NIFTY TUMBLES TO ONE MONTH LOW; KEY EARNINGS, US NONFARM PAYROLL IN FOCUS TODAY

NIFTY TUMBLES TO ONE MONTH LOW; KEY EARNINGS, US NONFARM PAYROLL IN FOCUS TODAY

WORLD MARKETS                             

US indices ended modestly lower yesterday, awaiting Friday's key jobs report that could shed light on the timing of a rate hike.

weekly jobless claims came in at 276,000, above expectations of 262000 estimate. Third-quarter productivity increased at a 1.6% annual rate, while labor costs rose 1.4%.

Nymex oil fell $1.12 or 2.4% to $45.20 a barrel, extending recent losses.

European markets closed mixed with a lower FTSE and Italy and higher DAX and CAC. The Bank of England decided to keep rates on hold with only one member of the 9-member committee dissenting and voting for a rate hike. Sterling fell to a one-week low of $1.5269 against the dollar after the decision.

AT HOME

Benchmark indices plunged a percent in today's trade and closed at the lowest level since 1st October. Sensex settled at 26304, down 249 points while Nifty lost 85 points to finish at 7955. BSE mid-cap and small-cap indices lost 1.5% each. All the BSE sectoral indices ended in red with Realty and Healthcare indices leading the tally, down 2.6% and 2.1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 992 cr, 858 cr and 1072 cr respectively. DIIs were net sellers to the tune of Rs 636 cr.

Rupee depreciated 27 paise to end at 65.745/$.

Exit polls released after the final phase of Bihar assembly election portrayed a mixed picture. One poll predicted a landslide victory for NDA, two others predicted majority for Nitish led Grand Alliance and rest said it will be a close finish.

Union Cabinet yesterday approved financial restructuring package for power distribution companies in select states. The plan, called Ujwal Discom Assurance Yojna (UDAY), will shift 75% of discoms debt burden from them to states' balance sheets and this will be result in interest cost savings to the tune of 3-5 percent. States can sell the balance 25% as state-backed bonds. State government's power bonds will carry interest rates of g-sec plus 50 basis points. Steps the government will take to improve operational efficiency include swapping of coal linkages, monitoring aggregate technical and commercial losses (AT&C) as well as focus on feeder separation and smart metering in states. The government will also moot the topic of quarterly revision of tariffs with state electricity regulators.

Tata Steel's consolidated net profit grew by 22% at Rs 1529 cr, driven majorly by other income. Europe operations disappointed due to sharp deterioration in market condition which reported EBIDTA loss. Consolidated revenue declined 18% to Rs 29305 cr. Consolidated operating profit plunged 50% y-o-y to Rs 1830 cr and margin contracted by 400 bps to 6.2%. The expected figures for operating profit and margin were Rs 2465 cr and 8-8.5% respectively.

Cipla reported lower-than-expected 44% rise in consolidated net profit at Rs 431 cr. Revenue rose 25% to Rs 3452 cr. Operating profit rose 41% to Rs 789 cr and margin expanded by 270 bps to 22.9%. Expected figures were Rs 42% and 212 bps respectively.

OUTLOOK

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

We have maintained our negative bias ever since Nifty broke immediate support of 8230 on 27th October. More recently we had said that 8000-8030 is the important support area as lower band of bollinger on daily chart and 38.2% retracement level of the entire 7540-8336 upmove are placed in this region. We had also said that below 8030, 7940 and 7840, the 50% and 61.8% retracement levels of the 7540-8336 upmove, would be the next downside targets to eye.

Nifty yesterday breached 8000-8030 support area and plunged all the way to 7944 before closing at 7955.

Next support/target to eye on the way down, as mentioned above, is 7840.

Immediate resistance on the hourly chart has moved lower to 8050, with the stop loss of which trading shorts can be held on to.

SBI, Tata Motors, M & M, ONGC, BHEL, PNB and BoB will report their quarterly earnings today.

Also in focus would be US non-farm payroll data for October where addition of 181000 jobs is expected. Unemployment rate is expected to come down to 5% from 5.1%.

Counting for Bihar elections will be held on Sunday.