NIFTY REBOUNDS FROM THE VICINITY OF 10565 SUPPORT

NIFTY REBOUNDS FROM THE VICINITY OF 10565 SUPPORT

WORLD MARKETS

US indices soared 0.9%-1.3% after recent fears about Italy faded. Financials rose on the back of this news and rise in interest rate while rebound in oil boosted energy stocks.

Media reports suggested that Italy's interim prime minister, who had been appointed by President Sergio Mattarella, said possibilities had surfaced "for the birth of political government".

The euro recovered much of its previous losses with a 1.1% climb against the dollar to $1.166. Italian bond yields, which spiked Tuesday, fell across the board Wednesday with the two-year bond yields down to 1.72% from 2.1%. The yield on the US benchmark 10-year Treasury note rose 7 bps to 2.84%.

Oil climbed on report that Saudi Arabia and other OPEC states aim to stick to a global pact on cutting oil supplies until the end of 2018. WTI rose $1.48, or 2.22% to $68.21/bbl. Brent rose $2.11, or 2.8%, to $77.50.

European markets, except a 0.2% lower CAC, gained 0.8%-2.1% with Italy on the top.

In Germany, the consumer price inflation surged to 2.2% in May, above the European Central Bank's target of below, or close to, 2%.  A euro area sentiment survey for May showed a fall to 112.5 from 112.7 in the previous month.

AT HOME

After falling about seven tenth of a percent in the morning, benchmark indices recouped most of the losses in noon trade to end just modestly lower. Sensex settled at 34906, down 43 points while Nifty lost 19 points to finish at 34906. BSE mid-cap index ended flat while small-cap index lost 0.2%. BSE Healthcare and Capital Goods indices fell 0.8% and 0.7% respectively, becoming top losers among the sectoral indices while Utilities and Power indices gained the most, up 0.2% each.

FIIs net sold stocks and index futures worth Rs 1287 cr and 832 cr respectively but net bought stock futures worth Rs 270 cr. DIIs were net buyers to the tune of Rs 492 cr.

Rupee appreciated 43 paise to end at 67.43/$.

MSCI Inc. yesterday said it is considering placing some emerging markets including India on notice for limiting investor access.

ONGC numbers were a miss. Net profit rose 18% q-o-q to Rs 5915 cr while EBIDTA fell 9% to Rs 11382 cr and operating margins were down 670 bps to 47.5%. Realisation per barrel of crude stood at $66.71, up from $60.58.

OUTLOOK

Today morning, Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 35 points higher start for our market.

In yesterday's report we had said that "the immediate support on the hourly chart is placed at 10565, a breach of which will generate a "Sell" on the hourly chart and pave the way for further correction".

Yesterday, Nifty, after touching a low of 10558, rebounded to end at 10614 and is set to open around 10650 today. 10717, the top made Tuesday, is the immediate hurdle to eye. 10558, the bottom made yesterday, is the immediate support, a breach of which will confirm a "Sell" on the hourly chart and would pave the way for further correction.

India's March quarter GDP data will be released today and is expected to show a growth of 7.4%, up from 7.2% in the previous quarter.

NIFTY RETREATS FROM THE VICINITY OF 10735 HURDLE; 10565 IS THE IMMEDIATE SUPPORT

NIFTY RETREATS FROM THE VICINITY OF 10735 HURDLE; 10565 IS THE IMMEDIATE SUPPORT

WORLD MARKETS

US indices plunged 0.5%-1.6%, extending the fall to third straight day, amid political turmoil in Italy and Spain and ongoing difficult trade talks with China.

The White House said in a statement that the United States will release a list of some $50 billion worth of Chinese goods that will be subject to a 25% tariff. The United States will also continue to pursue litigation against China at the WTO.

In the Europe, Italy has been struggling to form a stable government since inconclusive elections in March, with anti-establishment forces abandoning their effort to form a ruling coalition over the weekend. These developments have reignited dormant fears concerning the stability of the eurozone and default risk concerning Italy's €2.3 trillion ($2.68 trillion) in debt. Spain added fuel to fire as country's parliament is set to vote whether to oust Prime Minister Mariano Rajoy and his center-right party this Friday.

The 10-year Italian bond yield jumped above 3.38%, its highest level since March 2014 and more than 2.5% points above the German 10-year bond rate. US bonds rose on safe haven buying with the yield on the 10-year note falling to 2.77%, down from highs above 3.1% in recent weeks. The euro fell below $1.16 — its lowest level this year against the greenback. The Dollar Index rose 0.7% to 94.83.

WTI crude fell $1.15 or 1.7% to $66.73 a barrel.

European markets fell 1.3%-2.6%.

AT HOME

Sensex and Nifty fell 0.6% and 0.5% respectively to break three-day winning streak. Sensex lost 216 points to settle at 34949 while Nifty finished at 10633, down 55 points. BSE mid-cap and small-cap indices fell 0.4% and 0.3% respectively. BSE Bankex and Finance indices tumbled 1.6% and 1.1% respectively, becoming top losers among the sectoral indices while Oil & Gas and Auto indices were the top gainers, up 0.5% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 407 cr and 336 cr respectively but net bought stock futures worth Rs 407 cr. DIIs were net buyers to the tune of Rs 578 cr.

Rupee closed at 67.86/$, depreciating 43 paise compared to previous close.

BPCL was an all round beat. Net profit was up 25% at Rs 2673 cr and revenue was up 7.6% at Rs 65240 cr. EBIDTA was up 17% at Rs 3722 cr and margin rose 50 bps to 5.7%. Gross refining margin stood at $6.5% and core GRM stood at $5.57.

M & M was an all round beat. Net profit surged 50% y-o-y to Rs 1155 cr while revenue were up 25.6% at Rs 13189 cr. EBIDTA soared 70% to Rs 1995 cr and margin improved 400 bps to 15.1%.

Coal India reported a fall of 52% in net profit at Rs 1295 cr. Revenue fell 16% to Rs 26909 cr. EBITDA plunged 94.4% to Rs 195.5 cr and operating margin contracted 1420 bps to 0.7%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.8%-1.6% and SGX Nifty is suggesting about 60 points lower start for our market. In yesterday's report we had reiterated the view that 10735, the 61.8% retracement level of the recent 10930-10420 fall, is the immediate hurdle, a crossover of which is required for a fresh upmove.

Yesterday, Nifty, after touching a high of 10717, reversed to end at 10633 and is set to open below 10600 today.

Immediate support on the hourly chart is placed at 10565, a breach of which will generate a "Sell" on the hourly chart and pave the way for further correction. 10420, the low made last week, would be the next major support if that happens.

ONGC will report its quarterly earnings today.

10735-10760 IS THE RESISTANCE ZONE; 10550 SUPPORT

10735-10760 IS THE RESISTANCE ZONE; 10550 SUPPORT

WORLD MARKETS

US markets were shut yesterday.

European markets ended lower with 0.6% down CAC and DAX while Italy plunged 2.1% amid an ongoing political crisis.

The leader of Italy's largest political party called for the country's president to be impeached after choosing to veto a choice for economy minister.

Oil extended the fall with WTI down 1.4% at 66.46/$ while Brent fell 1.1% to $75.29.

On Sunday, US President Trump said that representatives from the U.S. had arrived in North Korea over the weekend, in an effort to prepare for a proposed summit between him and North Korean leader Kim Jong Un

AT HOME

Sensex and Nifty gained 0.7% and 0.8% respectively to extend the winning streak to third straight day. Sensex added 240 points to settle at 35165 while Nifty finished at 10688, up 83 points. BSE mid-cap and small-cap indices soared 1.4% and 1.6% respectively. Except 1.7% and 1.3% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Capital Goods and Oil & Gas indices leading the tally, up 2.5% each, followed by 2.1% higher Healthcare index.

FIIs net sold stocks worth Rs 795 cr but net bought index futures and stock futures worth Rs 480 cr and 438 cr respectively. DIIS were net buyers to the tune of Rs 1018 cr.

Rupee was trading at 67.43/$, appreciating 34 paise compared to previous close.

L & T reported 4.7% y-o-y rise in consolidated net profit at Rs 3167 cr while revenue were up 11.1% at Rs 40678 cr. EBIDTA grew 23% to Rs 5390 cr and margin expanded 120 bps to 13.2%. FY18 order inflow growth stood at 7%. The company has given FY19 revenue growth guidance of 12-15% and order inflow growth guidance of 10-12%.

Aurobindo Pharma's numbers were below markets expectation. Net profit fell 0.8% y-o-y to Rs 528 cr while Revenue rose 11.2% to Rs 4049 cr. EBIDTA was up 9.3% at Rs 788 cr but margin dipped 30 bps to 19.5%.

NTPC was a beat on bottom and topline but operational performance a margin missed estimates. Net profit rose 9.9% to Rs 2926 cr while revenue was up 5.2% at Rs 23100 cr. EBIDTA fell 4.2% to Rs 5910 cr and margin were down 240 bps at 25.6%.

OUTLOOK

Today morning, Nikkei is flat but Nikkei and Hang Seng are down 0.7% and 0.6% respectively. SGX Nifty is suggesting about 25 points lower start for our market.

Readers would recall that we had said that a crossover of 10575 would generate a "Buy" on the hourly chart and if that happens, 10675, the 50% retracement level of the recent 10930-10420 fall, would be the upside target followed by 10735, the 61.8% retracement level.

Nifty yesterday soared to 10710 before closing at 10688, achieving the first target and moving very close to second.

10735 and 10760 are the 61.8% and 67% retracement levels of the recent 10930-10420 fall, making 10735-10760 immediate resistance zone.

Immediate support on the hourly chart has moved up to 10550, with the stop-loss of which, existing longs can be held on to.

M & M, Coal India, BPCL and Powergrid will report their quarterly earnings today.

10675 IS THE NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 10520

10675 IS THE NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 10520

WORLD MARKETS

Dow and S & P 500 fell 0.2% each but Nasdaq gained 0.1% on Friday amid a mix of positive corporate earnings releases and Trump's decision to cancel a key summit with North Kora.

Oil tumbled with WTI down $2.83 or 4% to $67.40 and Brent down 3.4% to $76.13 following news that top producers could ease quotas on existing production cuts.

In economic news, orders for nondefense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 1% last month. Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, dropped 1.7% in April.

10-year US treasury yield eased further to 2.93%.

In Europe, FTSE and DAX gained 0.2% and 0.6% respectively but CAC, Italy and Spain fell 0.1%, 1.5% and 1.7% respectively. Italy's short-dated bond yields soared as uncertainty over the country's incoming anti-establishment government continued.

Delegations from the U.S. and North Korea met on Sunday at the border between North and South Korea. The White House later said it was still making preparations "should the summit take place."

AT HOME

Benchmark indices climbed about eight tenth of a percent to extend winning streak to second straight day. Sensex added 262 points to settle at 34925 while Nifty finished at 10605, up 91 points. BSE mid-cap and small-cap indices surged 1.6% and 1.2% respectively. Except 0.3% lower Consumer Durable index, all the BSE sectoral indices ended in green with Oil & Gas and Metal indices leading the tally, up 3% and 2.2% respectively.

FIIs net sold stocks worth Rs 768 cr but net bought index futures and stock futures worth Rs 538 cr and 407 cr respectively. DIIs were net buyers to the tune of Rs 888 cr.

Rupee appreciated 56 paise to end at 67.77/$.

For the week, Sensex gained 0.2% while Nifty ended flat.

Sun Pharma reported better-than-expected earnings. Net profit surged 58% to Rs 1309 cr while revenue was up 4.5% at Rs 6977 cr. EIDTA rose 20% to Rs 1683 cr and margin expanded 310 bps to 24.1%.

Tech Mahindra reported 29.6% q-o-q growth in net profit at Rs 1222 cr. Revenue rose 3.6% to Rs 8054 cr. EBIDTA was up 11.7% at Rs 1412 cr and margin rose 120 bps to 17.5%. Revenue in Dollar terms grew by 2.9% qoq to USD1,244.3 mn.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower but SGX Nifty is suggesting a marginally higher start for our market.

In Friday's report we had reiterated the view that 10575 is the immediate hurdle, a crossover of which will generate a "Buy" on the hourly chart and would pave the way for further upmove.

Nifty soared 91 points to settle at 10605, crossing this hurdle. 10675, the 50% retracement level of the recent 10930-10420 fall, is the next upside target to eye, above which, 10735, the 61.8% retracement level of this fall, would be the subsequent target.

Meanwhile, immediate support on the hourly chart is palced at 10520, with the stop-loss of which, trading longs should be held on to.

L & T, NTPC and Aurobindo Pharma will report their quarterly earnings today.

US markets will be closed today for the Memorial Day holiday.

10417 CONTINUES TO BE IMMEDIATE SUPPORT; 10575 IMMEDIATE HURDLE

10417 CONTINUES TO BE IMMEDIATE SUPPORT; 10575 IMMEDIATE HURDLE

WORLD MARKETS

US indices fell upto 0.3% after Trump canceled a planned meeting with North Korean Leader Kim Jong Un that had been set to take place in Singapore on June 12.

Trump said participating in the summit would be "inappropriate" given the "tremendous anger and open hostility" displayed by North Korea, which had reportedly suspended direct communication with the U.S. this week.

Also, US Commerce Department said that it started an investigation into whether automobile imports "threaten to impair the national security" of the United States.

US treasuries and gold rose on safe haven buying. The yield on the benchmark 10-year Treasury note fell below the key psychological level of 3%. Gold futures settled at $1304.4 per ounce, up 1.15%.

European markets fell 0.3%-0.9%.

AT HOME

Sensex and Nifty ended with gains of 0.8% and 0.9% respectively after a choppy session. Sensex added 318 points to settle at 34663 while Nifty added 83 points to finish at 10513. BSE mid-cap and small-cap indices however, fell 0.2% and 0.1% respectively. BSE IT and Tech indices soared 2.4% each, becoming top gainers among sectoral indices, followed by 2.2% higher telecom index.

FIIs net sold stocks and index futures worth Rs 702 cr and 371 cr respectively but net bought stock futures worth Rs 390 cr. DIIs were net buyers to the tune of Rs 1481 cr.

Rupee appreciated 8 paise to end at 68.34/$.

GAIL reported in-line-with estimates revenue but operational performance and net profit were a miss. Net profit fell 19.1% q-o-q to Rs 1021 cr while revenue rose 7.1% to Rs 15431 cr. EBIDTA was down 13.9% at Rs 1695 cr and margin contracted 270 bps to 11%.

OUTLOOK

Today morning, Asian markets are trading with modest cuts but SGX Nifty is suggesting a marginally higher start.

In yesterday's report we had mentioned that below 10417, which was the low made on Wednesday, 10325 would be the next downside target and had advised trailing stop-loss in short positions to 10575.

The benchmark surged 83 points to finish at 10513 and is set to open marginally higher today.

10575 continues to be immediate hurdle, a crossover of which would generate a "Buy" on the hourly chart and would pave the way for further upmove. 10675, the 50% retracement level of the recent 10930-10418 fall, would be the next target to eye if that happens.

10417 continues to be immediate support.

Sun Pharma, BoB and Tech Mahindra will report their quarterly earnings today.

NIFTY ACHIEVES 10440 TARGET; TRAIL STOP-LOSS TO 10575

NIFTY ACHIEVES 10440 TARGET; TRAIL STOP-LOSS TO 10575

WORLD MARKETS

US indices reversed first half losses to end with gains of 0.2%-0.6% after minutes of the May Fed meeting showed the Federal Reserve is comfortable letting inflation temporarily run above its inflation target.

Specifically, the minutes said "a temporary period of inflation modestly above 2 percent would be consistent with the Committee's symmetric inflation objective."

The lower start was attributed to retail giant Target reporting earnings that missed expectations and uncertainty over trade talks with China after Trump said the current dealmaking may be "too hard to get done."

General Electric plunged 7.2% — its worst one-day performance since 2009— after chief executive John Flannery said he expects no profit growth this year in its already stagnant power business.

The yield on the benchmark 10-year Treasury note fell to 3.008%. The dollar index was up 0.5% at 94.11.

European markets tumbled 1.1%-1.5% amid Italian government uncertainty and uncertainty over ongoing trade talks between US and China.

Euro zone consumer confidence fell to 0.2 points in May from 0.3 points in the previous month.

AT HOME

Sensex and Nifty nosedived 0.9% and 1% respectively to close at the lowest level since 18th April and 11th April respectively. Sensex lost306 points to settle at 34345 while Nifty finished at 10430, down 106 points. BSE mid-cap and small-cap indices fell 0.2% and 0.5% respectively. Except 0.3% and 0.1% higher Consumer Durable and Capital Goods indices respectively, all the BSE sectoral indices ended in red with Metal and Oil & Gas indices leading the losses, down 3.9% and 3.4% respectively.

FIIs net sold stocks and index futures worth Rs 311 cr and 1740 cr respectively but net bought stock futures worth Rs 159 cr. DIIs were net buyers to the tune of Rs 790 cr.

Rupee depreciated 38 paise to end at 68.42/$, closing at the lowest level since Nov. 29, 2016, marking a near 18-month low.

Shares of oil marketing companies tumbled 4-8% on fears that the government may ask them to freeze prices as a temporary arrangement.

Vedanta fell after the Madras High Court directed the company to stop the construction of Unit II of its Sterlite copper plant in Thoothukudi in south Tamil Nadu.

Tata Motors earnings missed expectation as consolidated net profit fell 50% to Rs 2176 cr. Revenue rose 18% to Rs 91279 cr. EBIDTA rose 3.7% to Rs 11250 cr and margin contracted 180 bps to 12.3%. JLR margins fell 220 bps to 12.2% from 14.4%.

OUTLOOK

Today morning, Nikkei is down more than a percent while Hang Seng and Shanghai are down 0.1% each. SGX Nifty is suggesting about 20 points higher start for our market.

After Nifty broke the 10555-10600 support zone, we had given next downside target of 10440, which is the 50% retracement level of the entire 9951-10930 upmove. Nifty yesterday plunged 106 points to end at 10430, achieving this target and vindicating our view.

Upon breach of 10417, which is the low made yesterday, next downside target to eye would be 10325, which is the 61.8% retracement level of the 9951-10930 upmove.

Meanwhile, immediate resistance on the hourly chart has moved lower to 10575, with the stop-loss of which, trading shorts can be held on to.

GAIL and United Spirits will report their quarterly earnings today.

10440 CONTINUES TO BE NEXT SUPPORT; 10680 IMMEDIATE HURDLE

10440 CONTINUES TO BE NEXT SUPPORT; 10680 IMMEDIATE HURDLE

WORLD MARKETS

US indices fell 0.2%-0.7% with the Dow falling the most on the back of U.S. President Donald Trump's remarks that he was "not satisfied" with the latest round of trade talks with China.

This was despite China's announcement that it would reduce tariffs on some vehicles to 15% from as much as 25% while levies on some parts will be brought down to 6% effective July 1.

On the geopolitical front, Trump said there was a "substantial chance" that a summit with North Korean leader Kim Jong Un "may not work out."

European markets gained upto 0.7% with Auto stocks gaining the most on China tariff cut news.

AT HOME

Benchmark indices ended with modest gains after a rangebound but choppy trade, breaking five-day losing streak. Sensex settled 35 points higher at 34651 while Nifty finished at 10537, up 20 points. BSE mid-cap and small-cap indices gained 0.6% each. BSE Auto and Metal indices gained 1.7% and 1.6% respectively, becoming top gainers among the sectoral indices while Oil & Gas and Energy indices were the top losers, down 0.4% and 0.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1652 cr, 808 cr and 20 cr respectively. DIIs were net buyers to the tune of Rs 1497 cr.

Rupee appreciated 7 paise to end at 68.05/$.

SBI reported a net loss of Rs 7718 cr for the March quarter, mainly due to a surge in provisions which surged to Rs 28096 cr, up 49% q-o-q. Gross NPA ratio rose 56 bps q-o-q to 10.91% and Net NPA ratio rose 12 bps to 5.73%. NII fell 5.2% to Rs 19974 cr. The bank reported fresh slippages of Rs 33670 cr, up from Rs 25836 cr q-o-q.

The stock however surged nearly 4% after the bank’s chairman, Rajnish Kumar, said the worst on bad loans was behind. Also, there was a sharp fall in overall stressed assets (watch list, net NPA, etc) to 6.7% of advances in Q4 from 8.5% in the December quarter (Q3) with no outstanding in various restructuring buckets such as SDR and S4A.

Cipla missed estimates on all counts. The company posted a net profit of Rs 153 cr as against a loss of Rs 63 cr in same quarter last year. Revenue rose 3.2% to Rs 3698 cr. EBIDTA grew 10.2% to Rs 558 cr and operating margin expanded 100 bps to 15.1%.

Dr Reddy 3.3% y-o-y dip in March quarter net profit at Rs 302 cr while revenue fell 0.5% to Rs 3535 cr. EBIDTA was down 8.3% at Rs 578 cr and margin contracted 140 bps to 16.3%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.3%-0.8% and SGX Nifty is suggesting about 20 points lower start for our market.

Readers would recall that we had turned our bias negative ever since immediate support of 10760 was broken. On the last count, after 10555-10600 support zone was taken out, we had given next downside target of 10440, which is the 50% retracement level of the entire 9951-10930 upmove.

Yesterday, Nifty, after touching a low of 10490, rebounded to end at 10536 and is set to open marginally lower today.

10440 continues to be immediate downside target as well as support to eye.

Immediate resistance on the hourly chart has moved lower to 10680, with the stop-loss of which, trading shorts should be held on to.

Tata Motors will report its quarterly earnings today.

10440 IS THE NEXT SUPPORT; TRAIL STOP-LOSS IN SHORTS TO 10700

10440 IS THE NEXT SUPPORT; TRAIL STOP-LOSS IN SHORTS TO 10700

WORLD MARKETS

US indices surged 0.5%-1.2% with the Dow leading the tally and closing above the 25,000 mark for the first time since mid-March on the back of easing trade tensions between US-China.

Over the weekend, US treasury Secretary Steven Mnuchin said the prospect of a trade war was "on hold" following an agreement to suspend tariff threats.

On Saturday, a joint statement said both the countries would continue talking about measures under which Beijing would import more energy and agricultural commodities from the U.S. in an effort to bridge the $335 billion annual U.S. goods and services trade deficit with China.

US crude climbed 1.4% to fresh 3.5 year high of $72.24 on continued geopolitical concerns. Brent was up 71 cents at 79.22/bbl.

In Europe, FTSE and CAC rose 1% and 0.4% respectively but Italy fell 1.5% on political worries.

AT HOME

Benchmark indices fell nearly seven tenth of a percent, extending the losing streak to fifth straight day. Sensex lost 232 points to settle at 34616 while Nifty finished at 10516, down 80 points. BSE mid-cap and small-cap indices nosedived 1.6% and 2.2% respectively. BSE Realty and Healthcare indices tumbled 3.1% and 2.6% respectively, becoming top losers among the sectoral indices while IT, Oil & Gas and Teck indices were the sole gainers, up 0.1% each.

FIIs net sold stocks, index futures and stock futures worth Rs 496 cr, 673 cr and 520 cr respectively. DIIs were net buyers to the tune of Rs 1191 cr.

Rupee fell 12 paise to end at fresh 16-month low of 68.12/$.

OUTLOOK

Today morning, Hang Seng is shut, Nikkei is flat and Shanghai is down 0.2%. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had said that 10600-10555 is an important support area as 10600 is where immediate previous bottom on the daily chart is placed, 10570 is where 34-DMA is placed and 10555 is the 38.2% retracement level of the entire 9951-10929 upmove.

Nifty however plunged 80 points to end at 10516, breaking this support zone. 10440, the 50% retracement level of the 9951-10929 upmove, is the next support to eye.

Immediate resistance on the hourly chart has moved lower to 10700, a crossover of which is required for a fresh upmove.

SBI, Dr Reddy, Cipla, IOC and HPCL will report their quarterly earnings today.

NIFTY ACHIEVES 20-DMA TARGET; TRAIL STOP-LOSS TO 10775

NIFTY ACHIEVES 20-DMA TARGET; TRAIL STOP-LOSS TO 10775

WORLD MARKETS

US indices fell 0.1%-0.2% on concerns over U.S.-China trade talks.

Trump said he doubted high-level U.S.-China trade negotiations would be successful as China, and other U.S. trading partners, had "become very spoiled." His comments came as a second round of the bilateral talks began in Washington on Thursday.

The yield on the 10-year U.S. Treasury note climbed to 3.122% — its highest level since August 2008.

Brent, after hitting a high of $80.50 a barrel, eased to end 9 cents lower at $79.19. US oil ended flat at $71.49 after hitting a high of $72.30.

European markets gained 0.3%-1%.

AT HOME

Sensex and Nifty fell 0.7% and 0.5% respectively, extending the losing streak to third straight day. Sensex lost 239 points to settle at 35149 while Nifty finished at 10682, down 58 points. BSE mid-cap and small-cap indices however gained 0.7% and 0.4% respectively. BSE FMCG index tumbled 0.9%, becoming top losers among the sectoral indices followed by 0.6% lower Bankex and Metal indices. Consumer Durable index surged 1.4%, becoming top gainer, followed by 0.4% higher Realty and Telecom indices.

FIIs net sold stocks, index futures and stock futures worth Rs 831 cr, 30 cr and 244 cr respectively. DIIs were net buyers to the tune of Rs 429 cr.

Rupee appreciated 9 paise to end at 67.70/$.

Bajaj Finance soared 7.7% after reporting stellar set of earnings. Net profit surged 61% y-o-y to Rs 721 cr and NII soared 40% to Rs 2365 cr. Asset quality improved with Gross NPA ratio down to 1.48% from 1.67% q-o-q and net NPA ratio at 0.38% from 0.53%.

OUTLOOK

Today morning, Shanghai is flat while Nikkei and Hang Seng are up 0.5% and 0.3% respectively. SGX Nifty is suggesting about 30 points lower start for our market.

After Nifty broke the immediate support of 10760, we had given downside target of 20-DMA, which was placed around 10680 and had also said that below 10680, next downside target would be 10600.

Nifty yesterday touched a low of 10664 before closing at 10682 and is set to open around 10650 today.

10600, the bottom made in early May, is the next downside target as well as the support.

10775 is the immediate resistance, with the stop-loss of which, trading shorts should be held on to.

Bajaj Auto and Ashok Leyland will report their quarterly earnings today.