9075 IS THE IMPORTANT SUPPORT; 9200 IMMEDIATE HURDLE

9075 IS THE IMPORTANT SUPPORT; 9200 IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.1%-0.3% on Friday, digesting falling oil prices and comments from the Trump administration on tax reform and ahead of key French election.

Trump said his administration will unveil a "massive tax cut" in a new reform, though the timing of that package was unclear.

Energy stocks were under pressure as WTI crude fell 2.2% to $49.62 per barrel.

Uncertainty around the French election has grown over the past month after far-left candidate Jean-Luc Melenchon's surprising surge in the polls. Concerns over a victory from far-right candidate Marine Le Pen rose after a shooting in Paris. Le Pen has said repeatedly that, if she wins, she'd pull France out of the European Union and the euro zone.

In Europe, except a 0.2% higher DAX, other markets fell 0.1%-0.5%. The yield on the French 10-year bond bounced back from a three-month low to trade around 0.93 percent. Flash euro zone composite PMI came in at 56.7 in April, up from 56.4 in March.

For the week, US indices gained 0.5%-1.8%. In Europe, FTSE plunged 2.9% while CAC and DAX fell 0.2% and 0.5% respectively. In Asian Shanghai nosedived 3.1%, Hang Seng fell 0.9% but Nikkei gained 1%.

Geopolitical tensions in the Korean peninsula continued to ramp up over the weekend as Pyongyang indicated that it was prepared to sink a U.S. aircraft carrier to showcase its military prowess.

AT HOME

After opening with gains of about half a percent, benchmark indices nosedived seven tenth of a percent from the top of the day in noon trade to end lower by a fifth of a percent. Sensex settled at 29365, down 57 points while Nifty lost 17 points to finish at 9119. BSE mid-cap and small-cap indices however managed to end higher by 0.02% and 0.25% respectively. BSE Realty index soared 2.4%, becoming top gainer among sectoral indices, followed by 0.8% rise in Telecom and Energy indices. FMCG and Healthcare indices were the top losers, down 1% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 978 cr, 1238 cr and 91 cr respectively. DIIs were net buyers to the tune of Rs 1132 cr.

Rupee depreciated 3 paise to end at 64.6375/$.

HDFC Bank reported stable set of earnings. Net profit rose 18.2% to Rs 3990 cr despite a 90.5% y-o-y and 76% q-o-q rise in provisions at Rs 1262 cr.  NII grew 21.5% to Rs 9055. Loan growth stood at 19.4%. Gross NPA ratio remained unchanged sequentially at 1.05% while net NPA ratio rose 1 bps to 0.33%.

ACC reported 9% fall in quarterly profit at Rs 211 cr but sales rose 9% to Rs 3557 cr. Operating profit fell 5.7% to Rs 417 cr and margin contracted by 180 bps to 11.5%.Sales volume rose 3.8% to 6.6 million tonnes, growing for the first time after 3 quarters. Results were better than market expectation.

For the week, Sensex and Nifty lost 0.3% each, extending the losing streak to second straight week.

OUTLOOK

Early results from the French election showed Emmanuel Macron and Marine Le Pen advancing to a presidential runoff on May 7, avoiding the worst case outcome of a run-off between Le Pen and far-left Mélenchon. 

Owing to this, Euro jumped to a five-and-a-half month high of around $1.0935 against the dollar. US futures are up about 0.8%.

In Asia, Nikkei is up more than a percent but Shanghai is down nearly a percent. Other Asian markets are trading with modest gains and SGX Nifty is suggesting about 20 points higher start for our market.

For past many sessions, we have been mentioning that the 34-DMA, which was placed around 9080, was the important immediate support to eye. The benchmark tested this support last week by touching a low of 9075 on Wednesday and finished the week at 9119.

9075 continues to be important immediate support, a decisive breach of which would be negative for the short term trend. 9020-8970 would be the next support area if that happens.

9200 is the immediate hurdle on the hourly chart above which 9274, the top made early April, would be the next target to eye. 

Reliance Industries, Ultratech Cement and Indiabulls Housing will report their quarterly earnings today. Reliance will report its quarterly earnings after market hours. While net profit might slip marginally to Rs 8000 cr from previous quarter’s Rs 8022 cr on account of lower other income, operational performance is expected to be better. GRM’s might move up to $11 per barrel from 10.8. Details on Jio will be the focus area.