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.