NIFTY EXTENDS CONSOLIDATION; 10495 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY EXTENDS CONSOLIDATION; 10495 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Dow and S & P 500 fell 0.8% each while Nasdaq tumbled 1.3% on Friday as Apple tumbled and interest rates rose.

Apple shares fell 4.1% after Morgan Stanley said the company's iPhone sales for the June quarter will disappoint Wall Street. General Electric rose 4% after reporting quarterly earnings and revenue that beat expectations and reaffirming its outlook for the rest of 2018. Honeywell also posted stronger-than-expected earnings.

10-year yield reached 2.96% — its highest level since 2014 — while the two-year yield rose to its highest level in a decade.

US oil, after falling to $67.50 on a tweet by Trump suggesting that OPEC is keeping oil prices artificially high, rebounded to settle 9 cents higher at $68.38 a barrel.

European markets, except a 0.2% lower DAX, gained 0.2%-0.5%.

Talking about the whole week, US indices, after gaining more than 2%, slipped towards the end of the week to settle just half a percent higher. European markets gained 0.8%-1.8%. In Asia, Nikkei climbed 1.8% but Hang Seng and Shanghai slipped 1.3% and 2.8% respectively.

North Korean leader Kim Jong Un declared that he will suspend nuclear and missile tests starting Saturday and that he will shut down the site where the previous six nuclear tests were conducted.

AT HOME

After falling about a third of a percent in first half, benchmark indices recouped all the losses later to end little changed. Sensex settled 12 points lower at 34415 while Nifty finished at 10564, down 1 point. BSE mid-cap index fell 0.4% while small-cap index ended flat. BSE IT and Teck indices soared 4.8% and 3.9% respectively, becoming top gainers among sectoral indices while Utilities index was the top loser, down 1.2%, followed by 1.1% lower Realty index.

FIIs net sold stocks and stock futures worth Rs 21 cr and 425 cr respectively but net bought index futures worth Rs 200 cr. DIIs were net buyers to the tune of Rs 111 cr.

Rupee depreciated 45 paise to end at 66.11/$, a thirteen-month low.

HDFC Bank reported 20% rise in net profit at Rs 4799 cr. Loan growth stood at 18.7% while other income rose 32%. NII grew 18% to Rs 10658 cr. Gross NPA ratio rose to 1.30% from 1.29% while Net NPA ratio improved to 0.40% from 0.44% q-o-q.

Indiabulls Housing posted 22.6% rise in consolidated net profit at Rs 1030 cr. NII was up by 22.2% to Rs 1662 cr. Gross and Net NPA ratio improved to 0.77% and 0.34% from 0.85% and 0.36% respectively. Loan growth was 33.3%.

OUTLOOK

Today morning, Asian markets are trading with modest cuts and SGX Nifty is suggesting about 30 points lower start for our market.

Nifty, after achieving the 50% retracement level of the entire 11171-9951 fall placed at 10560 on Tuesday is in a consolidation mode for last three sessions. The benchmark closed at 10564 on Friday and is set to open below 10550 today.

10495 continues to be immediate support, a breach of which will generate a "sell" on the hourly chart and would pave the way for further correction.

On the way up, 10630, in the vicinity of coupled of tops made in February are placed, is the immediate upside target to eye. Once that is taken out 10705, the 61.8% retracement level of the entire 11171-9951 fall, would be the next important target as well as resistance to eye.

Meanwhile, traders are advised to hold long positions with the stop-loss of 10495.