NIFTY REBOUNDS AFTER ACHIEVING 10250 TARGET; 10400 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 10250 TARGET; 10400 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

While Nasdaq ended flat, Dow and S & P 500 fell 0.2% and 0.1% respectively on Friday to extend Thursday's losses as Healthcare and energy stocks fell.

Brent crude fell 41 cents to $63.52 a barrel and U.S. West Texas Intermediate crude settled 43 cents lower at $56.74.

European markets fell 0.4%-0.7%

For the week, Dow and S & P 500 fell -0.3 and 0.1% respectively to sanp 8-week winning streak. Nasdaq fell 0.2% to break six-week rising streak. In Europe FTSE fell 0.1% but Dax soared 1.9% and CAC added 0.4%. In Asia Nikkei climbed 1.9% while Hang Seng and Shanghai rose 0.6% and 0.2% respectively.

Eleven countries have agreed on "core elements" in a regional trade pact from which the U.S. pulled out earlier this year. Japan has led talks for the trade deal, called the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), since the U.S. withdrew.

Saudi Arabia has called for an urgent Arab League minsterial meeting to discuss Iran's role in the region. The meeting, which comes on the back of elevated tensions, is expected to be held in Cairo.

AT HOME

Benchmark indices ended with modest gains after a choppy trade, extending the winning streak to second consecutive day. Sensex added 64 points to settle at 33315 while Nifty finished at 10322, up 13 points. BSE mid-cap index fell 0.1% while small-cap index gained 0.1%. BSE Capital Goods and Consumer Durable indices were the top gainers among sectoral indices, rising 1.9% and 1.4% respectively while Energy and Healthcare indices were the top losers, down 1.4% and 0.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 529 cr, 1785 cr and 125 cr respectively. DIIs were net buyers to the tune of Rs 1921 cr.

Rupee depreciated 23 paise to end at one-month low of  65.17/$.

For the week, Sensex and Nifty lost 1.1% and 1.2% respectively, breaking two-week winning streak.

Providing a big relief to India Inc and consumers alike, the GST Council decided on Friday to lower the tax rate on 178 items, leaving just 50 items in the top 28 per cent rate slab under the Goods and Services Tax.

Additionally, in a further relaxation to small and medium enterprises, which were facing a huge compliance burden under GST, the Council has decided to increase the threshold for the compositon scheme to an annual turnover of ₹1.5 crore. A uniform tax rate of 1 per cent will be levied under the scheme, which allows for quarterly filing of returns and payment of taxes. Eligible manufacturers with service activities with an annual turnover of up to ₹5 lakh will also be allowed in the scheme.

L & T reported better-than-expected 27% rise in September quarter net profit at Rs 1820 cr but said it won't be able to meet its order inflow guidance of a growth of 12-14% in FY18. Revenue grew by 5.7% to Rs 26447 cr. EBIDTA jumped 28% to Rs 2960 cr and margin expanded by 190 bps to 11.2%.

SBI reported 38% dip in September quarter net profit at Rs 1582 cr on higher provisions but asset quality improved on lower slippages. NII grew by 27.3% to Rs 18586 cr. Fresh slippages stood at Rs 9026 cr Vs Rs 26249 cr in the previous quarter.

M & M reported better-than-expected 22% rise in net profit at Rs 1411 cr. Revenue rose 19.4% to Rs 12018 cr. EBITDA soared 35.1% to Rs 1,923.4 cr while the operating margin rose 190 bps to 16%.

OUTLOOK

Today morning, Nikkei is down about half a percent while Hang Seng and Shanghai are up nearly a third of a percent. SGX Nifty is suggesting a marginally higher start for our market.

Readers would recall that we had given a downside target of 10250 after immediate support of 10380 was taken out. Nifty, on Friday, touched a low of 10254, nearly achieving this target and vindicating our view.

10250, the top made in mid-October, continues to be immediate support to eye. If that breaks, 10180, the 38.2% retracement level of the 9690-10490 upmove, would be the next important support to eye.

10400 continues to be immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 10490 would be the next upside target.

This makes 10400-10250 immediate range, a crossover of which, on either side, is required for taking a fresh view.