half a percent q-o-q rise in dollar revenue at USD 989 mn. Rupee revenues rose 2.9% to Rs 6294 cr, profit climbed 43% to Rs 676 cr and were better-than-estimates. EBIT margin declined 26 bps to 12.1%.

Maruti Suzuki, HDFC and PNB will report their quarterly earnings today.