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.