NIFTY RETREATS AFTER TESTING 10785 HURDLE

NIFTY RETREATS AFTER TESTING 10785 HURDLE

WORLD MARKETS

US indices gained 0.8%-0.9% with the Dow extending the winning streak to sixth straight day, following the release of weaker-than-expected U.S. inflation data.

Data from labor department showed consumer price index rose 0.2% in April, lesser than the expected 0.3% rise. This eased concerns about the Federal Reserve tightening monetary policy at a faster rate than the market is expecting. Weekly jobless claims remained near a 48-year low at 211,000.

10-year treasury yield, which broke above 3% mark on Wednesday, slipped following inflation data to 2.966%.

US oil rose 22 cents to $71.36 and Brent added 19 cents to $77.40 a barrel.

European markets, except 1% lower Italy, gained 0.2%-0.6%. The yield on Italian government 10-year bonds rose to a seven-week high following news that former Prime Minister Silvio Berlusconi will not stand in the way of a new coalition government.

The Bank of England held interest rates steady, after a first-quarter slowdown in economic growth tarnished the case for higher borrowing costs.

AT HOME

After gaining about four tenth of a percent in the opening trade, benchmark indices saw a sustained downward move through the session to end lower by a fifth of a percent, breaking 3-day winning streak. Sensex settled 73 points lower at 35246 while Nifty finished at 10716, down 25 points. BSE mid-cap and small-cap indices plunged 1.5% and 1.4% respectively. BSE Realty index tumbled 2%, becoming top loser among the sectoral indices, followed by 1.6% lower Power index. Energy and Oil & Gas indices were the top gainers, up 0.6% and 0.5% respectively.

FIIs net sold stocks and stock futures worth Rs 365 cr and 318 cr respectively but net bought index futures worth Rs 111 cr. DIIs were net buyers to the tune of Rs 901 cr.

Rupee depreciated 5 paise to end at 67.30/$.

Asian Paints expectation beating double digit volume growth while revenue rose 14.7% to Rs 4484 cr. EBIDTA was up 18.5% at Rs 840 cr and margin rose to 18.7% from 18.1%. PAT was up 5% at Rs 495 cr.

For Titan, revenue was a miss but operational performance was strong. Revenue rose 11.7% to Rs 4126 cr. EBITDA was up 67.4% at Rs 455 cr and margin expanded 380 bps to 11.6%. Net profit soared 41% to Rs 282 cr.

ZEE reported strong 24% ad-revenue growth. Revenue was up 24% at Rs 1725 cr. EBIDTA rose 8% to Rs 506 cr. Margin fell to 29.3% from 30.7%. Adjusted net profit was down 21% at Rs 230 cr.

OUTLOOK

Today morning, Nikkei and Hang Seng are up just under a percent while Shanghai is marginally lower. SGX Nifty is suggesting about 50 points higher start for our market.

For last few sessions, we have been mentioning that a crossover of 10785, the top made last week, is required for a fresh upmove. Yesterday, Nifty, after touching a high of 10785, slipped to end at 10716 and is set to open above 10750 today.

10785 continues to be immediate hurdle above which 10950 would be the next target to eye.

10600, the bottom made last week, continues be immediate support, below which, around 10500 would be the next support.

IIP for March will be out today and is expected to show a growth of 6.1%.

Karnataka assembly elections will be held tomorrow and counting will take place on Tuesday. On Monday market will react to exit polls which will be out after elections tomorrow. In the 224-seat Karnataka assembly, Congress and BJP had won 122 and 40 seats respectively in 2013 elections. According to most of the surveys, Congress seems to have the edge over the BJP and the result could very well be neck and neck.