GLOBAL SELL-OFF IN EQUITIES; 10400, 10200 NEXT SUPPORTS FOR NIFTY

GLOBAL SELL-OFF IN EQUITIES; 10400, 10200 NEXT SUPPORTS FOR NIFTY

WORLD MARKETS

US markets nosedived 3.8%-4.6% with the Dow and S & P 500 giving back all of their 2018 gains and S & P 500 suffering worst fall in more than six years on persisting worries over rising interest rates. Dow and Nasdaq fell the most since June 2016 and August 2017.

Benchmark 10-year yield rose to 2.88%, its highest in four years, before trading around 2.75%.

Dollar index rose about half a percent to 89.63. Oil fell with WTI down 2% at $64.15 and Brent down 1.4% at $67.62 a barrel.

European markets fell 0.8%-1.6%.

AT HOME

After falling more than a percent and half at the open, benchmark indices nearly half of the losses through the session to end lower by nine tenth of a percent. Sensex settled at 34757, down 310 points while Nifty lost 94 points to finish at 10666. BSE mid-cap and small-cap indices outperformed, falling just 0.1% and 0.4% respectively. BSE Capital Goods and Finance indices tumbled 2.6% and 1.5% respectively, becoming top losers among the sectoral indices while Telecom and Auto indices were the top gainers, up 1.7% and 0.7% respectively.

FIIs net sold stocks and index futures worth Rs 1264 cr and 555 cr respectively but net bought stock futures worth Rs 597 cr. DIIs were net buyers to the tune of Rs 1164 cr.

Rupee depreciated 1 paise to end at 64.07/$. 10-year bond yield rose to 7.605% from 7.562%.

India's January Nikkei Services PMI improved to 51.7, up from 50.9 in December. Composite PMI however fell to 52.5 from 53.

Tata Motors missed street estimates with consolidated profit of Rs 1215 cr, which was up nearly 11-fold y-o-y but down 51% q-o-q and much lower than market estimates. Revenue rose 16% to Rs 74156 cr. EBIDTA rose 80% to Rs 8671 cr and margins expanded 420 bps to 11.7%.

Colgate Palmolive reported better-than-expected 34% y-o-y growth in December quarter net profit at Rs 171 cr. Revenue rose 18.2% to Rs 1033 cr. Operating profit grew 32% to Rs 282 cr and margins expanded 280 bps to 27.3%.

OUTLOOK

Today morning, Asian markets are trading with deep cuts of 2%-5% with Nikkei leading the losses and SGX Nifty is suggesting about 300 points lower start for our market.

In yesterday's report we had mentioned that below 34-DMA support of 10700, 10600, the 50% retracement level of the 10033-11171 upmove since December bottom, will be the next important support to eye. Nifty, after touching a low of 10587 at the open, recovered to end at 10666 but is set to open around 10400 today.

Now 10400 is the level which coincides with 20-week moving average as well as the 67% retracement level of the 10033-11171 upmove seen since December bottom and hence a crucial support to eye. If 10400 is taken out decisively then 10200, where 34-week moving average is placed, would be the next crucial support to eye.

10700, the top made yesterday, which also coincides with 34-DMA, will now act as immediate hurdle, until the crossover of which, bias will continue to be negative.

Yesterday, we had advised booking some profit in short position around 10600. Remaining profit can be booked today between 10400-10300.

Hero Motocorp, Lupin and PNB will report their quarterly earnings today.