NIFTY SET TO CROSS 10252 HURDLE; 10380 NEXT

NIFTY SET TO CROSS 10252 HURDLE; 10380 NEXT

WORLD MARKETS                             

S & P 500 and Nasdaq rose 0.2% each while Dow surged 0.7% on the back of strong quarterly results from 3M, Caterpillar and United Technologies.

News reports suggested that House and Senate leaders laid out a schedule for drafting and releasing tax reform legislation in the next few weeks. Another media report suggested that House Republicans will unveil a tax bill on Nov. 1.

The flash U.S. Composite PMI rose to 55.7 in October, hitting a nine-month high. The Richmond Fed survey of manufacturing activity showed a slowdown in manufacturing activity in October.

Brent crude added 1.7% to settle at $58.33 a barrel and U.S. crude rose 1.1% to $52.47 after Saudi Arabia's energy minister had said cutting oil inventories to a five-year average was still a priority.

Main European markets ended marginally higher while Italy surged 1.1% and Spain gained 0.4%. Eurozone Composite PMI dropped to 55.9 in October, down from 56.7 in September.

AT HOME

Benchmark indices ended with modest gains to extend winning streak to second straight day. Sensex added 101 points to settle at 32607 while Nifty finished at 10208, up 23 points. BSE mid-cap and small-cap indices rose 0.2% and 0.6% respectively. BSE Power and Utlities indices climbed 1.3% each, becoming top gainers among sectoral indices while IT and Healthcare indices were top losers, down 0.8% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1307 cr, 1348 cr and 376 cr respectively. DIIs were net buyers to the tune of Rs 592 cr.

Rupee depreciated 5 paise to end at 65.07/$.

The government yesterday announced a Rs 2.11 lakh crore recapitalisation plan for public sector banks spread over two years in a bid to shore up their finances, boost private investment and revive the economy. Government will infuse Rs 1.35 lakh crore through recapitalisation bonds and Rs 76,000 crore through budgetary support and market raising.

Also approved was a mega infrastructure program which will cover 83,677 km of roads and will involve a capital expenditure of Rs 6.92 lakhs crore over the next 5 years. This includes Bharatmala Pariyojana (34800 km), Economic Corridors (9000 km), Inter Corridor and Feeder Route (6000 km), National Corridors Efficiency Improvement (5000 km), Border Roads and International Connectivity (2000 km), Coastal Roads and Port Connectivity (2000 km), Green field Expressways (800 km), National Highway Development (NHDP) works (10,000 km).

Infosys reported a beat on net profit but a cut in revenue guidance and no significant update on the CEO front were the negatives. Dollar revenue grew 2.9%q-o-q (2.2% in constant currency terms) to USD 578 mn. In rupee terms, revenue rose 2.9% to Rs 17567 cr and net profit rose 7% to Rs 3726 cr. The company cut full year constant currency revenue growth forecast to 5.5%-6.5% from earlier 6.5%-8.5%.

Asian Paints' net profit and margin surpassed market estimates. Net profit climbed 21% to Rs 576 cr y-o-y. Revenue rose 2.3% to Rs 4274 cr. EBIDTA rose 13.5% to Rs 801 cr and operating margin contracted to 18.8% from 19%.

HDFC Bank reported 20% y-o-y rise in net profit at Rs 4151 cr. Gross NPA ratio stood at 1.26%, up from 1.24% sequentially. Loan book grew 22.3% to Rs 6.05 lakh cr. NII rose 22% to Rs 9751 cr. Net interest margins dropped marginally to 4.3% from 4.4%.

Zee Entertainment Enterprises Ltd.’s posted better-than-estimated quarterly earnings driven by an exceptional gain on sale of its sports broadcast business. Net profit rose to Rs 591 cr from Rs 238 cr y-o-y. Revenue fell 6.7% to Rs 1582 cr. Advertising revenue rose 2.9% to Rs 987 cr while subscription revenue fell 14% to Rs 501 cr.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 75 points higher start for our market.

Readers would recall that we have been positive since 34-DMA hurdle placed at 9930 was taken out on 6th October. More recently, after the correction on the Muhurat trading day, we had asked to trail the stop loss to 10123 and had also said that once 20252, the top made on 17th October is taken out, 10380-10400 would be the next target area to eye.

Nifty yesterday closed at 10208 and is set to open around 10300 today. A crossover of the first hour high would mark a fresh breakout from last couple of days' consolidation and 10380-10400 would be the next target in that case.

Meanwhile 10123 continues to be immediate support, with the stop-loss of which, long positions should be held on to.

HCL Tech, HUL and Kotak Mahindra Bank will report their quarterly earnings today.