NIFTY ENDS AT 3-WEEK HIGH WHILE RUPEE TUMBLES TO 26-WEEK LOW

NIFTY ENDS AT 3-WEEK HIGH WHILE RUPEE TUMBLES TO 26-WEEK LOW

WORLD MARKETS                             

Dow ended marginally lower while S & P 500 and Nasdaq ended with modest gains on short, light volume Friday session.

Oil tumbled $1.33, or 3.1%, to $41.71 a barrel as the dollar index, which hit a fresh eight-month high, added additional pressure to an oversupplied market. Gold fell 1.2% to $1058 an ounce, its lowest level in nearly six years.

European markets lost upto 0.3% after sharp falls in China's stock markets weighed on sentiment, but losses were muted as the European Central Bank's (ECB) upcoming policy meeting remained in focus. ECB is expected to announce further monetary stimulus measure and possibly cut the bank deposit rate further.

Earlier Shanghai Composite plunged 5.5% after news the China Securities Regulatory Commission launched investigations into local brokerages to crack down on short selling and speculation. Also, profits earned by Chinese industrial companies fell 4.6% in October from a year earlier

For the week Dow lost 0.1%, S & P 500 ended flat while Nasdaq gained 0.4%. European markets gained 0.2%-2% with Italy and Germany leading the tally.

AT HOME

Benchmark indices gained about seven tenth of a percent after a choppy trade to close at the highest level after 6th November. Sensex settled at 26128, up 170 points while Nifty put on 59 points to finish at 7943. BSE mid-cap and small-cap indices gained 0.5% and 0.3% respectively. BSE Bankex climbed 1.9%, becoming top gainer among the sectoral indices, followed by 1.5% each rise in Capital Goods and Finance indices.

FIIs net sold stocks worth Rs -519 cr but net bought index futures and stock futures worth Rs 302 cr and 349 cr respectively. DIIs were net buyers to the tune of Rs 900 cr.

Rupee tumbled 20 paise to end at 66.76/$

For the week, Sensex and Nifty gained 1% and 1.1% respectively, extending the winning streak to second straight week.

Prime Minister Narendra Modi met Congress president Sonia Gandhi and former Prime Minister Mammohan Singh on Friday to end the deadlock over GST. Reports later suggested that the government has indicated that it may agree to the 18% limit on GST and waiver of 1% levy for manufacturing states. However, the government is unlikely to accept a demand by the Congress to change the composition and state quota in the GST council.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 20 points lower opening for our market.

Ever since Nifty broke the immediate hurdle of 7860 on 20th November, we have been working with the target of 34-DMA, which is now placed at 8030. The benchmark has since then moved up and touched a high of 7959 on Friday before closing at 7943.

While 8030 continues to be upside target as well as the important hurdle to eye, 7950, the 38.2% retracement level of the recent 8336-7714 fall, is the immediate hurdle, a crossover of which is required for the further upmove.

Meanwhile, traders can trail the stop loss in trading longs to 7870, where the immediate support on the hourly chart is place.

India's Q2 GDP data will be released today and is expected to show a reading of 7.5% as against 7% in the first quarter and 8.4% in the same quarter last year. GVA is expected to show a reading of 7.5% as against 7.1% in the first quarter.

NIFTY CRAWLS TO TWO-WEEK HIGH; RUPEE TUMBLES TO 11-WEEK LOW

NIFTY CRAWLS TO TWO-WEEK HIGH; RUPEE TUMBLES TO 11-WEEK LOW

WORLD MARKETS                             

US markets were shut yesterday for Thanksgiving holiday.

European markets gained 0.9%-1.4% ahead of Tuesday's ECB meeting where further stimulus measures, to revive inflation and boost growth, are expected.

Nymex oil fell 45 cents or 1.1% to $42.59 a barrel. Brent crude fell 71 cents to $45.46 a barrel.

AT HOME

After a positive start, benchmark indices kept up the positive momentum through rest of the session and finally ended higher by seven tenth of a percent to finish at the highest level since 9th November. Sensex settled at 25959, up 183 points while Nifty rose 52 points to finish at 7884. BSE mid-cap and small-cap indices gained 0.3% and 0.4% respectively. Except a 0.5% and 0.2% cut in BSE Healthcare and Capital Goods indices respectively, all the sectoral indices closed higher with Telecom and Realty indices leading the tally, up 2.7% and 1.8% respectively. 

FIIs net sold stocks, index futures and stock futures worth Rs 398 cr, 307 cr and 745 cr respectively. DIIs were net buyers to the tune of Rs 949 cr.

Rupee depreciated 24 paise to end at over 11-week low of 66.56/$.

Winter session of the Parliament began yesterday. Although, both the houses will get down to business only on Monday as Thursday and Friday have been dedicated to discuss the constitution on the country’s first ever ‘Constitution Day’ on November 26, the Rajya Sabha was adjourned after an obituary reference by chairman M. Hamid Ansari.

Dr Reddy plunged 8.3% after the US Food and Drug Administration (USFDA) released details of the warning letter issued to the company. In a strongly worded letter, the regulator said that several violations are recurrent or represent long-standing failures and it is apparent co has not implement a robust quality system at the sites.

Tata Motors climbed 5.5% after the company owned Jaguar Land Rover (JLR) said that it will double the size of its Engine Manufacturing Centre (EMC) as part of a £450 million expansion programme.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting a flattish start for our market.

For past couple of sessions, we have been advising holding on to trading longs with the stop loss of 7800.

That continues to be the view. On the way up, 7907, the top made last week, is the immediate hurdle, upon crossover of which 8035, where the 34-DMA is placed, would be the next target to eye.

7800-7907 CONTINUES TO BE IMMEDIATE RANGE

7800-7907 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

Dow and S & P 500 ended absolutely flat while Nasdaq gained 0.3% yesterday in low volume trade after a slew of data releases Wednesday, the last full trading day of the holiday week.

October U.S. personal spending rose 0.1%, while personal income rose 0.4%. Durable goods orders topped expectations by rising 3% in October. Weekly jobless claims fell more than expected to 260,000. Weekly mortgage applications fell 3.2%, while the FHFA home price index showed a 0.8% rise in September from August. October new home sales showed a gain of 10.7%. The University of Michigan's final read on November consumer sentiment came in at 91.3, up slightly from October's final read of 90.0.

Nymex oil rose 17 cents or 0.4% to $43.04 a barrel after Baker Hughes said the weekly U.S. oil rig count dropped 9 for the week. U.S. government reported weekly crude oil inventories rose less than suggested by an earlier industry reading.

Greater expectations of stimulus sent the euro to a low of $1.0566 against the dollar, its lowest level since April. The U.S. dollar hit a high of 100.17, its highest level since March.

European markets soared 1%-2.2% after some encouraging corporate results helped lift sentiment.

AT HOME

It was yet another rangebound but choppy trading session after which benchmark indices ended a fifth of a percent down ahead of the expiry of the November derivative series. Sensex settled at 25776, down 44 points while Nifty lost 18 points to finish at 7832. BSE mid-cap and small-cap indices once again outperformed, rising 0.1% and 0.3% respectively. BSE Capital Goods and IT indices were the top losers among the sectoral indices, giving away 1.2% and 0.7% respectively while Realty and Energy indices were the top gainers, up 1.3% and 1.1% respectively.

FIIs net sold stocks and stock futures worth Rs 540 cr and 141 cr respectively but net bought stock futures worth Rs 381 cr. DIIs were net buyers to the tune of Rs 532 cr.

Rupee appreciated 15 paise to end at 66.33/$.

OUTLOOK

Today morning Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 20 points higher opening for our market.

On Tuesday, we had recommended holding on to trading longs with the stop loss of 7800. The benchmark, after touching a high of 7870, slipped to end at 7832, but is agains slated to open higher today.

7800 continues to be immediate support, with the stop loss of which trading longs should be held on to. 7907, the top made on Friday, continues to be immediate hurdle, above which, 34-DMA, placed around 8043, would be the next target to eye.

Winter session of the Parliament begins today. First two days will be dedicated to discussion on Constitution and its maker B R Ambedkar on his 125th birth anniversary.  GST will be the key bill on the agenda along with Land Acquisition Bill.

U.S. markets will remain closed today for Thanksgiving.

7800-7907 IS THE IMMEDIATE RANGE

7800-7907 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

After a positive start, US indices reversed to end marginally lower.

The U.S. dollar index briefly hit 100 for the first time since March, with the euro temporarily dipping below $1.06 and the yen at 122.89 yen against the greenback in the close.

US existing home sales showed a decline of 3.4% in October. The Chicago Fed National Activity Index was minus 0.04 in October, up from minus 0.29 in September.

Nymex oil fell 15 cents or 0.4% to $41.75 a barrel while Brent gained 19 cents or 0.43% to $44.85 a barrel. Saudi Arabia, one of the largest producers of oil, said in a statement it was ready to work with other oil producing and exporting nations to stabilize prices.

European markets, except a 0.7% higher Italy, ended with cuts of upto half a percent under some pressure from fluctuations in oil prices and declines in copper, which hit a multi-year low.

On the data front, flash figures for the euro zone composite purchasing managers' index (PMI) for November came in at 54.4, hitting its highest level since May 2011.

Gold fell $10 to $1067 an ounce.

AT HOME

Benchmark indices ended marginally lower after a rangebound but choppy trading session. Sensex lost 49 points to settle at 25819 while Nifty finished at 7849, down 7 points. BSE mid-cap and small-cap indices however gained 0.4% each. BSE Consumer Durable and Realty indices gained the most among the sectoral indices, rising 1.1% and 0.9% respectively. Metal and FMCG indices were the top losers, down 1.2% each.

FIIs net sold stocks worth Rs 35 cr but net bought index futures and stock futures worth Rs 403 cr and 289 cr respectively. DIIs were net buyers to the tune of Rs 90 cr.

Rupee tumbled 29 paise to end at 66.47/$, a near two-month low.

GAIL soared 5% after the reports that RasGas of Qatar has agreed to waive USD 1 billion penalty on India for breaking a long-term LNG contract, and has also consented to change the pricing formula to reflect the slump in global energy rates.

Hindalco and Vedanta tumbled 3.6% and 3% respectively after the BSE's announcement that both companies will shift out of the benchmark Sensex from December 21.

OUTLOOK

Today morning Asian markets are trading with modest cuts and SGX Nifty is suggesting about 15 points lower opening for our market.

In yesterday's report we had mentioned that Nifty is in a buy mode on the hourly chart and traders should stay long with the stop loss of 7800.

That continues to be the view. A sustained trading below 7800 will generate a sell on the hourly chart and 7700 would be the next downside target if that happens.

7907, the top made on Friday, is the immediate hurdle above which 8050, where the 34-DMA is placed would be the major hurdle to eye.

STAY LONG WITH THE STOP LOSS OF 7800

STAY LONG WITH THE STOP LOSS OF 7800

WORLD MARKETS                             

US indices gained 0.4%-0.6% on Friday, helped by gains in retail stocks, as investors looked to central banker comments on the trajectory of monetary policy.

Nike jumped more than 5% after the company increased its dividend by 14%, declared a 2-for-1 stock split, and announced a $12 billion stock buyback program.

Nymex oil fell 15 cents or 0.4% to $40.39 a barrel.

European Central Bank President Mario Draghi said the ECB stands ready to "do what (it) must to raise inflation as quickly as possible" if it decides current policy isn't stimulating the sluggish euro zone economy.

European markets ended mixed with modest changes.

For the week, US indices gained 3.3%-3.6% with the S & P 500 registering best week since the one ended October 24, 2014. European markets rose 1.4%-3.8%.

AT HOME

After rising nearly eight tenth of a percent, benchmark indices gave away most of the gains in last hour to end just marginally higher. Sensex settled at 25868, up 27 points while Nifty added 14 points to finish at 7857. BSE mid-cap and small-cap indices gained 0.9% and 0.6% respectively. BSE Oil & Gas index climbed 2%, becoming top gainer among the sectoral indices, followed by 0.8% rise in Capital Goods index. FMCG and Realty indices were the top losers, down 0.8% and 0.3% respectively.

FIIs net sold stocks worth Rs 94 cr but net bought index futures and stock futures worth Rs 261 cr and 136 cr respectively. DIIs were net buyers to the tune of Rs 610 cr.

Rupee depreciated 1 paise to end at 66.18/$.

For the week, Sensex and Nifty gained 1% and 1.2% respectively, breaking three-week losing streak.

An inter-ministerial committee cleared as many as 32 proposals for setting up manufacturing units in defence and explosive sectors which includes conditional approval to eight subsidiaries of Reliance Infra.

Shares of gas stocks such as GAIL, Petronet LNG, GSPL, IGL and Gujarat Gas rallied sharply following news reports that Ras Gas company has agreed to modify long term contract with Petronet, which will now be linked at 3 months of Brent from earlier 12 months, enabling cost of gas to drop below USD 7/mmbtu from USD 12.5/mmbtu. Reports further suggested that Qatar has agreed not to levy any take or pay liability for 2015 lower off-take, which was estimated at USD 1.5 billion..

In a major blow to India Inc, the Central Board of Direct Taxes (CBDT) on Friday released a roadmap for phasing out corporate tax exemptions. It will phase out profit and investment-linked and area based tax deductions for companies. The CBDT has also said it will not make any modifications to sunset date in income tax and there will be no weighted tax deduction from FY18.

OUTLOOK

US Fed said that it will hold an unscheduled meeting on Monday to review the advance and discount interest rates charged to commercial banks and other financial institutions.

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points higher opening for our market.

In Friday's trade, Nifty crossed immediate hurdle of 7860 and surged all the way to 7907, but witnessed a severe profit booking in late noon trade to end at 7857.

Nevertheless, the index has generated a buy on the hourly chart and traders can continue to hold long positions with the immediate support of 7800.

On the upside, 7907, the top made on Friday, is the immediate hurdle, upon crossover of which, 34-DMA, placed at 8055, would be the next target.

NIFTY REBOUNDS FROM THE VICINITY OF 7690 SUPPORT; 7860 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 7690 SUPPORT; 7860 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices ended marginally lower yesterday as investors eyed some corporate news and sought further indications of support for a December rate hike from data and Fed speakers.

Health care closed down 1.6% as the greatest laggard in the S&P 500, while utilities gained about 1% to lead advancers. Energy was the second-worst performer, off nearly 1.3%.

On the data front, initial jobless claims came in at 271,000. The Philadelphia Fed Manufacturing survey's diffusion index for current activity came in for November at 1.9, its first positive reading in three months. U.S. October leading indicators rose 0.6%, slightly more than expected.

Nymex oil fell 21 cents or 0.5% to $40.54 a barrel.

European markets gained between 0.2%-1.2%. The European Central Bank meeting minutes showed the central bank considered adding more stimulus.

Earlier, the Bank of Japan kept monetary policy unchanged. The People's Bank of China said it would add yet more stimulus to the country's economy by lowering the interest rates on the loans it gives to banks.

AT HOME

Benchmark indices soared nearly a percent and half in today's trade, recouping all the losses suffered in yesterday's session. Sensex settled at 25842, up 359 points while Nifty climbed 111 points to finish at 7843. BSE mid-cap and small-cap indices gained 1.2% and 1.3% respectively. Except a 0.1% cut in BSE Healthcare index, all the sectoral indices ended in green with IT and Teck indices leading the tally, up 1.8% each.

FIIs net sold stocks worth Rs 343 cr but net bought index futures and stock futures worth Rs 23 cr and 390 cr respectively. DIIs were net buyers to the tune of Rs 234 cr.

Rupee appreciated 12 paise to end at 66.175/$.

7th Pay Commission recommended a 23.55% pay hike for the Central government employees. Total financial impact in FY 2016-17 is likely to be Rs 1.02 lac cr which is 0.65% of GDP.

OUTLOOK

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

For past three sessions we have been mentioning that 7860-7690 is the immediate range, a crossover of which, on either side, is required to take a fresh directional view on Nifty. The benchmark, after plunging to 7725 on Wednesday, rebounded yesterday to end at 7843.

7860 continues to be immediate hurdle to eye, a sustained trading above which will generate a buy on the hourly chart and would open up the space for the further upside till about 8050, where the 34-DMA is placed.

7690-7860 CONTINUES TO BE IMMEDIATE RANGE

7690-7860 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

US indices soared 1.4%-1.8% yesterday, reacting positively to the release of the Federal Reserve's October meeting minutes that signaled a likely interest rate hike in December.

Minutes showed most members felt that economic conditions for a rate hike will be met by the next time the committee meets in December. This was despite continued volatility being seen across global markets as a result of geopolitical issues, dampened commodity prices and an economic slowdown in China

U.S. housing starts for October fell 11%, while building permits rose 4.1%. Single-family building permits rose 2.4% to their highest level since December 2007.

Apple climbed 3.2% after Goldman released a note saying the company's shares will rise 43% in the next 12 months.

Nymex oil rose 8 cents or 0.2% to $40.75 a barrel after dipping below $40 a barrel for the first time since August.

European markets, except a 0.2% higher FTSE, lost upto a percent as further security scares after the Paris attacks last Friday weighed on sentiment.

Yesterday, seven people were arrested and at least two suspects died following police raids in the Paris suburb of Saint-Denis. Also, Air France said that two Paris-bound flights that had been diverted following anonymous threats had landed safely.

AT HOME

Benchmark indices nosedived nearly a percent and half yesterday close at the lowest level since 8th September. Sensex settled at 25482, down 382 points while Nifty lost 106 points to finish at 7732. BSE mid-cap and small-cap indices lost 0.7% each. Except a 0.3% rise in BSE Consumer Durable index, all the sectoral indices ended in red with IT index and Bankex leading the tally, down 2.3% and 2% respectively.

FIIs net sold stocks worth Rs 768 cr but net bought index futures and stock futures worth Rs 139 cr and 254 cr respectively. DIIs were net sellers to the tune of Rs 759 cr.

Rupee depreciated 27 paise to end at 66.29/$.

Government yesterday cleared a 10% disinvestment in the Coal India Ltd, besides approving an initial public offer (IPO) for Cochin Shipyard.

The government also restored a 3% interest subvention in a bid to arrest falling exports. Financial incentive for sugarcane farmers in the form of subsidy of Rs 4.50 per quintal on sugar for farmers was also approved.

The government will also address the problems of at least 34 road projects that are currently stalled. All projects that were not stuck due to developers’ problems would be re-started again. Besides, to meet the rising compensation of land for road projects, the government will divide the road cost into civil construction and capital.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 60 points higher opening for our market.

In yesterday's report we had mentioned that 7860 continues to be immediate hurdle, a sustained trading above which is required for the further upmove. We had also said that on the way down, 7690, the bottom made in late September, is the immediate support, upon breach of which 7540, the bottom made in early September, would be the next downside target.

The benchmark plunged 106 points yesterday to end at 7732 but is set for a gap up opening today.

7690-7860 continues to be immediate range, a crossover of which, on either side will give further direction.

NIFTY RETREATS FROM 7860 HURDLE

NIFTY RETREATS FROM 7860 HURDLE

WORLD MARKETS                             

Dow and Nasdaq ended marginally higher while S & P 500 lost 0.2% as some encouraging earnings reports offset pressure from declines in oil prices and continued geopolitical concerns.

Home Depot and Wal-Mart surged on good quarterly results.

Nymex oil fell $1.07 or 2.6% to $40.67 a barrel.

In economic news, the consumer price index rose 0.2% in October, matching estimates. Core CPI, which takes out food and energy costs, also gained 0.2%. Home builder confidence fell more than expected to 62 in November. Industrial production for October showed a second-straight month of decline with a 0.2% drop, missing expectations for a slight rise.

During the afternoon U.S. trading session, two stadiums in Germany were evacuated at short notice due to the serious threat of an attack.

Gold fell $15 to $1069 an ounce.

European markets soared 2%-2.8%. Auto stocks gained after data showed European auto sales rose 2.7% y-o-y in October, the 26th straight month of growth. Greece reached an agreement with its lenders on financial reforms, removing a major obstacle holding up fresh bailout loans for the cash-starved country.

AT HOME

Benchmark indices ended higher by about four tenth of a percent after a choppy session. Sensex rose 104 points to settle at 25864 while Nifty ended at 7838, up 31 points. BSE mid-cap and small-cap indices gained 0.3% and 0.5% respectively. BSE FMCG index climbed 2.2%, becoming top gainer among the sectoral indices, followed by 1% gain in Metal index. Consumer Durable and IT indices were the top losers, down 0.4% and 0.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 492 cr, 139 cr and 181 cr respectively. DIIs were net buyers to the tune of Rs 783 cr.

Rupee depreciated 3 paise to end at 66.0225/$.

Infosys fell 2%, after the company, in a conference call on Monday, warned investors of weaker margins in second half of current fiscal.

OUTLOOK

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

In yesterday's report we had mentioned that 7860 is the immediate hurdle on the hourly chart, a crossover of which is required for the further upmove.

The benchmark, after exactly touching a high of 7860, reversed to end at 7838.

7860 continues to be immediate hurdle, a sustained trading above which is required for the further upmove. 8060, where the 34-DMA is placed, would be the next upside target after crossover of 7860.

On the way down, 7690, the bottom made in late September, is the immediate support, upon breach of which 7540, the bottom made in early September, would be the next downside target.

7860-7690 ARE IMMEDIATE RESISTANCE-SUPPORT LEVELS

7860-7690 ARE IMMEDIATE RESISTANCE-SUPPORT LEVELS

WORLD MARKETS                             

US indices soared 1.2%-1.5%, helped by a sharp jump in oil prices and as investors brushed off jitters related to last Friday's deadly terror attacks in Paris.

Energy stocks gained the most as Nymex oil reversed three-straight days of declines to settle up $1 or 2.45%, at $41.74 a barrel.

November Empire Manufacturing index came in at minus 10.7 for a fourth-straight month of contraction.

European markets ended mixed with modest changes. Final reading on October Eurozone inflation came in at 0.1%, up from an initial reading of zero.

Earlier, Hang Seng and Nikkei both closed down more than 1%, while the Shanghai composite ended about 0.7% higher.

AT HOME

After falling more than half a percent in the initial trade, benchmark indices rallied more than a percent from the bottom of the day to end higher by nearly six tenth of a percent. Sensex settled at 25760, up 150 points while Nifty rose 44 points to finish at 7807. BSE mid-cap and small-cap indices gained 0.2% and 0.5% respectively. Bankex and Capital Goods index gained 1.5% and and 1.1% respectively, becoming top gainers among the sectoral indices while IT and Teck indices lost 1% and 0.9% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 1051 cr, 646 cr and 358 cr respectively. DIIs were net buyers to the tune of Rs 662 cr.

Rupee appreciated 10 paise to end at 65.995/$.

India's wholesale price inflation stood at negative 3.81% in October as against negative 4.54% in September. This was the 12th straight month of deflation for wholesale prices.

India's exports fell 17.5% y-o-y to $21.3 bn in October while imports shrank 21.2% to $31.1 bn, leaving a trade deficit of $9.8 bn as against $10.48 in September.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-2% and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that 7690, the bottom made on 29th September, is the next downside target to eye below which 7540, the bottom made in September would be the next major support.

The benchmark, after touching a low of 7714, rebounded smartly to end at 7807.

After today's gap up opening, Nifty would be closer to the immediate hurdle of 7860, a crossover of which would generate a buy on the hourly chart and would open up the further upside till about 8060, where the 34-DMA is placed.

Traders are advised to keep a stop loss of 7860 in short positions.

7690, 7540 NEXT DOWNSIDE TARGETS; TRAIL STOP LOSS TO 7870

7690, 7540 NEXT DOWNSIDE TARGETS; TRAIL STOP LOSS TO 7870

WORLD MARKETS                             

US indices tumbled 1.1%-2.5% on Friday, pressured by a continued decline in oil prices, a sell-off in tech firms and soft reports on the health of the consumer. 

October retail sales showed an increase of 0.1%, below expectations of a 0.3% rise. The producer price index for October fell 0.4%, after falling 0.5% the previous month. The preliminary read on November consumer sentiment hit 93.1, topping expectations.

Nymex oil fell 2.4% to $40.74 a barrel.

Apple fell nearly 3%.

European markets saw cuts of upto a percent with FTSE and CAC leading the tally. Eurozone GDP grew 0.3% q-o-q in the third quarter, below forecasts for a 0.4% expansion.

For the week, US indices plunged 3.6%-4.3%, breaking 6-week winning streak. European markets fell 2.6%-3.7%.

AT HOME

Sensex and Nifty fell 1% and 0.8% respectively on the first trading day of the new Samvat to close at the lowest level since 8th September. Sensex settled at 25611, down 256 points while Nifty lost 63 points to finish at 7762. BSE mid-cap and small-cap indices lost 1.4% and 0.8% respectively. Except a 0.7% and 0.2% gain in BSE Metal and Consumer Durable indices respectively, all the sectoral indices ended in red with Capital Goods Auto indices leading the tally, down 2% and 1.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 747 cr, 1250 cr and 343 cr respectively. DIIs were net buyers to the tune of rs 71 cr.

Rupee appreciated 22 paise to end at 66.095/$.

For the week, Sensex and Nifty lost 2.4% each.

OUTLOOK

133 peiple were killed in a brutal terrorist attacks in Paris across seven location on Friday. ISIS has claimed responsibility for the attack.

Japan's economy shrank an annualised 0.8% in the July-September quarter, worse than the expected 0.2% contraction and following a 1.2% fall in the preceding quarter.

Today morning Asian markets are trading with cuts of 0.5%-1.5% and SGX Nifty is suggesting about 50 points lower opening for our market.

Nifty has been on bear voyage and has been achieving the downside target one-by-one. Just to reiterate, when initial support level of 8230 was broken, we had given a downside target of 8030. Below 8030, 7840 was the next big target, which was the 61.8% retracement level of the entire 7540-8336 upmove. Last week, the benchmark even broke the 7840, which has opened up the possibility of the retest of the 7540 bottom.

Before 7540, 7690, the bottom made on 29th September, would be the immediate target to eye.

Immediate resistance on the hourly chart has moved lower to 7870, with the stop loss of which short positions should be held on to.

WPI for October would be released today and is expected to show a reading of -3.82% as against -4.54% in September. Core WPI is expected at -1.87% as against -1.93%.

NIFTY BREAKS 7840 SUPPORT; STAY SHORT WITH THE STOP LOSS OF 7940

NIFTY BREAKS 7840 SUPPORT; STAY SHORT WITH THE STOP LOSS OF 7940

WORLD MARKETS                             

US indices plunged 1.2% -1.4% yesterday on the back of sharp decline in oil prices and several speeches from Fed officials that hinted at an interest-rate hike next month.

Nymex oil fell $1.2 or 2.8% to $41.75 a barrel, after the U.S. government reported a stockpile build four times above market expectations.

Weekly jobless claims came in at 276,000, unchanged week-over-week, but higher than the expected 270,000

European markets tumbled 1.1%-2.4%. ECB President Draghi warned that signs of a sustained turnaround in core inflation had weakened and reiterated that the bank was looking at a "range of instruments available in case more accommodation should be seen as necessary. The euro fell to aound $1.07 after his remarks.

Gold settled down $4 to $1081 an ounce.

AT HOME

Benchmark indices gained about half a percent on the Muhurat trading session on Wednesday. Sensex settled at 25867, up 124 points while Nifty rose 42 points to finish at 7825.

On Tuesday, after opening lower by about half a percent, benchmark indices saw a sustained downward move through the session to end with deep cuts of a percent and half. Sensex settled at 25743, down 378 points while Nifty lost 132 points to finish at 7783.

FIIs net sold stocks, index futures and stock futures worth Rs 661 cr, 1081 cr and 258 cr respectively. DIIs were net buyers to the tune of Rs 658 cr.

Rupee appreciated 13 paise to end at 66.31/$.

Government on Tuesday announced FDI and liberalisation in 15 sectors, including agriculture, mining plantation, defence, broadcasting, aviation, construction, manufacturing, private banking sector, cash and carry wholesale trading, among others.

India's industrial output grew at a slower-than-expected pace of 3.6% in September as against upwardly revised 6.3% growth registered in August. Also, the retail inflation climbed to a four-month high of 5% in October as against 4.41% in September as food prices escalated on supply deficiency in pulses.

OUTLOOK

Today morning Asian markets are trading with cuts of upto 2% with Hang Seng leading the tally and SGX Nifty is suggesting about 60 points lower opening for our market.

Just to reiterate, we have been bearish on Nifty ever since immediate support of 8230 was breached on 26th October. We were working with an initial downside target of 8030, a breach of which, we had said, will be a sell signal on the daily chart and can take Nifty to 7840. Off late, we had said that a breach of 7840, which is the 61.8% retracement level of the entire 7540-8336 upmove, would open up the possibility of the retest of the 7540 bottom.

The benchmark, on Tuesday, plunged to 7783, breaching 7840 level decisively.

We are now working with the downside target of 7540 as mentioned above.

Immediate resistance on the hourly chart has moved lower to 7940, with the stop loss of which short positions should be held on to.

Coal India will report its quarterly earnings today.

NIFTY ACHIEVES 7840 TARGET; STAY SHORT WITH THE STOP LOSS OF 8020

NIFTY ACHIEVES 7840 TARGET; STAY SHORT WITH THE STOP LOSS OF 8020

WORLD MARKETS                             

US indices plunged a percent, weighed down by an increasing possibility of interest rate hike in December and weak trade data from China.

Nymex oil fell 1% to $43.87 a barrel, extending losses for a fourth straight day. Copper hit a six-week low.

European markets fell 1%-1.9%. German exports rose 2.6% month-on-month in September while imports were up 3.6%.

AT HOME

After a big gap down opening of more than 2% on the back of unexpected Bihar election results, benchmark indices recouped quite a bit of the lost ground through the session to end lower by just half a percent. Sensex settled at 26121, down 144 points while Nifty lost 39 points to finish at 7915. BSE mi-cap and small-cap indices in fact ended with gains of 0.4% and 0.8% respectively. BSE Consumer Durable and Auto indices gained the most among the sectoral indices, rising 2.2% and 1.2% respectively while Realty and Healthcare indices tumbled 2.2% and 1.3% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 861 cr, 1485 cr and 187 cr respectively. DIIs were net buyers to the tune of Rs 621 cr.

Rupee tumbled 68 paise to end at 66.4375/$.

BPCL reported 57% q-o-q fall in net profit at Rs 1018 cr. Revenue fell 11% q-o-q to Rs 46476 cr. Other income shot up 108% to Rs 686 cr.

Tata Power reported a consolidated net profit of Rs 247 cr against loss of Rs 78 cr on strong operational performance. Revenue rose 11% to Rs 9541 cr. Operating profit grew 45% to Rs 2461 cr and margin expanded by 564 bps to 25.8%.

Winter Session of Parliament will begin from November 26.

OUTLOOK

China's October CPI has come in at 1.3%, missing the estimate of 1.5%. PPI has come in at -5.9%, the expected figure being -5.8%.

Asian markets are trading with cuts in the vicinity of a percent and SGX Nifty is suggesting about 60 points lower opening for our market.

Readers would recall that ever since Nifty broke 38.2% retracement level as well as the lower band of bollinger placed at 8030, we had been working with downside target of 7840, which is the 61.8% retracement level of the entire 7540-8336 upmove.

The benchmark opened with a big gap down and touched a low of 7772 in the initial trade before recovering quite a bit to close at 7915, achieving the 7840 target mentioned above and vindicating our view. 

A breach of 7840, on closing basis, would open up the possibility of the retesting of the 7540 bottom made in early September.

Immediate resistance on the hourly chart is placed at 8020, with the stop loss of which trading shorts should be held on to.

Hindalco will report its quarterly earnings today.

NIFTY SET TO ACHIEVE 7840 TARGET

NIFTY SET TO ACHIEVE 7840 TARGET

WORLD MARKETS                             

While S & P 500 ended flat, Dow and Nasdaq gained 0.3% and 0.4% respectively on Friday after a better-than-expected October jobs report increased confidence in the likelihood of a December rate hike.

The October report showed the addition of 271,000 jobs, beating expectations of about 180,000, with the unemployment rate ticking lower to 5%. Average hourly earnings increased 9 cents, for an annualized increase of 2.5%.

Dollar index gained more than a percent and the euro fell below $1.08. Nymex oil fell 2% to $44.29 a barrel. Gold plunged $16 to $1088 an ounce.

European markets, except a modestly lower FTSE, gained upto 1.4%.

For the week, US indices gained 1%-1.8%, their sixth-straight week of gains. European markets, except a 0.1% lower FTSE, gained 0.4%-1.8%.

AT HOME

Benchmark indices ended marginally lower after a rangebound but choppy trading session. Sensex settled at 26265, down 39 points while Nifty lost 1 point to finish at 7954. BSE mid-cap and small-cap indices tell 0.4% and 0.6% respectively. BSE Healthcare index tumbled 2.8%, becoming top loser among the sectoral indices, followed by 1% cut in Power index. IT and Teck indices were the top gainers, up 0.8% and 0.7% respectively.

FIIs net bought stocks worth Rs 219 cr but net sold index futures and stock futures worth Rs 649 cr and 435 cr respectively. DIIs were net sellers to the tune of Rs 39 cr.

Rupee depreciated 1 paise to end at 65.755/$.

For the week, Sensex and Nifty lost 1.5% and 1.4% respectively, extending the losing streak to second straight week.

Government has decided to impose with effect from 15th November 2015, a Swachh Bharat Cess at the rate of 0.5% on all services which are presently liable to service tax.

ONGC reported better-than-expected 11% dip in net profit at Rs 4842 cr. Revenue slipped 9.4% to Rs 20679 cr. Operating profit dropped 17% q-o-q to Rs 8775 cr and margin contracted 400 bps to 42.4%. EBIDTA was lower-than-expected.

Dr Reddy nosedived after receiving a warning letter from USFDA relating to its API manufacturing facilities at Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as Oncology Formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh.

SBI reported better-than-expected 25% growth in net profit at Rs 3879 cr. NII rose 7.4% to Rs 14252 cr. Gross NPA ratio improved to 4.15% from 4.29% q-o-q and net NPA ratio improved to 2.14% from 2.24%.

PNB reported lower-than-expected 8% rise in net profit at Rs 621 cr. NII grew at better-than-estimated 4.1% to Rs 4322 cr. Gross NPA ratio improved 11 bps q-o-q to 6.36% and net NPA ratio improved 6 bps to 3.99%.

BoB's net profit plunged 89% to Rs 124 cr, impacted by higher provisions and slippages. NII fell 4.6% to Rs 3244 cr. Gross NPA ratio deteriorated 143 bps q-o-q to 5.56% and net NPA ratio rose 101 bps to 3.08%.

BHEL posted a loss of Rs 205 cr against a profit of Rs 125 cr in corresponding quarter of last fiscal. Revenue declined 3.4% to Rs 5938 cr. Bottomline figure was worse-than-expected but the topline beat estimates. At operating level, loss stood at Rs 474 cr. Margin stood at negative 8% compared to 4.7% y-o-y.

M & M reported in-line with estimated 2.4% dip in net profit at Rs 924 cr. Revenue was better-than-expected at Rs 9245 cr, down 1.8% y-o-y. Operating profit rose 1.7% to Rs 1026 cr and margin expanded by 40 bps to 11.1%. Expected figures were 3.5% and 110 bps respectively.  

Tata Motors posted a loss of Rs 430 cr as against profit of Rs 3291 cr in year-ago period, hit by charge of Rs 2493 cr on account of cars damage in Tianjin port explosion. Consolidated revenues stood at Rs 61318 cr as against Rs 60641 cr. JLR margins stood at 12.2%, down from 19.4% y-o-y.

OUTLOOK

In an unexpected development, Mahagathbandhan, led by Nitishkumar and Lalu Prasa Yadav, saw a landslide victory by securing 178 out of 243 seat Bihar assembly. BJP led NDA won just 58 seats.

Data over the weekend showed China's October exports fell 6.9% y-o-y, dropping for a fourth month, while imports tumbled 18.8%, resulting in a record high trade surplus of $61.64 bn.

Today morning Asian markets are trading mixed with modest changes but SGX Nifty is suggesting about 130 points lower opening for our market.

Readers would recall that we have been bearish on Nifty ever since immediate support of 8230 was breached on 27th October. Subsequently, we had also said that some important supports are placed in the vicinity of 8030, a breach of which can take Nifty to around 7840, where the 61.8% retracement level of the entire 7540-8336 upmove is placed. We had also said that a breach of 7840 would open up the possibility of retest of 7540 bottom.

A big gap down opening would see Nifty open around 7825, which will achieve the 7840 target and vindicate our view.

As mentioned above, a sustained trading below 7840 would open up the possibility of retest of 7540 bottom.