NIFTY REBOUNDS FROM THE VICINITY OF 11220 TARGET; 11450 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 11220 TARGET; 11450 IS THE IMMEDIATE HURDLE

WORLD MARKETS

US indices, after falling nearly a percent and half in the initial trade, recovered through the session to end with cuts of 0.3%-0.5% ahead of the implementation of new U.S. tariffs on Chinese goods.

Intraday recovery happened after Trump said it's possible to get a trade deal with China this week.

Chipmakers, sensitive to higher tariffs, took a hit as Nvidia and Micron dropped about 2.1% and 1.2% respectively. Intel fell nearly 5.3% after sinking nearly 5% in the previous session as the chipmaker said it sees both revenue and earnings per share growing in the "single digit" percentage range over the next three years.

Adding to concerns, the yield on the 10-year Treasury note fell below that of the 3-month bill briefly, inverting part of the so-called yield curve.

US crude fell 42 cents to $61.70 per barrel while Brent rose 2 cents to $70.39.

European markets fell 0.9%-1.9%.

AT HOME

After falling nearly a percent, benchmark indices recouped about half of the losses in late noon trade to end lower in the vicinity of half a percent, extending the losing streak to seventh consecutive day. Sensex lost 230 points to settle at 37558 while Nifty finished at 11301, down 57 points. Both the indices closed at the lowest level since 12th March, marking a near two month low. BSE mid-cap and small-cap indices fell 0.2% and 0.4% respectively. BSE Energy index nosedived 2.6%, becoming top loser among the sectoral indices, followed by 1.5% lower Metal index. IT and Teck indices were the top gainers, up 0.4% each.

FIIs net sold stocks, index futures and stock futures worth Rs 655 cr, 2068 cr and 952 cr respectively. DIIs were net buyers to the tune of Rs 678 cr.

Rupee depreciated 23 paise to end at 69.94/$.

HCL Tech reported better-than-expected constant currency revenue growth of 3.3% q-o-q. Rupee revenue rose 1.9% to Rs 12990 cr, EBIT fell 1.5% to Rs 3039 cr, margin fell 70 bps to 18.9% and profit fell 1.7% to Rs 2568 cr. The company expects FY20 constant currency revenue growth at 14-16%.

Asian Paints posted disappointing set of numbers for Q4FY19. Revenue rose 11.7% y-o-y to Rs 5018 cr, EBITDA fell 2% to Rs 823 cr, margin dipped 230 bps to 16.4% and net profit fell 1.7% to Rs 487 cr.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4%-1.4% and SGX Nifty is suggesting a flattish start for our market.

At the risk of repeating, we had turned negative on Nifty after 11550 support was taken out and had given target of 11370, followed by 11220.

Nifty yesterday touched a low of 11255 before closing at 11301, coming in very close to 11220 target mentioned above.

11220, the 50% retracement level of the entire 10585-11856 upmove, continues to be downside support to eye. If that gets breached 11070, the 61.8% retracement level of this upmove, would be the next support to watch.

On the way up, 11450, where a trendline adjoining recent tops on the hourly chart is placed, would be the immediate hurdle, upon crossover of which, 10550 would be the next hurdle to eye.

L & T, SBI and Eicher Motors will report their quarterly earnings today.