NIFTY MARCHES TOWARDS 8243 TARGET; GDP DATA IN FOCUS

NIFTY MARCHES TOWARDS 8243 TARGET; GDP DATA IN FOCUS

WORLD MARKETS                             

US markets were shut yesterday for the Memorial Day holiday.

European markets gained upto 0.6% with DAX hitting one month high. German import prices in April fell 6.6% year-on-year, faster than the 6.2% forecast. France's economy grew by 0.6% in the first quarter, faster than the initial 0.5% forecast.

Brent crude futures rose 0.9% to $49.76 barrel while Nymex oil traded at $49.63, up 30 cents.

AT HOME

Benchmark indices gained about three tenth of a percent, extending the winning streak to fifth straight day and closing at eight month high. Sensex gained 72 points to settle at 26726 while Nifty finished at 8178, up 22 points. BSE mid-cap and small-cap indices gained 0.4% each. BSE Metal and IT indices climbed 2.3% and 1.3% respectively, becoming top gainers among the sectoral indices while Realty and Oil & Gas indices were the top losers, down 1% and 0.4% respectively.

FIIs net bought stocks and index futures worth Rs 356 cr and 556 cr respectively but net sold stock futures worth Rs 378 cr. DIIs were net sellers to the tune of Rs 211 cr.

Rupee depreciated 13 paise to end at 67.16/$.

M & M missed expectations on profit & operational front but revenue was ahead of estimates. Profit rose 6% to Rs 584 cr while revenue grew 14.5% to Rs 10801 cr. Operating profit was up 16.4% at Rs 1049 cr and margin expanded by 30 bps to 9.7%.

Tata Motors posted three-fold or 201% rise in its Jan-March consolidated net profit at Rs 5177 cr driven by strong performance of JLR and robust volume growth of heavy and medium commercial vehicles. Sales were up 19% at Rs 79926 cr. JLR margins improved to 16.2% from 14.4%. Profit of JLR’s China JV more than doubled.

Sun Pharma reported lower-than-expected results. Revenue rose 25% to Rs 7634 cr. Profit was up 92% to Rs 1713 cr. Operating margin stood at 33%. The company said it will consider buyback on 23rd June.

OUTLOOK

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

Nifty yesterday touched a high of 8200 before closing at 8178, moving towards the 8243 target, which is the 61.8% retracement level of the entire 9119-6825 fall.

8243 continues to be the upside target as well as the hurdle to eye. 8015, the 38.2% retracement level of the recent 7716-8200 upmove, is the immediate support with the stop-loss of which trading longs can be held on to. However traders

India's GDP/GVA data for Q4 as well as FY16 will be released today. FY16 as well as Q4 GVA and GDP are expected to have grown at 7.3% and 7.6% respectively.

NIFTY ACHIEVES 8150 TARGET; HEADED TO 8243

NIFTY ACHIEVES 8150 TARGET; HEADED TO 8243

WORLD MARKETS                             

US indices gained 0.2%-0.6% on Friday after Federal Reserve Chair Janet Yellen said an interest rate hike in the next few months would probably be appropriate.

Speaking at Harvard University, Yellen said she believed growth and the strengthening of the labor market would continue, and in that case, "probably in the coming months such a move would be appropriate."

University of Michigan's consumer sentiment index stood at 94.7 in May, below expectations but up from 89 in April. The second revision to U.S. first-quarter GDP came in at 0.8%, a touch below expectations although up from the advance read.

US oil settled down 15 cents or 0.3% at $49.33 a barrel. The U.S. oil rig count showed a decline of 2 in the last week, for a drop of 330 year-over-year, Baker Hughes said.

Dollar index gained 0.6% to close at 95.70, its highest since March 29.

European markets, except a 0.2% lower Italy, ended modestly higher.

Earlier, China reported a slowdown in industrial profits, with 4.2% year-over-year growth in April versus 11.1% in March.

Group of Seven (G-7) country leaders met in Japan and expressed concern on Friday about risks to the world economy, including weak growth. In a statement after the two-day summit, the leaders committed to avoiding "competitive devaluation" of their currencies and warned against "disorderly" exchange-rate moves

For the week, Dow and S & P 500 rose 2.1% and 2.3% respectively while Nasdaq climbed 3.4%. In Europe, DAX and CAC rose 3.7% each while FTSE was up 1.9%. In Asia, Shanghai lost 0.2% but Hang Seng climbed 3.6% and Nikkei rose 0.6%. Dollar index rose about half a percent for its first four-week winning streak since March 2015.

AT HOME

Party continued on Dalal Street as benchmark indices climbed more than a percent on the last day of the week, extending the winning streak to fourth straight day and closing at the highest level since late October. Sensex soared 287 points to settle at 26654 while Nifty finished at 8157, up 87 points. BSE mid-cap and small-cap indices gained 1.4% and 0.6% respectively. Except a 0.04% and 0.01% lower Telecom and FMCG indices, all the BSE sectoral indices ended in green with Oil & Gas and Energy indices leading the tally, up 2.7% and 2.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 480 cr, 2162 cr and 1014 cr respectively. DIIs were net buyers to the tune of Rs 69 cr.

Rupee appreciated 14 paise to end at 67.03/$.

For the week, Sensex and Nifty gained 5.3% and 5.2% respectively to close at the highest level since the week ended 23rd October 2015.

SBI reported 66% fall in Jan-March quarter profit at Rs 1264 cr, impacted by more than 2-fold rise in provisions. NII grew by 3.9% at Rs 15291 cr. Provisions for non-performing assets shot up 143% y-o-y to Rs 12139 cr. Slippages at Rs 30313 cr were higher-than-expected. Gross NPA ratio deteriorated 140 bps q-o-q to 6.5% and net NPA ratio climbed 92 bps to 3.81%. The stock however rebounded after the bank said that it had provided for more than required by AQR and that assets worth Rs. 31352 cr are in the watch list, which is just 2% of its total loan book and 70% of them can go bad , which is just 1.4% of the book.

Hindalco posted 123% y-o-y jump in Jan-March quarter net profit at Rs 356 cr. Total income slipped 7.5% at Rs 8667 cr. EBIDTA was up 38% at Rs 1166 cr while margin stood at 13.5% vs 9%.

BHEL reported 60% fall in profit at Rs 360 cr. Revenue declined 21.5% to Rs 10005 cr. Operating profit plunged 78% to Rs 364 cr and margin contracted by 956 bps to 3.64%.

Coal India reported just 0.2% rise in net profit at Rs 4248 cr. Coal production increased 8.8% to 151.86 mt. Total income too remained flat at Rs 21403 cr. Operating profit dipped 8% to Rs 4839 cr. The company however surprised by approving a price hike of 6.29% over its current coal prices across all grades. The new price would be effective from May 30.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 40 points higher start for our market.

After 7980-7990 hurdle was taken out, we were working with the target of 8150, where 20-month moving average was placed. Nifty on Friday surged 87 points to finish at 8157, achieving the target mentioned above.

Next major target as well as resistance to eye is 8243, the 61.8% retracement level of the entire 9119-6825 fall.

Traders can raise stop loss to 8077, the bottom made on Friday.

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

US markets will remain shut today for Memorial Day holiday.

NIFTY MARCHES TOWARDS 8150 TARGET; TRAIL STOP LOSS TO 7980

NIFTY MARCHES TOWARDS 8150 TARGET; TRAIL STOP LOSS TO 7980

WORLD MARKETS                             

Dow fell 0.1%, S & P 500 ended almost flat while Nasdaq managed to gain 0.1% yesterday, looking forward to hear from Fed Chair Yellen who is expected to answer questions Friday afternoon as she receives an award at Harvard University.

Durable goods orders jumped 3.4% last month. However, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8% for a third-straight month. Initial jobless claims fell to a seasonally adjusted 268,000 for the week ended May 21. Pending home sales rose 5.1% in April from the previous month to hit their highest level in a decade.

US oil, after hitting a high of $50 a barrel, retreated to end 8 cents lower at $49.48 a barrel.

In Europe, FTSE was little changed while DAX and CAC gained 0.7% each.

AT HOME

It was second consecutive day of blockbuster gains as Sensex and Nifty climbed 1.9% and 1.7% respectively to close at the highest level since 4th November 2015 and 29th October 2015 respectively. Sensex soared 486 points to settle at 26367 while Nifty finished at 8070, up 135 points. BSE mid-cap and small-cap indices gained 1% and 0.9% respectively. Except a flat Healthcare index, all the BSE sectoral indices gained with Capital Goods index leading the tally, up 8.8% followed by Industrial index, up 4%.

FIIs net bought stocks, index futures and stock futures worth Rs 581 cr, 2348 cr and 1215 cr respectively. DIIs were net buyers to the tune of Rs 685 cr.

Rupee appreciated 16 paise to end at 67.16/$.

For the May derivative series, Sensex and Nifty gained 3% and 2.8% respectively.

ONGC, supported by other income and exceptional gain, reported over 3-fold rise in fourth quarter net profit at Rs 4416 cr. Revenue declined 11.4% to Rs 16385 cr. Operating profit plunged 44.2% to Rs 4487 cr and margin contracted by 1560 bps to 27.4%.

BPCL reported 10.6% fall in Jan-March quarter net profit at Rs 2549 cr. GRM's fell to $6.30/bbl from $7.67/bbl.

OUTLOOK

Japan's core CPI fell 0.3% in April, likely putting additional pressure on the Bank of Japan to ease at its next monetary policy meeting.

Today morning Shanghai and Hang Seng are trading with modest cuts, other Asian markets are trading modestly higher and SGX Nifty is suggesting about 15 points higher opening for our market.

Readers would recall that we had recommended going long on Nifty upon sustained trading above 7820 for an initial target of 7940. In yesterday's report we had mentioned that a decisive crossover of 7980-7990 hurdle would open up the space for further upside till about 8150 where 20-month moving average is placed.

The benchmark crossed the 7980-7990 hurdle around middle of the day and surged all the way to 8083 before closing at 8070.

8150 continues to be the upside target to eye. 7980, the erstwhile resistance, would now act as the immediate support on the way down, with the stop loss of which trading longs should be held on to.

SBI and BHEL will report their quarterly earnings today. In case of SBI, focus will be on asset quality where slippages through AQR (Asset Quality Review) are seen at Rs 15000 cr and overall slippages are expected between Rs. 20000-25000 cr.  Accounts under 5/25 are seen at Rs 4000 cr.  Net profit is expected to fall 49% to Rs 1916 cr and NII is seen declining 5.4% to Rs 13915 cr.

NIFTY ACHIEVES 7940 TARGET

NIFTY ACHIEVES 7940 TARGET

WORLD MARKETS                             

S & P 500 and Nasdaq gained 0.7% each and Dow rose 0.8% yesterday with energy stocks leading as oil rose above $49 a barrel to hit fresh 2016 high.

US oil rose nearly 2% to $49.56 after data from the US Energy Information Administration showed crude inventories fell larger-than-expected 4.2 million barrels in the week to May 20. Brent gained 2.3% to $49.74 a barrel.

Markit Flash U.S. services PMI for May came in at 51.2, down from 52.8 in April . The advance April goods trade deficit was $57.53 billion. Mortgage application volume rose 2.3% for the week.

Dollar index fell about 0.2% to 95.40. Gold fell $5 to $1224 an ounce, its lowest since early April.

European markets climbed 0.7%-2.3% on the back of a new debt deal for Greece and a recovery in oil prices. Eurogroup ministers agreed to release 10.3 billion euros ($11.42 billion) for Greece after lawmakers approved more painful austerity measures over the weekend. Closely watched German Ifo Business climate index rose from 106.7 points in April to 107.7 points in May.

AT HOME

There was no stopping for bulls as benchmark indices, after a gap up opening, kept on moving higher through the day and finally ended with mammoth gains of two and a third of a percent, marking the best day since 1st March. Sensex soared 576 points to settle at 25881 while Nifty ended at 7935, up 186 points. BSE mid-cap and small-cap indices gained 1% each. All the BSE sectoral indices ended in green with Bankex and Capital Goods indices leading the tally, up 3.2% and 3% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 495 cr, 3343 cr and 168 cr respectively. DIIs were net buyers to the tune of Rs 337 cr.

Rupee appreciated 42 paise to end at 67.33/$.

Bajaj Auto reported 29.2% growth in Jan-March quarter net profit at Rs 803 cr, driven by better volume growth and operational performance despite lower other income. Revenue rose 14.2% to Rs 5411 cr.  Operating profit grew 37.4% to Rs 1152 cr and margin expanded by 360 bps to 21.3%.

Ashok Leyland reported a sharp 66.5% dip in net profit at Rs 77 cr, impacted by an exceptional loss of Rs 379 cr. Revenue rose 32% to Rs 5955 cr. Operating profit shot up 65% to Rs 753 cr and margin expanded by 250 bps to 12.6%. Revenue met expectations while operational performance was slightly below estimates.

L & T reported better-than-expected results on all counts. Consolidated net profit rose 18.6% to Rs 2454 cr whille revenue increased 18.3% to Rs 33157 cr. EBIDTA shot up 35.2% to Rs 4859 cr and margin expanded by 190 bps to 14.7%.

Tata Steel reported wider-than-expected consolidated net loss of Rs 3279 cr on revenues of Rs 29507 cr which were down 12.4%. EBIDTA rose 43.7% to Rs 1580 cr and margin improved. Topline and bottomline were worse-than-expected while EBIDTA topped estimate. The loss came in wider than expected as the company took impairment charges and write downs of Rs. 2857.79 crore due to restructuring in UK and some purely performing investments. The company however did not reveal anything about the sell of its UK operations.

OUTLOOK

Today morning Hang Seng is down 0.2%, Shanghai is flat and Nikkei is up about 0.7%. SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had mentioned that a sustained trading above 7820 would trigger a buy on the hourly chart and 7940, the top made last week, would be the next target in that case.

The benchmark crossed 7820 hurdle in the initial trade itself and surged all the way to 7941 before closing at 7935, achieving the 7940 target.

After today's positive start, Nifty would be back in the vicinity of 7980-7990 hurdle area, where has been a ceiling for last one month or so. A successful crossover of this hurdle would open up the space for the further upside till about 8150, where 20-month moving average is placed.

Traders can book some profit around 7980 and raise stop loss in remaining position to 7820.

BPCL and ONGC will report their quarterly earnings today.

NIFTY SET TO CHALLENGE 7820 HURDLE; KEY EARNINGS IN FOCUS

NIFTY SET TO CHALLENGE 7820 HURDLE; KEY EARNINGS IN FOCUS

WORLD MARKETS                             

US indices soared 1.2%-2% yesterday on the back of positive housing data and gains in European markets.

New home sales for April jumped 16.6% to 619,000 units, topping expectations and the highest level since January 2008

Dollar index rose nearly a third of a percent to 95.60, its highest in nearly two months. Euro fell to $1.114, its lowest since mid-March. Gold plunged $22 to $1229 an ounce.

Nymex oil rose 54 cents to $48.62 a barrel, its highest since October. Brent gained half a percent to $48.62 a barrel, marking the first settle below WTI since January. Data from the American Petroleum Institute showed U.S. crude inventories fell 5.1 million barrels last week, beating expectations.

European markets climbed 1.4%-3.3% on the back of euro weakness against the U.S. dollar, general improvement in European data, and a poll showing less support for the U.K. leaving the European Union. Germany's ZEW economic sentiment index fell unexpectedly in May to 6.4 from 11.2 in April.

AT HOME

After trading around the zero line in the morning trade, benchmark indices spiked up in the late noon trade to end higher by about a fourth of a percent, breaking four day losing streak. Sensex added 75 points to settle at 25305 while Nifty finished at 7749, up 18 points. BSE mid-cap and small-cap indices however lost 0.2% and 0.6% respectively. BSE Finance and Auto indices gained 0.4% and 0.3% respectively, becoming top gainers among the sectoral indices while Oil & Gas and Healthcare indices tumbled 1% and 0.9% respectively, becoming top losers.

FIIs net sold stocks and index futures worth Rs 816 cr and 373 cr respectively but net bought stock futures worth Rs 351 cr. DIIs were net buyers to the tune of Rs 990 cr.

Rupee depreciated 26 paise to end at 67.75/$, its lowest in 2-1/2 months.

Private weather forecaster Skymet yesterday upped its Indian monsson forecast to 109% of the long period average from 105% earlier.

Tech Mahindra beat estimates on bottomline front but revenue and EBIT were in-line. Dollar revenue was up 0.75% at USD 1023 mn q-o-q. Rupee revenue rose 2.7% to Rs 6884 cr and profit, driven by other income, forex gain and lower tax cost, jumped 18.2% to Rs 897 cr. EBIT fell 2% to Rs 944 cr and margin contracted by 65 bps to 13.7% which were slightly lower-than-expected.

Cipla, hit by lot of one-offs, reported 69% dip in net profit at Rs. 80 cr. Revenue rose 6% to Rs 3206 cr. Operating margins fell to 6.7% from 16.4% y-o-y. Adjusted margin stood at 15.8%.

OUTLOOK

Today morning Asian markets are trading with gains of 0.7%-2.3% with Hang Seng leading the tally and SGX Nifty is suggesting about 70 points higher opening for our market.

For past couple of sessions we have been working with downside target of 7680, which was the bottom made in early May.

Nifty, after touching a low of 7716 yesterday, rebounded to close at 7749 and a gap up opening today is expected to take it above 7800 mark.

7820, as mentioned in yesterday's report, continues to be immediate hurdle to eye on the way up, a sustained trading above which will trigger a buy on the hourly chart and would pave the way for the further upmove. 7940, the top made last week, would be the next target in that case.

Traders can square-off short positions and go long once the top made in first hour is taken out.

L & T, Bajaj Auto, Ashok Leyland and Tata Steel will report their quarterly earnings today.

NIFTY ON TRACK TO ACHIEVE 7680 TARGET

NIFTY ON TRACK TO ACHIEVE 7680 TARGET

WORLD MARKETS                             

US indices fell 0.1%-0.2%, digesting prospect of a rate hike in June and awaiting further cues from the U.S. Federal Reserve.

Over the weekend Boston Fed President told that "most of the conditions that were laid out in the minutes as of right now seem to be … on the verge of broadly being met."  Yesterday, St. Louis Fed President said a tight labor market may put upward pressure on U.S. inflation, supporting the case for higher rates. Separately San Francisco Fed President said that there could be two or three rate hikes this year, and maybe three or four next year.

Nymex crude fell 33 cents or 0.7% to $48.08 a barrel. The commodity came under pressure after Iran's deputy oil minister said the nation had no plan to freeze crude output or exports but pared losses after data showing a stockpile drawdown at a major U.S. delivery hub.

The flash Markit manufacturing PMI came in at 50.5 in May, down from 50.8 in April.

The U.S. issued a fresh warning to Japan against competitive currency devaluation on Saturday, exposing a rift on exchange-rate policy that overshadowed a G-7 finance leaders gathering hosted by Japan.

In Europe, FTSE fell 0.3%, CAC and DAX lost 0.7% each while Italy tumbled 2.7%. Markit's latest flash PMI came in at a 16-month low of 52.9 in May, down from April's 53.0. However, Germany's PMI rose to 54.7 in May from April's 53.6; France's hit a seven-month high of 51.1.

AT HOME

Benchmark indices ended lower by a fourth of a percent after an extremely choppy trade, extending the losing streak to fourth straight day. Sensex lost 72 points to settle at 25230 while Nifty finished at 7731, down 19 points. BSE mid-cap and small-cap indices lost 0.3% and 0.4% respectively. BSE Capital Goods and Healthcare indices lost 0.9% and 0.8% respectively, becoming top losers among the sectoral indices while FMCG index soared 2.1% to become top gainer, followed by 0.8% rise in Telecom index.

FIIs net sold stocks worth Rs 66 cr but net bought index futures and stock futures worth Rs 326 cr and 386 cr respectively. DIIs were net sellers to the tune of Rs 168 cr.

Rupee depreciated 5 paise to end at 67.49/$.

National Green Tribunal yesterday banned registration of new diesel vehicles with an engine capacity of over 2000 cc in Kerala. The tribunal also banned light and heavy diesel vehicles that are more than 10 years old from plying in six major cities in the state.

Tata Power reported 126% growth in Jan-March quarter profit at Rs 360 cr aided by lower tax, finance and fuel costs. Operating profit rose 23% to Rs 1312 cr. Revenue rose 19% to Rs. 9334 cr.

OUTLOOK

Today morning Asian markets are trading with cuts of upto 0.7% with Nikkei leading the losses and SGX Nifty is suggesting about 15 points lower opening for our market.

Ever since Nifty broke 7780-7770 support, we have been working with the downside target of 7680, which is the bottom made in early May. Yesterday Nifty lost 19 points to close at 7731.

7680 continues to be the downside target to eye, a decisive breach of which will open up the possibility of the retest of the 7517 bottom made in April.

Immediate hurdle on the hourly chart has moved lower to 7820, with the stop loss of which short positions should be held on to.

Cipla and Tech Mahindra will report their quarterly earnings today.

NIFTY BREAKS 7770 SUPPORT; STAY SHORT WITH STOP LOSS OF 7835

NIFTY BREAKS 7770 SUPPORT; STAY SHORT WITH STOP LOSS OF 7835

WORLD MARKETS                             

US indices gained 0.4%-1.2% with tech stocks leading.

Existing home sales increased 1.7% in April to an annual rate of 5.45 million units.

Nymex oil fell 41 cents or 0.85% to $47.75 a barrel. Dollar index ended marginally higher at 95.33. Gold fell $2 to $1253 an ounce, its lowest since April 27.

European markets climbed 1.1%-1.7%

For the week, Dow fell 0.2% for its first four-week losing streak since the one ended October 2014. S & P 500 and Nasdaq however gained 0.3% and 1.1% respectively. In Europe, FTSE and CAC gained 0.3% and 0.8% respectively while DAX lost 0.4%. In Asia, Shanghai Composite lost 0.1% for its first five-week losing streak since 2012. Hang Seng rose 0.7%, snapping a three-week losing streak. Nikkei climbed 2%. US oil gained more than 3%. Dollar index gained about 0.8% for its first three-week win streak since March 2015. Gold fell little less than 2%, posting second-straight week of decline.

AT HOME

Benchmark indices fell four tenth of a percent, extending the losing streak to third straight day and closing at the lowest level since 6th May. Sensex lost 98 points to settle at 25302 while Nifty finished at 7750, down 34 points. BSE mid-cap and small-cap indices lost 0.5% and 0.8% respectively. Except a 0.2% higher FMCG index, all the BSE sectoral indices ended in red with Realty and Healthcare indices leading the tally, down 1.4% each.

FIIs net sold stocks and index futures worth Rs 744 cr and 45 cr respectively but net bought stock futures worth Rs 140 cr. DIIs were net buyers to the tune of Rs 597 cr.

Rupee depreciated 8 paise to end at 67.44/$.

For the week, Sensex and Nifty lost 0.7% and 0.8% respectively.

Lupin nosedived despite a strong quarterly earnings report on concerns about future prospects of the company following recent FDA observations on Goa and Mandideep plants.

ITC reported 5.7% rise in Jan-March quarter net profit at Rs 2495 cr while revenue jumped 9.4% to Rs 10169 cr. EBIDTA grew 13.7% to Rs 3687 cr while margin was at 36.3% vs 34.9% y-o-y. The company also announced 1:2 bonus.

OUTLOOK

Data released today morning showed Japanese exports were down 10.1% on-year in April, reflecting sluggish demand from China, the emerging markets and the U.S.  Imports for April were down 23.3%t on-year. The trade balance was 823.47 billion yen.

Today morning, Nikkei is down more than a percent but other Asian markets are trading with modest gains and SGX Nifty is suggesting about 10 points higher start for our market.

Nifty on Friday fell 34 points to close at 7750, closing below 34-DMA support for second consecutive day and breaking the 7780-7770 support area on closing basis. Next support on the way down comes around 7680, where the bottom made in early May is placed.

Immediate resistance on the hourly chart is placed at 7835, with the stop loss of which trading shorts can be held on to.

Tata Power will report its quarterly results today.

NIFTY HOLDS 7770 SUPPORT BY THE SKIN OF IT’S TEETH

NIFTY HOLDS 7770 SUPPORT BY THE SKIN OF IT’S TEETH

WORLD MARKETS                             

US indices ended off the day low but still lower by 0.4%-0.6%, amidst a stream of hawkish commentary from U.S. Federal Reserve officials.

New York Fed President William Dudley yesterday said that June was definitely a live meeting and that he was quite pleased market expectations for the probability of a June or July rate hike had moved up. Also, Richmond Fed President Jeffrey Lacker said that he was comfortable with four Fed rate hikes in 2016.

WTI oil, after falling nearly 4%, recouped all the losses to end just 3 cents lower at $48.16 a barrel.

US weekly jobless claims declined to 278,000, after three weeks of increases. The May Philly Fed index came in at minus 1.8.

Dollar index, after climbing to 95.50, its highest since late March, cooled-off to close at 95.30. Gold tumbled $20 to $1255 an ounce.

European markets tumbled 0.8%-1.8%

AT HOME

Benchmark indices nosedived more than a percent yesterday, suffering the largest daily fall since 28th April and closing at the lowest level since 6th May. Sensex lost 305 points to settle at 25400 while Nifty finished at 7783, down 87 points. BSE mid-cap and small-cap indices lost 1.1% and 1% respectively. All the BSE sectoral indices ended in red with Capital Goods and FMCG indices leading the tally, down 2.4% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 765 cr and 293 cr respectively but net bought stock futures worth Rs 427 cr. DIIs were net bought stocks worth Rs 1484 cr.

Rupee depreciated 39 paise to end at 67.36/$.

Trinmool Congress and AIADMK retained West Bengal and Tamil Nadu respectively in the assembly elections held recently. However, there was no such luck for Congress which lost Assam and Kerala to BJP and Left respectively.

Lupin reported better-than-expected 47.5% growth in Jan-March quarter net profit at Rs 807 cr. Revenue rose 36% to Rs 4181 cr. Operating profit shot up 73% to Rs 1367 cr and margin expanded by 710 bps to 32.7%.

Acting upon recommendations of the Supreme Court-appointed Special Investigation Team on black money, SEBI yesterday tightened due diligence requirement for issuance and transfer of p-notes by making it mandatory for all end-users of these overseas instruments to follow anti-money laundering law in India and asked their issuers to report any suspected breach immediately. Presently, the ODI issuers follow the KYC/AML norms of either the jurisdiction of the end beneficial owner or of the jurisdiction of the ODI issuer. In order to bring about an uniformity in the KYC/AML norms, it has been decided that Indian norms will now be applicable to all ODI issuers. These norms will be the same as that applicable for all other domestic investors. Also, ODI Issuers will be required to identify and verify the beneficial owners in the subscriber entities, who hold in excess of the applicable threshold -- 25 per cent in case of a company and 15 per cent in case of partnership firms, trusts or unincorporated bodies.

OUTLOOK

Today morning, except a modestly lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 10 points higher opening for our market.

For past couple of sessions, we have been mentioning that 7770-7780 is the immediate support on the daily chart, a breach of which would also generate a sell on the hourly chart and can take Nifty to 7678, the bottom made in early May.

The benchmark plunged to 7767 yesterday but because of averaging, closed at 7783, holding the 7770 support by the skin of its teeth.

7770 continues to be immediate support a sustained trading below which should be awaited before initiating short positions.

ITC will report its quarterly earnings today.

DOLLAR HITS ONE AND HALF MONTH HIGH ON RATE HIKE FEARS; 7770 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

DOLLAR HITS ONE AND HALF MONTH HIGH ON RATE HIKE FEARS; 7770 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

WORLD MARKETS                             

Dow and S & P 500 ended flat while Nasdaq gained half a percent. All 3-indices however finished off-the day high after the Federal Reserve's April meeting minutes said a June rate hike was likely if the data improves.

The Federal Open Market Committee's April meeting minutes said, "Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June."

Dollar index gained more than half a percent to 95.19, its highest since late March. Commodities, especially copper took a hit on stronger dollar.

US oil fell 12 centss to $48.19 a barrel. EIA's weekly inventory data showed a 1.3 million barrel build in crude, while other fuel stockpiles declined.

European markets, except a marginally lower FTSE, gained 0.5%-1.2% with Italy on the top.

AT HOME

After falling a percent in the morning trade, benchmark indices recouped most of the losses in the noon trade to end lower by a fourth of a percent. Sensex lost 69 points to settle at 25705 while Nifty ended at 7870, down 21 points. BSE mid-cap index ended flat while small-cap index gained 0.2%. BSE Realty index climbed 2.1%, becoming top gainer among the sectoral indices, followed by 0.6% rise in Capital Goods index. Auto and Consumer Discretionary indices were the top losers, down 1.3% and 0.7% respectively.

FIIs net sold stocks, index future and stock futures worth Rs 251 cr and 1282 cr respectively but net bought stock futures worth Rs 285 cr. DIIs were net buyers to the tune of Rs 240 cr.

Rupee depreciated 10 paise to end at 66.97/$.

OUTLOOK

Today morning, except a modestly higher Nikkei and Shanghai, other Asian markets are trading with cuts of upto a percent with Hang Seng leading the losses and SGX Nifty is suggesting about 40 points lower opening for our market.

In yesterday's report we had mentioned that 7990-7770 continues to be broad range for Nifty, a decisive breach of which on either side is required for taking a fresh directional view.

Yesterday, the benchmark, after touching a low of 7810, rebounded to close at 7870 but is set to open lower today.

7770 continues to be immediate support, a breach of which will generate a sell on the hourly chart and 7680, the bottom made in early May, would be the next target in that case.

Counting for the elections held in Kerala, West Bengal, Assam, Tamil Nadu and Puducherry will be held today.

SEBI, in its board meeting today, is expected to consider stringent rules for P-Notes as part of efforts to check the flow of black money into stock market.

Lupin will report its quarterly earnings today.

7770-7990 CONTINUES TO BE BROAD RANGE

7770-7990 CONTINUES TO BE BROAD RANGE

WORLD MARKETS                             

Dow and S & P 500 plunged 1% each and Nasdaq tumbled 1.25% on concerns over interest-rate hike ahead of release of the Fed meeting minutes on Wednesday, which market feared could be more hawkish than the statement that followed April's meeting

That fear was echoed in comments from San Francisco and Atlanta Fed Presidents who said the Fed could still raise rates two or three times this year.

The rate-sensitive 2-year Treasury yield rose to 0.827%, its highest since April 28.

In economic news, industrial production rose 0.7% in April. Capacity utilization was 75.4%. The Consumer Price Index rose 0.4% in April. Ex-food and energy, the index rose 0.2% last month, or 2.1% over the last 12 months as against a 2.2% rise in March. Housing starts rose 6.6% in April to a seasonally adjusted annual pace of 1.17 million units.

US oill rose 59 cents or 1.2% to $48.31 a barrel, its highest since October amid near-term supply outages, as a wildfire in Canada prompted evacuation of about 4,000 people from work camps outside the Fort McMurray oil hub.

European markets, except a 0.3% higher FTSE, fell 0.3%-1.3% with Italy leading the tally. Auto stocks were down the most. Italy's national statistics institute said the country's economy will grow by 1.1% this year, a cut in its earlier 1.4% forecast.

AT HOME

After gaining a percent through the session, benchmark indices gave away nearly half of the gains in last hour or so to end higher by little less than half a percent. Sensex settled at 25774, up 120 points while Nifty added 30 points to finish at 7891. BSE mid-cap and small-cap indices gained 0.1% and 0.2% respectively. BSE Oil & Gas and Realty indices gained 1.2% and 0.8% respectively, becoming top gainers among the sectoral indices while Power and Telecom indices were the top losers, giving away 0.4% and 0.3% respectively.

FIIs net sold stocks worth Rs 224 cr but net bought index futures and stock futures worth Rs 296 cr and 403 cr respectively. DIIs were net buyers to the tune of Rs 384 cr.

Rupee depreciated 7 paise to end at 66.87/$.

SBI yesterday said its board has given in-principle approval for the bank to discuss the possibility of acquiring its five associate banks along with Bhartiya Mahilla Bank.

OUTLOOK

Today morning Nikkei is up more than half a percent after data showed Japan’s Jan-March quarter GDP rose 0.4% on quarter, beating the forecast for 0.1% growth. Annualised GDP for the period grew 1.7% as against expectation of 0.2% uptick. Hang Seng and Shanghai are down nearly a percent and other Asian markets are trading mixed with modest changes. SGX Nifty is suggesting about 35 points lower opening for our market.

After Nifty staged a smart rebound from the 34-DMA support on Monday, in yesterday's report we had said that 7916, the top made last week, is the immediate hurdle above which 7992, the top made in April, would be the bigger resistance to eye.

The benchmark, after touching a high of 7940, plunged sharply in last hour or so to end at 7891.

7970-7990 continues to be major hurdle area, a decisive crossover of which is required for fresh upmove. If that happens, 8140, the 20-month moving average, would be the next target followed by 8300.

7770-7780 continues to be important support area on the way down.

Traders are advised to wait for the crossover of 7770-7990 range on either side for taking a fresh view.

PNB and JSW Steel will report their quarterly earnings today.

NIFTY REBOUNDS FROM 34-DMA SUPPORT

NIFTY REBOUNDS FROM 34-DMA SUPPORT

WORLD MARKETS                             

Dow and S & P 500 climbed 1% each while Nasdaq surged 1.2% yesterday, supported by rise in energy stocks and Apple.

Energy stocks led the gains as US oil futures jumped 3.2% to $47.72 a barrel while Brent settled up 2.4% at $48.97, with both at their highest settlement since November 3. The gains came on growing Nigerian oil output disruptions and after long-time bear Goldman Sachs said the market shifted into deficit in May due to falling production, ending almost two years of oversupply.

Apple gained 3.7%, posting its best day since March 1 and contributed the most to gains in the Dow.

In economic news, the Empire State Manufacturing index for May came in at minus 9.02 versus positive 9.56 in April. Home builder confidence was unchanged for a fourth-straight month, at 58 in May

European markets closed mixed with modest changes.

AT HOME

After falling about half a percent in the morning trade, benchmark indices climbed more than a percent from the bottom of the day to end higher by six tenth of a percent. Sensex added 164 points to settle at 25653 while Nifty finished at 7861, up 46 points. BSE mid-cap and small-cap indices gained 0.3% and 0.1% respectively. BSE FMCG and Realty indices soared 1.6% and 1.5% respectively, becoming top gainers among sectoral indices while Oil & Gas and Capital Goods indices were the top losers, down 0.4% and 0.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 80 cr, 193 cr and 405 cr respectively. DIIs were net sellers to the tune of Rs 128 cr.

Rupee depreciated 3 paise to end at 66.80/$.

Exit polls for the four States and one Union territory for which elections concluded yesterday showed the DMK-Congress alliance heading to victory in Tamil Nadu, West Bengal Chief Minister Mamata Banerjee set for a repeat victory in that State, a Left Front government in Kerala, and a historic win for the NDA in Assam.

Oil marketing companies hiked petrol and diesel price by 83 paise/litre and Rs. 1.26/litre yesterday.

OUTLOOK

Today morning, Nikkei is up about 0.8%, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 15 points higher opening for our market.

In yesterday's report we had mentioned that "After Friday's fall, Nifty is back to immediate important support of 34-DMA, which has now moved up to around 7780" and that a sustained trading below 7780 would confirm a sell on the hourly chart and would pave the way for the further downside.

The benchmark, after touching a low of 7772, rebounded sharply to close at 7861, holding on to the 7780 support.

7770-7780 continues to be important support area. On the way up, 7916, the top made last week, is the immediate hurdle above which 7992, the top made in April, would be the bigger resistance to eye.

Bharat Forge, Motherson Sumi and Voltas will report their quarterly earnings today.

NIFTY BACK TO 34-DMA SUPPORT OF 7780

NIFTY BACK TO 34-DMA SUPPORT OF 7780

WORLD MARKETS                             

US indices tumbled 0.4%-1% on Friday as strong retail sales data reignited concerns over interest rate hike.

April retail sles rose 1.3%, topping expectations and marking biggest gain in over a year. The producer price index rose 0.2% in April. The preliminary read on May consumer sentiment rose to 95.8. Business inventories rose a more-than-expected 0.4% in March.

Dollar index gained about half a percent to hit 94.57, its highest in three weeks.

US crude oil futures settled down 49 cents or 1.1% at $46.21 a brarrel. Baker Hughes said U.S. oil rigs fell by 10.

European markets gained 0.4%-0.9%.  European car sales rose 9% in April.

For the week, Dow and S & P 500 fell 1.2% and 0.5% respectively for their first three-week decline since the week ended Jan. 15. Nasdaq lost 0.4% for its first four-week losing streak since October 2014. Key European markets gained 0.2%-0.8% In Asia, Shanghai and Hang Seng tumbled 3% and 2% respectively while Nikkei gained 2%.

Nymex oil gained 3.5%. Dollar index gained about 0.7% for its second consecutive weekly gain. Gold declined 1.6%, its worst week since the week ending March 24.

AT HOME

After a modestly lower start, benchmark indices saw sharp bouts of selling through the session to end with deep cuts of more than a percent. Sensex lost 301 points to settle at 25490 while Nifty ended at 7815, down 85 points. BSE mid-cap and small-cap indices lost 0.6% and 0.2% respectively.  All the BSE sectoral indices ended in red with Realty and Metal indices leading the tally, down 2% each.

FIIs net bought stocks worth Rs 1494 cr but net sold index futures and stock futures worth Rs 238 cr and 324 cr respectively. However, stripped off the Rs 2100 cr Eicher deal, FII flow would be negative. DIIs were net buyers to the tune of Rs 667 cr.

Rupee depreciated 14 paise to end at 66.77/$.

For the week, Sensex and Nifty gained 1% each, breaking two-week losing streak.

Bank of Baroda reported a net loss of Rs 3230 cr in Jan-March quarter as provisions surged to Rs 6858 cr compared to Rs 6164 cr q-o-q and Rs 1818 cr y-o-y. NII rose 5% to Rs 3330 cr and was better-than-estimates. Gross NPA deteriorated to 9.99% from 9.68% sequentially but Net NPA improved to 5.06% from 5.67%. Provision coverage ratio improved to 60.09% from 52.70%.

Met department, in its latest forecast yesterday said that the monsoon onset will be delayed by six days. 

OUTLOOK

Data over the weekend from China showed investment, factory output and retail sales all grew more slowly than expected in April, with factory output cooling to 6% growth in April compared to market expectation for a 6.5% rise.

Today morning Nikkei, on the back of weaker yen, is up about a percent and Hang Seng is up 0.3%. Other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 30 points lower opening for our market.

Readers would recall that we had advised going long on Nifty when immediate hurdle of 7780 was taken out last Monday for the target of 7990, which was the top made in April. During the week, Nifty touched a high of 7916 but tumbled on Friday to 7784 before closing at 7815.

After Friday's fall, Nifty is back to immediate important support of 34-DMA, which has now moved up to around 7780. A breach of 7780 would also confirm a sell on the hourly chart and in that case 7678, the bottom made in early May, would be the next downside target to eye.

On the way up, 7916, the top made on Thursday, would now be the immediate hurdle above which 7990, would be the tougher resistance to eye.