10630, 10700 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 10495

10630, 10700 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 10495

WORLD MARKETS

Dow, weighed down by IBM, fell 0.2% but S & P 500 and Nasdaq ended with modest gains on the back of some strong corporate earnings.

Rail transportation company CSX and United Airlines also posted better-than-expected results. Morgan Stanley reported a record profit and revenue for the first quarter.

IBM nosedived 7.5% despite reporting earnings and revenue that topped expectations as forward-looking guidance disappointed.

The Federal Reserve said in the latest Beige Book the U.S. economic outlook remains positive, but noted that steel prices are rising due to tariffs.

US oil jumped 2.9% to $68.47 a barrel, its strongest levels since late 2014 on data that showed a drop in U.S. crude inventories. Brent rose 2.7% to $73.48.

In Europe, DAX ended flat while FTSE soared 1.3% and CAC rose 0.5%. Auto stocks fell after data showed European car registrations fell 5.2%. The British pound fell on the back of March U.K. inflation coming in at a one-year low of 2.5% in March, down from 2.7% in February. Eurozone inflation came in at 1.3%, an increase from the previous month, but lower than estimates.

AT HOME

After gaining just under half a percent, benchmark indices saw a sharp dip in late noon trade to end with modest cuts, breaking the nine-day gaining streak. Sensex settled at 34331, down 63 points while Nifty lost 22 points to finish at 10526. BSE mid-cap and small-cap indices fell 0.1% and 0.4% respectively. BSE Consumer Durable index tumbled 1.2%, becoming top loser among sectoral indices, followed by 0.8% lower Bankex and Energy indices. FMCG index soared 1.6%, becoming top gainer, followed by 0.5% higher Telecom and Realty indices.

FIIs net sold stocks and stock futures worth Rs 916 cr and 188 cr respectively but net bought index futures worth Rs 2320 cr. DIIs were net buyers to the tune of Rs 870 cr.

Rupee depreciated 2 paise to end at 65.66/$.

Defending the Reserve Bank of India’s (RBI) norms on resolution of banks’ non-performing assets (NPAs), announced in February, RBI Deputy Governor N.S. Vishwanathan said these are outcome-oriented and provide banks the flexibility on deciding the contours of resolution. As per the RBI’s revised framework on NPAs, banks are required to classify even a day’s delay in paying loan installments as a default.

OUTLOOK

Today morning, Shanghai is little changed but Hang Seng and Nikkei are up 0.8% each. SGX Nifty is suggesting about 40 points higher start for our market.

After Nifty achieved 10420 and 10560 targets, we had given next target of 10700, which is the 61.8% retracement level of the entire 11171-9951 fall. Nifty yesterday touched a high of 10594 before closing at 10538 and is set to open above 10550 today.

10700 continues to be next major target as well as resistance to eye. Before that 10630, in the vicinity of couple of tops were made in February, will be the immediate hurdle to eye.

Immediate support on the hourly chart has moved up to 10495, with the stop-loss of which, existing longs should be held on to.

TCS and Indusind Bank will report their quarterly earnings today.