NIFTY SET TO CHALLENGE 10985 HURDLE; 10813 CONTINUES TO BE NEAREST SUPPORT

NIFTY SET TO CHALLENGE 10985 HURDLE; 10813 CONTINUES TO BE NEAREST SUPPORT

WORLD MARKETS

US indices gained 0.5%-0.7% ahead of President Donald Trump's latest State of the Union address where he is expected to make comments on North Korea, the U.S. economy, China trade talks and border security.

Alphabet, Seagate Technology and Estee Lauder reported better-than-expected earnings.

US crude fell 1.7% to $53.66 a barrel while Brent eased 41 cents to $62.10.

European markets climbed 1.2%-2%. Euro zone retail sales fell 1.6% month-on-month in December.

AT HOME

Benchmark indices ended modestly higher, extending the winning streak to fourth straight day. Sensex settled at 36616, up 34 points while Nifty added 22 points to finish at 10934. BSE mid-cap and small-cap indices however bucked the trend yet again by losing 0.5% and 0.9% respectively. BSE Consumer Durable and Auto indices gained 1.2% and 0.9% respectively, becoming top gainers among the sectoral indices while Realty index nosedived 2.1%, becoming top loser, followed by 1% lower Capital Goods, Power and Industrial indices.

FIIs net bought stocks and index futures worth Rs 421 cr and 795 cr respectively but net sold stock futures worth Rs 321 cr. DIIs were net buyers to the tune of Rs 194 cr.

Rupee appreciated 24 paise to end at 71.56/$.

Tech Mahindra numbers beat estimates on all fronts. Dollar revenue rose 3.5% q-o-q to 1261 mn, rupee revenue was up 3.6% at Rs 8944 cr, EBIT rose 8.7% to Rs 1439 cr, margin expanded 76 bps to 16.1% and net profit rose 13% to Rs 1203 cr.

HPCL numbers, except revenue, came in below estimates. Revenue rose 6.8% to Rs 72112 cr, EBITDA was down 68% at Rs 963 cr, margin fell 316 bps to 1.3% and net profit plunged 77% to Rs 247 cr.

GAIL's topline and bottomline came in slightly better-than-expectation while margin were in-line. Revenue rose 2.7% q-o-q to Rs 19789 cr, EBITDA was down 8.7% at Rs 2675 cr, margin fell 170 bps to 13.5% and net profit was down 14.4% at Rs 1681 cr.

OUTLOOK

Today morning, Nikkei is up 0.3% while SGX Nifty is suggesting about 50 points higher start for our market.

For more than a month, 10985 has been a tough resistance for Nifty and the benchmark has repeatedly reversed from this level. Yesterday, after touching a high of 10956, Nifty closed at 10934, and is set to open around 10980 today.

Once 10985 is taken out decisively, 11090, the 61.8% retracement level of the entire 11760-10004 fall, would be the next upside target.

10813, the low made on the budget day continues to be immediate support.

Lupin, Cipla, Adani Ports, JSW Steel and Vodafone-Idea will report their quarterly earnings today.