11078-10890 CONTINUES TO BE IMMEDIATE RANGE

11078-10890 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS

US indices ended marginally in the red on Friday as strong earnings offset Trump’s comments to increase tariffs on China.

Microsoft reported better-than-expected earnings Thursday after the close and issued strong revenue guidance. Honeywell too posted stronger-than-expected earnings and revenue.

U.S. dollar slumped 0.7% to 94.48 on comments from President Trump that China and Europe are manipulating their currency and the Federal Reserve is hurting economic growth by raising interest rates. Trump, in a media interaction, also said he is ready to put tariffs on every Chinese good coming to the U.S. if necessary.

Trump also went after the Federal Reserve for a second straight day by criticizing Fed for hiking interest rate via tweeter.

US crude rose $1 or 1.4% to settle at $70.46 a weakening dollar and lower expected August oil exports from Saudi Arabia.

European markets fell 0.1%-1% with DAX leading the losses. Auto stocks were the worst-performers amid reports that the European Commission is preparing retaliatory tariffs in case the U.S. moves ahead with duties on European carmakers.

For the week, Nasdaq fell 0.1%, S&P 500 ended flat while the Dow rose 0.2% to extend the winning streak to third-straight week. In Europe, CAC fell 0.6% while DAX and FTSE gained 0.2% each.  In Asia, Hang Seng and Shanghai fell 1.1% and 0.1% respectively while Nikkei added 0.4%.

AT HOME

Sensex and Nifty gained 0.4% and 0.5% respectively, breaking two-day losing streak. Sensex added 145 points to settle at 36496 while Nifty finished at 11010, up 53 points. BSE mid-cap and small-cap indices rose 0.7% and 0.4% respectively. BSE IT and Healthcare indices gained 1.5% and 1.1% respectively, becoming top gainers among the sectoral indices while Oil & Gas and Metal indices were the top losers, down 0.6% each.

FIIs net bought stocks and stock futures worth Rs 310 cr and 594 cr respectively while net sold index futures worth Rs 985 cr. DIIs were net sellers to the tune of Rs 51 cr.

Rupee appreciated 20 paise to end at 68.84/$.

Wipro reported muted but ahead of market estimated first quarter numbers. Dollar revenue fell 1.7% q-o-q to $2026.5 mn while constant currency growth stood at 0.1%. Rupee revenue rose 2.1% to Rs 13700 cr. EBIT was up 24% at Rs 2397 cr and margin expanded 280 bps to 17.2%. Company guided for a revenue growth guidance of 0.3%-2.3% for Q2.

Bajaj Auto's numbers missed street estimates on all the counts. Net profit rose 20.7% to Rs 1115 cr while revenue rose 27% to Rs 7419 cr. EBIDTA rose 36.5% to Rs 1281 cr while margin remained flat at 17.3%.

HDFC Bank reported lower-than-expected 18.2% rise in Q1 net profit at Rs 4601 cr, hit by a mark-to-market loss of Rs 391 cr in the bond portfolio. NII rose 15.4% to Rs 10814 cr. Asset quality remained largely stable with GNPA at 1.33% as against 1.3% q-o-q and Net NPA ratio unchanged at 0.41%.

GST Council on Saturday decided to slash rates on over 50 goods, including washing machines, refrigerators, vacuum cleaners, paints, footwear, ethanol, cosmetics, and sanitary napkins. The council also allowed businesses with turnover of up to Rs 5 crore to file quarterly returns.

OUTLOOK

Today morning, Hang Seng is modestly higher while Nikkei and Shanghai are down 1.2% and 0.3% respectively. SGX Nifty is suggesting a flattish start for our market.

After hitting a high of 11078 on 12th July, last week was that of a consolidation as Nifty traded within previous week's range by touching a high of 11078 and low of 10925 and finally settling at 11010.

10890 continues to be immediate support, with the stop-loss of which, trading longs should be held on to. 11078 continues to be immediate upside hurdle, above which 11171, the top made in January, would be the next target to eye.