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.