8500 CONTINUES TO BE IMPORTANT SUPPORT; 8670 IMMEDIATE HURDLE

8500 CONTINUES TO BE IMPORTANT SUPPORT; 8670 IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.2%-0.6% yesterday amid rise in dollar, uptick in oil and mixed earnings reactions.

WTI as well as Brent crude rose 1% to $49.72 and $50.47 respectively after media reports suggested that energy ministers from Saudi Arabia and their gulf allies stated that they would be willing to reduce oil output by around 4%.

Initial jobless claims fell 3,000 to 258,000, while durable goods for September unexpectedly fell. Pending home sales rose 1.5% in September.

Dollar index climbed to 98.93 from 98.62, marking the highest close in nearly 9-months.

European markets, except a marginally lower CAC, gained upto 0.8%. The 10-year UK Gilt yield popped about 10 bps after data showed the U.K. economy grew 0.5% q-o-q, beating estimates of 0.3%.

AT HOME

After falling about three fourth of a percent in the morning session, benchmark indices recouped all the losses in the noon to end flat to modestly higher. Sensex added 79 points to settle at 27916 while Nifty ended absolutely flat at 8615. BSE mid-cap and small-cap indices plunged 1% and 0.8% respectively. BSE Auto and Consumer Discretionary Goods indices fell 1.4% and 1.3% respectively, becoming top losers among the sectoral indices while FMCG and Finance indices were the top gainers, up 0.6% and 0.4% respectively.

FIIs net sold stocks and stock futures worth Rs 470 cr and 1813 cr respectively but net bought index futures worth Rs 819 cr. DIIs were net buyers to the tune of Rs 857 cr.

Rupee depreciated 3 paise to end at 66.86/$.

Maruti Suzuki's quarterly earnings surpassed expectations with profit climbing 60% y-o-y to Rs 2398 cr, boosted by other income, operational income and volume growth. Revenue grew 29.3% to Rs 20297 cr. Operating profit jumped 35.3% to Rs 3037 cr and margin expanded by 80 bps to 17.3%.

ONGC's standalone profit beat estimates, rising 17.5% q-o-q to Rs 4975 cr. Revenue rose 3.4% to Rs 18395 cr. EBIDTA grew 7.9% to Rs 9100 cr and margin expanded 10 bps to 49.5% q-o-q. Operational performance was lower than expected. The company announced 1:2 bonus.

Tech Mahindra's was a mixed bag. Dollar revenue rose 3.6% q-o-q and constant currency growth stood at 5%, best among peers. Rupee revenue rose 3.6% to Rs 7167 cr. Net profit however fell 19% to Rs 643 cr . EBIT fell by 0.2% to Rs 825.4 crore and margin contracted by 45 bps to 11.50%. Net profit was pulled down by a one-time restructuring cost and margins were impacted by high tax outlays.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 30 points lower start for our market.

As we have been mentioning, after a six months upmove starting March, Nifty is in consolidation mode over last two months or so. Now 8500 is the important support as that has been the floor in this two month consolidation phase and a breach of 8500 would open up the space for further downside till at least about 8300, which is the top made in June this year and also coincides with 34 week moving average.

On the way up, immediate hurdle on the hourly chart is palced around 8670, with the stop-loss of which trading shorts can be held on to.

Bajaj Auto, NTPC, Grasim, Eicher Motors, Marico, Colgate and Nestle will report their quarterly earnings today.

NIFTY ACHIEVES 8595 TARGET; 8680 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 8595 TARGET; 8680 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

While Dow managed to end 0.2% higher, S & P 500 and Nasdaq fell 0.2% and 0.6% respectively as fall in oil weighed on the sentiment and gains in Boeing offset sharp losses in Apple.

WTI and Brent oil fell 1.6% each to settle at $49.18 and $49.98 per barrel respectively despite data from the U.S. Energy Information Administration that showed U.S. crude stockpiles fell 553,000 barrels in the previous week.

The October services PMI index jumped to 54.8 from 52.3, while new home sales rose 3.1% in September. Mortgage applications fell 4.1% last week, despite lower mortgage rates.

Dollar index, after touching a low of 98.33, recovered to end at 98.62, previous close being 98.73. Gold fell $7 to $1267 per ounce.

Main European markets gave away 0.1%-0.8%. Italy and Spain however added 0.3% and 0.4% respectively.

AT HOME

After starting lower by about four tenth of a percent, benchmark indices extended the down move through the session to end lower by nine tenth of a percent. Sensex lost 255 points to settle at 27837 while Nifty finished at 8615, down 76 points. BSE mid-cap and small-cap indices lost 0.9% and 0.7% respectively. Except a 0.8% and 0.4% rise in Telecom and Consumer Durables indices respectively, all the BSE sectoral indices ended in red with Bankex leading the tally, down 1.9%, followed by 1.4% each cut in Metal and Industrial indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1451 cr, 232 cr and 388 cr respectively. DIIs were net buyers to the tune of Rs 989 cr.

Rupee depreciated 1 paise to end at 66.83/$.

Hero Motocorp reported better-than-expected 27.7% y-o-y growth at Rs 1004 cr, the highest ever absolute figure, on strong operational performance and volume growth. Revenue rose 15% to Rs 8449 cr. EBIDTA grew 25% to Rs 1369 cr while margin expanded by 129 bps to 16.2%.

HUL profit during July-September quarter grew by 11.5% y-o-y to Rs 1,096 crore. Revenue grew by 1.6% to Rs 8,480 crore. Volume disappointed, declining 1% as against expectation of 3-4% growth. EBIDTA rose 5% to Rs 1405 cr while margin expanded by 55 bps to 16.56%.

ITC reported 10.5% y-o-y growth in July-September quarter net profit at Rs 2500 cr. Total income rose 8% to Rs 13616 cr.  EBIDTA was up 7.3% at Rs 3630 cr while margins were almost flat at 26.7% as against 26.8% y-o-y. Cigarette revenue grew 7% to Rs 8528 cr.

HDFC posted 13.8% y-o-y growth in second quarter net profit at Rs 1826.5 cr. Income from operations grew 9.6% to Rs 8063 cr. 

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally lower start for our market.

In yesterday's report we had mentioned that "8650, which is the immediate previous bottom on the hourly chart, is the immediate support, upon breach of which 8595, the 61.8% retracement level of the recent 8506-8737 upmove, would be the next downside target to eye."

Yesterday, Nifty broke 8650 support in the initial trade itself and plunged all the way to 8596 before closing at 8615, achieving the 8595 target mentioned above and vindicating our view.

8595 continues to be immediate support to eye a breach of which would open up the possibility of the retest of 8507 bottom made on 17th October.

Immediate resistance on the hourly chart is placed around 8680, with the stop-loss of which trading shorts can be held on to.

Maruti, Tech Mahindra, ONGC, IOC and TVS Motors will report their quarterly earnings today.

NIFTY EXTENDS BROAD CONSOLIDATION; 8650 IS THE IMMEDIATE SUPPORT

NIFTY EXTENDS BROAD CONSOLIDATION; 8650 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.3%-0.5% yesterday, digesting mixed earnings and a fall in oil.

Caterpillar and 3M posted mixed results, as both beat estimates on the bottom line, while missing on revenues. Caterpillar also lowered its 2016 earnings per share guidance.

US oil fell 1.1% to $49.96 a barrel and Brent lost 1.3% to $50.79 after data from the American Petroleum Institute showed U.S. crude stocks rose by 4.8 million barrels in the week ended October 21, higher than the 1.7 million barrel build forecast.

US consumer confidence came in at 98.6, lower than the expected 101.5 mark. Home prices rose slightly in August from July, with the S&P CoreLogic Case-Shiller 20-City Composite index gaining 5.1% year over year.

Dollar index came off the day high to end flat. Gold gained $10 to $1274 per ounce.

European markets, except a 0.4% higher FTSE, fell upto 0.8%

Apple posted a third straight quarter of year-on-year revenue declines after the bell, despite a better-than-expected iPhone sales. Revenue was in line with expectations

AT HOME

After falling about half a percent in the initial trade, benchmark indices recouped nearly half of the losses through the session to end modestly lower. Sensex settled at 28091, down 88 points while Nifty lost 18 points to finish at 8691. BSE mid-cap index fell 0.3% but the small-cap index managed to add 0.1%. BSE FMCG and IT indices fell 0.8% each, becoming top losers among the sectoral indices whereas Telecom index climbed 0.8%, becoming top gainer, followed by half a percent higher Healthcare and Consumer Durable indices.

FIIs net sold stocks and index futures worth Rs 606 cr and 764 cr respectively but net bought stock futures worth Rs 189 cr. DIIs were net buyers to the tune of Rs 389 cr.

Rupee appreciated 3 paise to end at 66.82/$.

HDFC Bank met expectations with second quarter profit rising 20.4% y-o-y to Rs 3,455.3 crore. Net interest income, the difference between interest earned and interest expended, grew by 19.6% to Rs 7,993 crorer, which missed estimates due to lower-than-expected loan growth. Asset quality was stable with gross non-performing assets as a percentage of gross advances falling to 1.02% from 1.04% and net NPAs down to 0.3% from 0.32% on sequential basis.

Dr Reddy's second quarter consolidated net profit plunged 60% y-o-y to Rs 309 crore on weak operational performance but sequential performance was quite strong. Revenue during the quarter declined 10.1% to Rs 3,616 crore on yearly basis, dented by US and emerging markets business. However, sequentially the same grew by 11.5%. EBITDA fell 44% to Rs 640 crore and margin contracted by 1050 basis points to 17.9% compared with year-ago period.

Kotak Mahindra Bank reported a 43% y-o-y growth in second quarter standalone profit at Rs 813.3 crore. Net interest income grew by 19% to Rs 1,995 cr. which was in-line with estimates. Net interest margin expanded to 4.47% from 4.3% YoY. Asset quality was stable with standalone gross non-performing assets (NPA) at 2.49% against 2.50% and net NPA at 1.2% against 1.21% on sequential basis.

Zee Entertainment's profit during July-September quarter increased 27% y-o-y to Rs 238.4 crore on strong revenue as well as operational performance but impacted by lower other income and higher tax cost. Revenue during the quarter grew by 23% to Rs 1,695.4 crore, driven by better-than-expected advertising and subscription revenue growth of 15.7% and 21.7%, respectively. EBITDA jumped 36.4% to Rs 489.2 crore and margin expanded by 290 basis points to 28.9%.

Adani Ports' second quarter earnings surpassed expectations with consolidated profit surging 61% y-o-y to Rs 1,091 crore on strong operational performance. Revenue grew by 20.7% to Rs 2,183 crore as cargo volumes increased by 17% and container volumes by 30%. EBITDA jumped 23.2% to Rs 1,451 crore and margin expanded by 130 basis points to 66.5% in Q2.

Axis Bank reported a whopping 83% y-o-y fall in profit at Rs 319 crore for July-September quarter, dented by big clean-up of bad loans. Provisions jumped more than 5-fold to Rs 3,623 crore compared with year-ago period. Net interest income grew by 11.1% to Rs 4,514 crore on a 18% growth in advances. Net interest margin fell to 3.64% from 3.79% q-o-q. Gross non-performing assets (NPA) as a percentage of gross advances rose to 4.17% from 2.54% and net NPA climbed to 2.02% from 1.08% on sequential basis. During the quarter, the bank added Rs 8,772 crore (fresh slippages) to gross NPAs, a significant rise compared with Rs 3,638 crore added in previous quarter.

Bharti Airtel reported profit of Rs 1461 cr which was flat q-o-q but much better-than-estimates. Revenue slipped 3.5% q-o-q to Rs 24652 cr. Consolidated EBIDTA fell 1.3% y-o-y to Rs 9466 cr but margin expanded by 90 bps to 38.4%, expanding for the fourth straight quarter.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 40 points lower start for our market.

After rebounding from the important 8540-8500 support area, Nifty has been facing resistance near 8750 which we had indicated as important immediate resistance as 34-DMA as well as a trendline adjoining recent tops on the daily chart is placed there.

A gap down opening today would take Nifty close to immediate support of 8650, which is the immediate previous bottom on the hourly chart, upon breach of which 8595, the 61.8% retracement level fo the recent 8506-8737 upmove, would be the next downside target to eye.

HDFC, Hero MotoCorp, HUL and ITC will report their quarterly earnings today.

NIFTY RESISTED NEAR 8750 HURDLE; KEY EARNINGS IN FOCUS

NIFTY RESISTED NEAR 8750 HURDLE; KEY EARNINGS IN FOCUS

WORLD MARKETS                             

US indices climbed 0.4%-1% yesterday amid a plethora of corporate news, a rising dollar and falling oil prices. 3M and Boeing contributed the most gains.

US oil fell 0.7% to $50.52 a barrel and Brent lost 0.6% to $51.46 after Iran said it wanted to be exempt from an OPEC deal which would cut production. .

IHS Markit manufacturing index's flash read for October rose to 53.2 from a three-month low of 51.5 hit in September.

Dollar index inched up to 98.75 from 98.63.

European markets, except a half a percent lower FTSE, gained 0.4%-1.3%.

AT HOME

Benchmark indices ended with modest gains after a rangebound but choppy trading session. Sensex added 102 points to settle at 28179 while Nifty finished at 8709, up 16 points. BSE mid-cap index lost 0.1% but the small-cap index climbed half a percent. BSE Oil & Gas and Energy indices gained 1.7% and 1.2% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 1% and 0.9% respectively.

FIIs net sold stocks and stock futures worth Rs 325 cr and 335 cr respectively but net bought index futures worth Rs 155 cr. DIIs were net buyers to the tune of Rs 333 cr.

Rupee appreciated 4 paise to end at 66.85/$.

Idea Cellular disappointed with 58.5% q-o-q fall in net profit at Rs 91.4 cr. Revenue fell 2% to Rs 9300 cr partially led by voice minute decline and rest due to rate fall in mobile voice and data segment. Consolidated EBIDTA slipped 7.6% to Rs 2840 cr and margin contracted by 187 bps to 30.54%.

In a dramatic development, board of Tata Sons yesterday announced removal of Cyrus Mistry, who is at the helm of affairs for almost four years, from the Chairmanship of the group and appointment of Ratan Tata as the interim Chairman. New chairman will be elected in four months.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

While Nifty was rebounding after taking a support in 8540-8500 support zone, we have been pointing out that 8750-8800 is the immediate resistance area where 8750 is where 34-DMA as well as a trendline adjoining recent tops on the daily chart is placed while 8800 is the top made on the surgical strike day.

Yesterday, Nifty, after touching a high of 8737, retreated to end at 8709.

8750-8800 continues to be the immediate resistance area. Immediate support on the hourly chart has moved up to 8660, which should serve as the revised stop-loss for trading longs.

Bharti Airtel, HDFC Bank, Kotak Mahindra Bank, Axis Bank, Dr Reddy, Asian Paints, ZEEL and Adani Ports will report their quarterly earnings today.

NIFTY EXTENDS CONSOLIDATION; STAY LONG WITH THE STOP-LOSS OF 8600

NIFTY EXTENDS CONSOLIDATION; STAY LONG WITH THE STOP-LOSS OF 8600

WORLD MARKETS

                                                             

After a negative start, US indices saw a sustained northward move through the session to end mixed with Dow finishing 0.1% lower, S & P 500 ending flat while Nasdaq closed 0.3% higher.

IBM contributed the most losses, offsetting gains from McDonald's and Microsoft. Microsoft hit a new all-time high after posing better-than-expected results across the board. General Electric beat estimates on earnings but revenue was a miss. It also narrowed its 2016 earnings per share guidance.

Dollar index climbed to 98.63 fom 98.33, hitting a seven-month high. Chinese yuan hit its lowest level versus the U.S. currency dating back to 2010.

U.S. crude rose 0.43% to $50.8 per barrel. According to data from Baker Hughes, rig counts in the U.S. rose by 11 to 443, marking the 17th straight week without a cut.

European markets endex mixed with modest changes. Euro fell to a seven-month low of 1.0873 from 1.0929 per dollar following Mario Draghi's refusal on Thursday to give any legs to recent speculation policymakers may opt to begin tapering of the bank's 1.7 trillion-euro asset purchase program in the near-term.

For the week, Dow ended flat, S & P 500 added 0.4% while Nasdaq gained 0.8%. In Europe, FTSE was up 0.1%, DAX climbed 1.2% and CAC added 1.5%. Among Asian markets, Shanghai rose 0.9%, Hang Seng was up 0.6% while Nikkei soared 2%.

AT HOME

After falling about half a percent, benchmark indices recouped most of the losses in last hour to end just marginally lower. Sensex settled at 28077, down 53 points while Nifty lost 6 points to finish at 8693. BSE mid-cap and small-cap indices however added 0.3% and 0.1% respectively. BSE Consumer Durable and Energy indices fell 1.7% and 0.8% respectively, becoming top losers among the sectoral indices while Realty and IT indices were the top gainers, putting on 0.9% and 0.7% respectively.

FIIs net sold stocks and stock futures worth Rs 273 cr and 268 cr respectively but net bought index futures worth Rs 24 cr. DIIs were net buyers to the tune of Rs 500 cr.

Rupee depreciated 8 paise to end at 66.89/$.

For the week, Sensex and Nifty gained 1.4% and 1.3% respectively.

HCL Tech reported good set of earnings. Dollar revenue rose 1.8% to USD 1772 mn and rupee revenue was up 1.6% at Rs 11519 cr. Constant currency revenue growth stood at 2.8%. Net profit fell 1.9% to Rs 2015 but was better-than-expected. The company has reiterated its FY17 constant currency guidance at 12-14% and EBIT guidance to 19.5-20.5%.

ACC disappointed on all counts. Topline fell 10% to Rs. 2521 cr. Net profit fell 29% to Rs 82 cr. Volumes were down 9.6% y-o-y at 5.07 mn tones. EBIDTA per tonne fell 6% to Rs. 443. Realizations were down 1%.

Wipro reported earnings which slightly beat estimates but guidance was a miss. Dollar revenue fell 0.8% q-o-q to USD 1916 mn but grew 0.9% in constant currency terms which was at the higher side of the 0-1% guidance range. EBIT margin remained unchanged at at 17.8%. The company guided for a 0-2% revenue for for October-December quarter, which was lower than expectations of 1-3% growth.

OUTLOOK

Today morning, Asian markets are trading mixed with changes of upto half a percent on both the sides and SGX Nifty is suggesting a flattish start for our market.

8750-8800 continues to be important hurdle area as 8750 is where 34-DMA as well as a trendline adjoining recent tops on the daily chart are placed while 8800 is the top made on the surgical strike day.

8600 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.

Axis Bank and Idea will report their quarterly earnings today.

8600 CONTINUES TO BE IMMEDIATE SUPPORT; 8750-8800 TARGET AREA

8600 CONTINUES TO BE IMMEDIATE SUPPORT; 8750-8800 TARGET AREA

WORLD MARKETS                             

US indices fell 0.1%-0.2% yesterday, digesting a sharp fall in oil prices, key U.S. economic data and a key European Central Bank decision on interest rates.

After hitting a 15-month high on Wednesday, US oil fell 2.3% yesterday to settle at $50.43 per barrel. Brent lost 2.5% to $51.38.

Economic data was mixed. Existing home sales rose 3.2% last month to 5.47 million, their highest since June. Leading indicators for September rose 0.2%. Weekly jobless claims rose by 13,000 to 260,000, but notched their 85th straight week coming in below 300,000, the longest period since 1970. The Philadelphia Federal Reserve Business Index for October came in at 9.7, below September's 12.8.

Travelers beat estimates on both earnings and revenues, while Verizon missed on revenue while beating on profits. American Express surged 9% after reporting better-than-expected results. EBay dropped 11%, despite beating Street estimates, after lowering its earnings guidance for the fourth quarter.

Dollar index rose to a more than seven month high of 98.32, up from previous day's 97.85. Gold fell $2.40 to $1267.50 per ounce.

The ECB kept interest rates unchanged, as was widely expected. ECB President Mario Draghi said that, while extending the central bank's current QE program beyond its March 2017 deadline was not discussed at this meeting, he did say the central bank will preserve very substantial amount of monetary policy support.

European markets gained between 0.1%-1.2%

AT HOME

After rising about eight tenth of a percent in the initial trade, benchmark indices gave away some of the gains through the session to end higher by about half percent. Sensex added 145 points to settle at 28130 while Nifty finished at 8699, up 40 points. BSE mid-cap and small-cap indices gained 0.1% and 0.5% respectively. BSE Bankex and Metal indices climbed 1.4% each, becoming top gainers among the sectoral indices while Healthcare and IT indices were the top losers, down 0.4% and 0.25% respectively.

FIIs net bought stocks and stock futures worth Rs 7 cr and 589 cr respectively but net sold index futures worth Rs 396 cr. DIIs were net buyers to the tune of Rs 583 cr.

Rupee depreciated 14 paise to end at 66.81/$.

Yes Bank reported better-than-expected quarterly results with net profit rising 31% y-o-y to Rs 802 cr. NII grew 30.5% to Rs 1446 cr. Asset quality was stable with gross non-performing assets as a percentage of gross advances rising 4 basis points to 0.83% QoQ. Net NPA was unchanged at 0.29%.

Earnings of Reliance Industries beat estimates on all counts supported by strong performance in Petchem segment. Standalone net profit rose 17.9% y-o-y to Rs 7704 cr. Revenue fell 0.3% to Rs 64344 cr. Gross Refining Margin stood at $10.10 a barrel against $11.50 q-o-q and $10.60 y-o-y. Petchem revenue grew 7.3% to Rs 21293 cr. Segment EBIT rose 38% and margin expanded by 370 bps to 16.3%. Refining revenue rose 1.1% to Rs 51838 cr with EBIT rising 9.3% and margin expanding 90 bps to 11.4%.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Just to reiterate after Nifty took out immediate hurdle of 8630, we have been working with a target area of 8770-8800.The benchmark touched a high of 8727 before closing at 8699, moving closer to the above mentioned target.

8750-8800 continues to be important target as well as resistance area to eye as 34-DMA as well as a downward sloping trendline adjoining recent tops on the daily chart are palced around 8750 while 8800 is the top made on the surgical strike day.

8600 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.

HCL Tech, ACC, Wipro and Cairn India will report their quarterly earnings today.

STAY LONG WITH THE STOP-LOSS OF 8600

STAY LONG WITH THE STOP-LOSS OF 8600

WORLD MARKETS                             

Dow and S & P 500 gained 0.2% each while Nasdaq inched up 0.05% helped by better-than-expected earnings and rising oil prices.

US crude soared 2.6% to $51.60 and Brent added 1.9% to $52.67 as data from the U.S. Energy Information Administration showed crude stocks fell 5.2 million barrels in the week ended October 14, as against market expectations for a 2.7-million barrel build.

Federal Reserve's Beige Book, which summarizes economic conditions in the country, said economic activity in the U.S. rose at a modest pace in most regions. Housing starts fell 9% last month, but permits spiked 6.3%. Mortgage applications rose 0.6% last week.

Morgan Stanley, Abbott Labs and BB&T beat their earnings per share and revenue expectations.

European markets gained upto a percent.

AT HOME

Benchmark indices ended lower by about a fourth of a percent after a choppy session, consolidating huge gains made yesterday. Sensex lost 66 points to settle at 27984 while Nifty finished at 8659, down 19 points. BSE mid-cap and small-cap indices however gained 0.1% and 0.6% respectively. FMCG and Realty indices Benchmark fell 1.1% and 0.9% respectively, becoming top gainers among the sectoral indices while Utilities and Power indices rose 1.2% each, becoming top gainers.

FIIs net sold stocks and index futures worth Rs 283 cr and 112 cr respectively but net bought stock futures worth Rs 111 cr. DIIs were net buyers to the tune of Rs 725 cr.

Rupee appreciated 5 paise to end at 66.67/$.

No agreement was reached on GST rate but an agreement appeared possible on imposing a cess on ultra-luxury and demerit goods to compensate states for potential revenue loss on the second day of the meeting of GST Council. The Council will now meet on November 3-4.

OUTLOOK

Today morning, Asian markets, except a marginally lower Shanghai are trading with gains of upto a percent with Nikkei on the top and SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had mentioned that having crossed immediate hurdle of 8630, next target area to watch out for Nifty is 8770-8800 where 8770 is where the trendline adjoining major recent tops on the daily chart is placed while 8800 is the top made on the surgical strike day.

The benchmark, after touching a high of 8699, eased to end at 8659 but is set to open higher today.

8770-8800 continues to be upside target/hurdle area to eye. 8600 continues to be immediate support, with the stop-loss of which trading longs can be held on to.

Reliance Industries and Yes Bank will report their quarterly earnings today.

ECB, in its monetary policy review scheduled today, is expected to keep interest rates and an 80-billion-euro per month bond buying program unchanged. However, ECB President Mario Draghi will likely emphasize the continued need for monetary stimulus, reinforcing expectations for an extension of the ECB's asset buys beyond its scheduled end next March.

8770 IS THE NEXT TARGET; 8600 IMMEDIATE SUPPORT

8770 IS THE NEXT TARGET; 8600 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.4%-0.8% yesterday helped by stronger-than-expected quarterly reports and after mixed inflation data. Healthcare and Materials were the lead the gains.

Earnings from Goldman Sachs, Johnson & Johnson, Netflix and UnitedHealth came in better-than-estimates.

Consumer Price Index rose 0.3%, meeting expectations. However, core CPI rose just 0.1%, missing expectations.

US crude rose 0.7% to $50.29 per barrel. Gold gained $6 to $1263 an ounce.

European markets climbed 0.8%-2%. Mining stocks surged on the back of weaker dollar and a solid uptick in metal prices. British Pound rose approximately 1% against the greenback following stronger-than-expected U.K. inflation data and reports that parliament may need to ratify any deal to exit the European Union, helping to ease concerns of a "hard Brexit."

AT HOME

After a positive start, benchmark indices kept on moving higher through the session and ended with hefty gains of just under two percent, registering the biggest single day gain since 25th May. Sensex soared 521 points to settle at 28051 while Nifty finished at 8679, up 158 points.  BSE mid-cap and small-cap indices added 1.9% and 1.3% respectively. All the BSE sectoral indices closed in green with Finance Index and Bankex leading the tally, up 2.6% and 2.4% respectively.

FIIs net bought stocks and stock futures worth Rs 345 cr and 1223 cr respectively but net sold index futures worth Rs 730 cr. DIIs were net buyers to the tune of Rs 173 cr.

Rupee appreciated 17 paise to end at 66.72/$.

Three day meeting of the GST Council began yesterday and agreed on a formula to compensate states in case of a revenue loss after moving to the new system. The council will now discuss the tax rates, the most contentious issue, today and tomorrow.

Minutes of the first Monetary Policy Committee meeting revealed that, the six-member body, headed by new RBI governor Urjit Patel, unanimously voted for a 25 basis point cut in RBI’s key lending rate—the repo rate—to 6.25%, arguing that large underutilised capacities and good summer rains will likely keep inflation low in the near future.

OUTLOOK

China's third-quarter GDP growth has come in at 6.7%, which is unchanged from previous quarter and in-line with estimates. September retail sales are up 10.7%, up from forecast and previous reading of 10.6%. However September industrial output growth has eased to 6.1% from previous reading of 6.3% and forecast of 6.4%.

Asian markets are trading flat to modestly higher and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had mentioned that the 8506 bottom made on Monday roughly coincides with the 100-DMA placed around 8500 and a positive divergence was formed on the hourly chart which suggested that there was a possibility of some pullback. We had also said that 8630 is the immediate hurdle on the hourly chart.

Nifty yesterday soared 158 points to settle at 8679, crossing the 8630 hurdle decisively.

Next target/hurdle on the way up would be about 8770-8800 where 8770 is where the trendline adjoining major recent tops on the daily chart is placed while 8800 is the top made on the surgical strike day.

Immediate support on the hourly chat is placed around 8600, with the stop-loss of which, trading longs can be held on to.

100 DMA LANDS SUPPORT NEAR 8500; 8625 IS THE IMMEDIATE HURDLE

100 DMA LANDS SUPPORT NEAR 8500; 8625 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell three tenth of a percent, digesting fall in oil, a number of corporate results, key economic data and remarks from a key Federal Reserve official.

Weighed by a rising rig count in the United States, WTI and Brent oil fell 0.8% each to settle at $49.94 and 51.52 per barrel respectively.

Fed Vice Chair Stanley Fischer warned of the dangers of low interest rates, suggesting they could lead to longer and deeper recessions, making the economy more vulnerable.

Industrial production rose 0.1% in September, slightly below a consensus estimate of 0.2%. The New York Fed's Empire State index slipped to its lowest level since May, with the October reading coming in at -6.8.

Bank of America, Hasbro and Netflix posting better-than-expected results

European markets, except a 0.2% higher Italy, fell 0.3%-0.9%.

AT HOME

Sensex and Nifty fell 0.5% and 0.7% respectively to close at the lowest level since 8th July and 21 July respectively. Sensex settled at 27530, down 144 points while Nifty lost 63 points to finish at 8520. BSE mid-cap and small-cap indices fell 1% and 0.5% respectively. BSE Auto index tumbled 2.1%, becoming top loser among the sectoral indices, followed by 1.8% each cut in Consumer Discretionary Goods and Telecom indices.

FIIs net sold stocks and index futures worth Rs 457 cr and 1032 cr respectively but net bought stock futures worth Rs 1101 cr. DIIs were net buyers to the tune of Rs 236 cr.

Rupee depreciated 19 paise to end at 66.89/$.

Ultratech's bottomline and topline beat expectations but operating profit margin disappointed. The company registered a 31.5% y-o-y growth in standalone profit at Rs 601 crore for the quarter ended September 2016, driven by other income and operational performance despite degrowth in revenue and higher tax expenses. Revenue declined 2.2% to Rs 6,196 cr. Sales volume during the quarter increased 1% to 11.18 million tonnes YoY while sales realisation fell 3% to Rs 4,829 per tonne. Operating profit jumped 17.6% to Rs 1,155 crore and margin expanded by 310 basis points to 18.6%. 

OUTLOOK

Today morning, Asian markets are trading with gains of upto 0.6% and SGX Nifty is suggesting about 40 points higher start for our market.

Nifty yesterday fell 63 points to finish at 8520, closing below the important support of 8540 but is set to open with a positive gap of about 40 points today.

Yesterday, Nifty made a low of 8506, which roughly coincides with the 100-DMA placed around 8500. Moreover, a positive divergence was formed on the hourly chart yesterday which suggested that there is a possibility of some pullback and that is what is likely to happen today, at least at the open.

Therefore, one would have to wait for the breach of 8506, the low made yesterday, for taking fresh bearish view. Next meaningful support to eye in that case would be about 8300.

On the way up, immediate resistance on hourly chat has moved lower to 8625, with the stop-loss of which existing short positions can be held on to.

8540 CONTINUES TO BE CRUCIAL SUPPORT; 8700 IMMEDIATE HURDLE

8540 CONTINUES TO BE CRUCIAL SUPPORT; 8700 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow rose 0.2% while S & P 500 and Nasdaq ended almost flat on Friday, digesting commentary from key Federal Reserve officials, strong bank earnings and U.S. economic data.

Fed Chair Yellen, in a speech, said the Fed might want to let inflation run hotter for a while. She pointed out that the economy has seen an unusual tendency of weak demand against strong supply, making it reasonable "to ask whether it might be possible to reverse these adverse supply-side effects by temporarily running a 'high-pressure economy,' with robust aggregate demand and a tight labor market." New York Fed President William Dudley said "I would expect this year" for the Fed to raise rates. Boston Fed President Eric Rosengren said interest rates should go up because the economy was close to reaching full employment and its 2% inflation target.

Dollar index climbed to 98.10 from 97.55, the highest level in more than seven months.

JPMorgan Chase, Wells Fargo and Citigroup all posted better-than-expected results, beating estimates on both top and bottom lines.

In economic news, U.S. retail sales rose 0.6% in September, matching expectations. Producer price index increased 0.3% after being unchanged in August. Business inventories rose 0.2% in August. October consumer sentiment came in at 87.9, well below an estimate of 92, as concerns over the U.S. presidential election weighed.

US oil settled 0.2% lower at $50.35 per barrel.

Earlier data showed that September producer prices in China unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations for the first time in almost five years, offsetting the negative sentiment generated yesterday by poor export data from the mainland.

European markets climbed 0.5%-2% on the back of a strong rally in banks and better-than-expected inflation data from China.

For the week US indices lost 0.6%-1.5%, extending the losing streak to second consecutive week. In Europe FTSE lost -0.4% while Dax and CAC rose 0.8% and 0.5% respectively. In Asia, Shanghai climbed 2%, Nikkei closed flat but Hang Seng tumbled 2.6%.

AT HOME

Benchmark indices ended modestly higher after a range bound but choppy trading session on Friday. Sensex settled at 27674, up 31 points while Nifty added 10 points to finish at 8583. BSE mid-cap and small-cap indices gained 0.8% each. BSE Oil & Gas index soared 2.2%, becoming top gainers among the sectoral indices, followed by 1.6% rise in Energy index. Telecom and Teck indices were the top losers, giving away 0.8% and 0.7% respectively.

Rupee appreciated 23 paise to end at 66.70/$.

For the week, Sensex and Nifty lost 1.4% and 1.3% respectively.

Infosys reported better-than-expected quarterly earnings but cut the full year guidance more than estimates. Dollar revenue rose 3.4% q-o-q to USD 2587 mn while rupee revenue was up 3.14% at Rs 17310 cr. In constant currency terms, revenue rose 3.9%. Net profit grew 4.9% to Rs 3606 cr. The company reduced revenue guidance for FY17 to 8-9% from 10.5-12% earlier in constant currency terms.

Wholesale inflation eased to 3.57% in September from 3.74% in August.

Petrol price was hiked by Rs 1.34 a litre, the fifth increase in two months, and diesel by Rs 2.37 a litre on back of spike in global rates.

OUTLOOK

Today morning, Asian markets are trading with cuts of upto 0.8% and SGX Nifty is suggesting about 40 points lower start for our market.

In Friday's report we had mentioned that "8540 is the bottom of the long consolidation phase witnessed earlier in August and also coincides with the 20-week moving average and hence is an important support to eye. A decisive breach of 8540 would open up the space for a larger correction and nearest support to eye in that case would be around 8300, the top made in June this year."

Nifty, after touching a low of 8550, recovered to close at 8583 on Friday but a lower opening today would take the benchmark back in the vicinity of 8540 support.

8540 continues to be important support to eye. On the way up 8700 continues to be immediate hurdle above which 8800 would be the bigger resistance to eye.

Traders are advised to wait for the close below 8540 for taking fresh bearish view. Existing short should carry a stop-loss of 8700.

Ultratech Cement will report its quarterly earnings today.

NIFTY ACHIEVES 8555 TARGET; 8700 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 8555 TARGET; 8700 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

After opening sharply lower, US indices recovered more than half a percent from the session lows to end with cuts of 0.25%-0.5%, digesting weak data out of China and rising oil prices while assessing the possibility of a Federal Reserve rate hike.

US oill rose 0.5% to $50.44 and Brent added 0.4% to $52.03 a barrel. The U.S. Energy Information Administration data showed crude stocks increased 4.9 million barrels in the week ended on October 7, well above forecast of a 700,000-barrel rise. However distillates, which include diesel and heating oil, fell 3.7 million barrels and gasoline declined 1.9 million barrels.

Earlier, data showed China exports tumbled 10% last month in dollar terms, while imports fell 1.9%.

In U.S. economic news, weekly jobless claims held at a 43-year low, while import prices rose less than expected in September.

Dollar index fell 0.4% to 97.55.

European markets lost 0.7%-1.2% with mining stocks leading the losses following weak china trade data.

AT HOME

After a negative start, benchmark indices kept on moving lower through the session and ended with deep cuts of 1.6% with Sensex and Nifty closing at the lowest level since 11th July and 4th August respectively. Sensex plunged 439 points to settle at 27643 while Nifty finished at 8573, down 135 points. BSE mid-cap and small-cap indices lost 1.5% AND 1.4% respectively. Except a 0.2% higher IT index, all the sectoral indices ended in red with Finance index and Bankex leading the losses, down 2.2% each.

FIIs net sold stocks, index futures and stock futures worth Rs 912 cr, 2330 cr and 52 cr respectively. DIIs were net buyers to the tune of Rs 679 cr.

Rupee depreciated 40 paise to end at 66.93/$.

India’s retail inflation stood at 4.31% in September, its slowest pace in 13 months.

TCS disappointed significantly on revenue front but surprised positively on margins and bottomline. Dollar revenue rose just 0.3% q-o-q to USD 4374 mn and constant currency revenue growth stood at 1%. In rupee terms, revenue slipped 0.1% to Rs 29284 cr and net profit rose 4.3% to Rs 6317 cr. EBIT grew 3.7% to Rs 7617 cr and margins stood at 26%, up 90 bps.

N Chandrasekaran, company CEO and MD said that it has been an ‘unusual Q2’ for TCS as growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter. "In additional, volatility in markets like India and Latin America also muted revenue growth.

OUTLOOK

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

In yesterday's report we had mentioned that 8690-8650 is the immediate support area for Nifty and a breach of 8650 would open up the possibility of the retest of the 8555 bottom made on 30th September.

The benchmark broke 8650 support in the initial trade itself and plunged all the way to 8541 before closing at 8573, achieving the target mentioned above and vindicating our view.

Now readers would recall that 8540 is the bottom of the long consolidation phase witnessed earlier in August and also coincides with the 20-week moving average and hence is an important support to eye. A decisive breach of 8540 would open up the space for a larger correction and nearest support to eye in that case would be around 8300, the top made in June this year.

On the way up 8700 is the immediate hurdle on teh hourly chart.

Traders should wait for the breach of 8540 for taking a fresh negative view.

Infosys will report its quarterly earnings today and is expected to show a dollar revenue growth of 2.3% at USD 2559 mn. In rupee terms revenue may increase 2.2% to Rs 17150 cr and profit is likely to rise 1.8% to Rs 3500 cr. EBIT margin is seen at 24.4% vs 24.1%. The company is expected to lower its constant currency growth guidance to 8.5%-10% from 10.5%-12%. Also will be watched commentary on BFSI growth, attrition and deal win momentum.