NIFTY REBOUNDS AFTER ACHIEVING 10612 TARGET; 10800 IS IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 10612 TARGET; 10800 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.2% but S & P 500 and Nasdaq lost 0.2% and 0.8% respectively ahead of Apple earnings and resumption of US-China trade talks.

Chinese Vice Premier Liu He is set to meet U.S. officials on Wednesday and Thursday.

US oil rose 2.5% to $53.31 a barrel and Brent added $1.29, or 2.2% to reach $61.22 after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the country's crude exports.

In Europe, DAX was flat while other markets gained 0.5%-1.3% with FTSE on the top.

Apple reported earnings after market hours, which were largely in line with expectations.

AT HOME

After falling nearly three fourth of a percent, benchmark indices recouped most of the losses in late noon surge to end just marginally lower. Sensex settled at 35592, down 64 points while Nifty lost 9 points to finish at 10652. BSE mid-cap index gained 0.4% but small-cap index fell 0.1%. BSE FMCG and Capital Goods indices tumbled 1.2% and 1% respectively, becoming top gainers among the sectoral indices while Telecom and Healthcare indices were the top gainers, up 1% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 354 cr, 466 cr and 165 cr respectively. DIIs were net buyers to the tune of Rs 81 cr.

Rupee depreciated 1 paise to end at 71.11/$.

HCL Tech was a beat on revenue and net profit while margins were in-line. Constant currency revenue growth was strong at 5.6% q-o-q and 13% y-o-y. Rupee revenue rose 5.6% to Rs 15699 cr, EBIT was up 4% at Rs 3086 cr, margin fel 24 bps to 19.66% and net profit rose 2.8% to Rs 2611 cr. The company maintained its FY19 revenue and margin guidance.

Axis Bank posted good set of earnings with improvement in asset quality. NII rose 18.4% to Rs 5604 cr while Net profit surged 130% to Rs 1680 cr. Gross NPA ratio improved 19 bps to 5.75% and net NPA ratio fell 18 bps to 2.36%. Net interest margin improved to 3.47% from 3.36%. Slippages stood at Rs 3746 cr as against Rs 2777 cr.  98% of corporate slippages came from the BB and below pool.

HDFC reported in-line with estimate net profit while NII was a beat. NII rose 16.6% to Rs 3191 cr while Net profit fell 60% y-o-y to Rs 2114 cr. Net interest margin remained unchanged at 3.5% q-o-q. Gross NPA ratio rose 9 bps to 1.22% q-o-q.

Bajaj Finance posted slight beat on net profit and NII front while asset quality deteriorated slightly. NII rose 42% to Rs 3094 cr while Net profit surged 47.8% to Rs 1023 cr. Gross NPA ratio rose 6 bps q-o-q to 1.55% while Net NPA ratio rose 9 bps to 0.62%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.3%-0.6% and SGX Nifty is suggesting about 15 points higher start for our market.

After Nifty broke the immediate support of 34-DMA placed around 10800, we had given downside target of 10700 followed by 10612. Nifty yesterday touched a low of 10583 before closing at 10652, achieving the targets mentioned above and vindicating our view.

10583, the bottom made yesterday, is the immediate support to eye below which 10500, the 50% retracement level of the entire 10004-10987 upmove, would be the next support.

Immediate hurdle on the hourly chart is placed around 10800 above which 10987, the top made last week, would be the major resistance to eye.

The U.S. Federal Reserve is set to announce its monetary policy decision following a two day meeting of the Federal Open Market Committee and is expected to leave interest rate unchanged.