NIFTY RETREATS FROM 10770 HURDLE; 10650-10630 IS THE SUPPORT ZONE

NIFTY RETREATS FROM 10770 HURDLE; 10650-10630 IS THE SUPPORT ZONE

WORLD MARKETS

US indices fell 0.4%-0.7% after digesting Fed statement which hinted at higher inflation ahead.

The Fed kept interest rates unchanged, as was largely expected but noted that "overall inflation and inflation for items other than food and energy have moved close to 2%." That was an upgrade from the March meeting in which the FOMC said the indicators "have continued to run below 2%."

Treasury yields initially rose before falling, with the 10-year at 2.974% and the two-year below a near 10-year high. Dollar index initially dipped in reaction to the Fed's statement, but later pared losses to end higher at 92.71.

Apple rose 4.4 percent after reporting better-than-expected quarterly earnings and revenue that surpassed market expectations.

Mortgage applications dropped 2.5% as rates reached their highest levels in nearly five years. Data from ADP and Moody's Analytics showed private payrolls grew by 204,000 in April, more than the expected 200,000.

WTI crude rose 68 cents or 1% to $67.93 a barrel and Brent rose 22 cents to $73.35.

European markets gained 0.2%-1.5% with DAX on the top. Basic resources and technology stocks led the gains. Eurozone manufacturing PMI came in at 56.2, which represented a 13-month low.

AT HOME

After gaining about four tenth of a percent in the opening trade, benchmark indices gave away all the gains in late noon plunge to end flat to modestly lower. Sensex settled at 35176, up 16 points while Nifty finished 21 points lower at 10718. BSE mid-cap and small-cap indices nosedived 1.2% each. Except 0.2% higher Energy index and flat Finance index, all the BSE sectoral indices ended in red with Metal and Basic Material indices leading the tally, down 3.4% and 2.1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 526 cr, 325 cr and 477 cr respectively. DIIs were net buyers to the tune of Rs 166 cr.

Rupee ended flat at 66.66/$.

SEBI yesterday announced additional risk management measures for the derivatives segment according to which clearing or trading members need to include initial margin, exposure margin or extreme loss margin, calendar spread margin and mark to market settlements. The client margins are required to be compulsorily collected and reported to the exchange or clearing corporation.

HCL Tech posted 7.5% q-o-q rise in March quarter net profit at Rs 2230 cr. Revenue rose 2.9% to Rs 13178 cr. In dollar terms revenue rose 2.5% to USD 2.04 bn. Operating profit rose 8.8% to Rs 3305 cr and margin rose to 19.6% from 18.4%. The company guided for 9.5-11.5% constant currency revenue growth for FY19.

Hero MotoCorp posted 35% y-o-y rise in March quarter net profit at Rs 967 cr. Net sales rose 14.3% to Rs 8564 cr. EBIDTA margin rose to 16.2% from 13%

OUTLOOK

Today, Nikkei is shut while Hang Seng and Shanghai are down 1.5% and 0.4% respectively. SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had reiterated the view that 10770, the two-third retracement level of the entire 11171-9951 fall, continues to be next upside target as well as hurdle, a crossover of which is required for a fresh upmove.

Nifty, after touching a high of 10784 in the initial trade, slipped to end at 10718 and is set to open below 10700 today.

10770 continues to be immediate hurdle, a decisive crossover of which is required for a fresh upmove.

Meanwhile, 10650-10630, where a gap created by the gap up opening on Friday is placed, is the immediate support zone, with the stop-loss of which, existing longs should be held on to.

Adani Ports and Vedanta will report their quarterly earnings today.

A U.S. delegation begins negotiations with their Chinese counterparts on Thursday and Friday in Beijing.