12041-11614 CONTINUES TO BE IMMEDIATE RANGE

12041-11614 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS

US indices fell 0.7%-0.9% as falling bond yields triggered concerns about economic outlook and trade tensions between US and China continued to weigh on the sentiment.

The 10-year Treasury note yield fell to its lowest level since September 2017 before rebounding to about 2.26%. A portion of the yield curve further inverted as 3-month Treasury bills last yielded 2.36%.

Meanwhile, a commentary piece in the People’s Daily — the official newspaper of the Communist Party of China - said “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!”

US crude fell 0.6% to $58.81 a barrel while Brent fell 0.9% to $69.46.

European markets tumbled 1.2%-1.8% amid worries over the U.S.-China trade war and a potential budget standoff between Italy and the EU. Reports suggested that the EU is considering disciplinary action over the Italian government’s failure to rein in debt.

AT HOME

Benchmark indices fell six tenth of a percent, breaking 3-day winning streak. Sensex lost 247 points to settle at 39502 while Nifty finished at 11861, down 67 points. BSE mid-cap and small-cap indices lost 0.8% and 0.6% respectively. BSE Telecom and Capital Goods indices fell 1.2% and 0.8% respectively, becoming top losers among the sectoral indices while IT and Teck indices soared 1.6% and 1.4% respectively, becoming top gainers.

FIIs net sold stocks, index futures and stock futures worth Rs 304 cr, 734 cr and 792 cr respectively. DIIs were net sellers to the tune of Rs 190 cr.

Rupee depreciated 14 paise to end at 69.83/$.

M & M reported better-than-expected numbers for the March quarter. Revenue rose 4.7% y-o-y to Rs 13808 cr., EBITDA fell 6.4% to Rs 1868 cr, margin contracted 160 bps to 13.5% and net profit slipped 16% to Rs 969 cr.

OUTLOOK

Today morning, Nikkei and Shanghai are off 0.4% each while Hang Seng is up 0.3%. SGX Nifty is suggesting a flattish start for our market.

At the risk of repeating, for past couple of days, we have been mentioning that 12041 and 11614, the top and bottom made on the election result day, are important support and resistance levels to eye and that long positions can be held with the stop-loss of 11614.

Nifty, since then has been trading within these two levels and after touching a high of 11958 on Tuesday, slipped to end at 11861 yesterday.

12041 continues to be immediate hurdle to eye, a crossover of which is required for a fresh upmove. If that happens 12500 would be next major target. 11614 continues to be immediate support, with the stop-loss of which, existing longs should be held on to.

Coal India and ONGC will report their quarterly earnings today.

The big event to watch out today would be portfolio allocation in the second term of Mr. Modi's government. Markets would particularly watch out for new Finance minister, after Mr. Jaitley expressed his inability to join government, citing health reasons.