11135-11108 IS THE IMPORTANT SUPPORT ZONE; 11400 IMMEDIATE HURDLE

11135-11108 IS THE IMPORTANT SUPPORT ZONE; 11400 IMMEDIATE HURDLE

WORLD MARKETS

Nasdaq soared 1.1% while S & P 500 and Dow rose 0.7% and 0.2% on Friday after strong earnings from tech giants like Alphabet and Intel and a better-than-expected GDP print.

Alphabet surged 9.6% after reporting better-than-expected earnings and announcing a massive $25 billion share repurchase program. Twitter shares gained more than 8% on the back of second-quarter results that topped estimates. Starbucks gained 8.9% after reporting hefty same store-sales growth while McDonald's climbed 0.5% as promotions led better-than-expected revenue in the U.S.

The U.S. economy expanded by 2.1% in the second quarter, beating the estimated 1.8% mark.

Brent futures rose 5 cents to $63.44 a barrel while US crude rose 18 cents to $56.20 a barrel

European markets gained 0.5%-0.8% after the European Central Bank suggested it could lower borrowing costs to tackle a slowdown in the euro zone.

For the week, Nasdaq and S & P 500 climbed 2.3% and 1.7% respectively while Dow rose 0.1%. European markets added 0.5%-1.3%. In Asia, Nikkei and Shanghai rose 0.9% and 0.7% respectively but Hang Seng fell 1.3%.

Brent rose more than 1% while US crude gained more than 0.5% for the week.

AT HOME

Benchmark indices ended with modest gains on the last trading day of the week, breaking six-day losing streak. Sensex added 51 points to settle at 37882 while Nifty finished at 11284, up 32 points. BSE mid-cap and small-cap indices rose 0.5% and 0.2% respectively. BSE Auto index climbed 2%, becoming top gainer among the sectoral indices, followed by 1% higher Bankex as well as Consumer Discretionary Goods & Services index.

FIIs net sold stocks and index futures worth Rs 1503 cr and 1049 cr respectively but net bought stock futures worth Rs 721 cr. DIIs were net buyers to the tune of Rs 1918 cr.

Rupee was trading at 68.89/$, appreciating 14 paise compared to previous close.

For the week, Sensex and Nifty lost 1.2% each, extending the losing streak to third straight week.

GST Council reduced GST rate on Electric vehicles to 5% from 12% and on EV chargers to 5% from 18%.

ICICI Bank's NII beat estimates and asset quality improved while profit missed estimate. NII grew 26.8% y-o-y to Rs 7737 cr and net profit stood at Rs 1908 cr as against loss of Rs 119.6 cr. Gross NPA ratio improved 20 bps q-o-q to 6.5% while net NPA ratio improved 29 bps to 1.77%. Slippages fell 22% q-o-q to Rs 2779 cr.

Maruti reported weak numbers that beat estimates. Revenue fell 12.2% y-o-y to Rs 19720 cr, EBITDA was down 38.5% at Rs 2018 cr, margins dipped 440 bps to 10.4% and net profit fell 27.3% to Rs 1435 cr. 

Bajaj Auto reported largely in-line with expected numbers. Revenue rose 4.5% y-o-y to Rs 7756 cr, EBITDA fell 6.5% to Rs 1198 cr, margin fell 175 bps to 15.45% and profit rose 0.9% to Rs 1125 cr.

JSW reported weak set of numbers. Revenue fell 3.4% y-o-y to Rs 19812 cr, EBITDA eased 27.2% to Rs 3716 cr, margin dipped 614 bps to 18.76% and net profit plunged 56.6% to Rs 1028 cr.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-0.7% and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that we had turned our view on Nifty negative ever since 11582 support was taken out and have been advising holding on to short positions with a trailing stop-loss.

11135-11108 is the next important support zone to eye where 11135 is where 200-DMA is placed while 11108 is the bottom made in May.

Immediate resistance on the hourly chart has moved lower to 11400, a crossover of which is required for a further upmove.