11300 CONTINUES TO BE IMMEDIATE SUPPORT; 11500 NEAREST HURDLE

11300 CONTINUES TO BE IMMEDIATE SUPPORT; 11500 NEAREST HURDLE

WORLD MARKETS

US indices gained 0.6%-0.7% on reports that in-person trade negotiations between the U.S. and China will begin next week. A batch of stronger-than-expected earnings also lifted sentiment.

Coca-Cola shares jumped more than 6% after the company posted earnings and revenue that topped expectations. United Technologies and Biogen also reported better-than-expected earnings.

Brent futures rose 67 cents to $63.94 a barrel and WTI climbed 64 cents to$56.77

European markets rose 0.6%-1.6% with DAX on the top, after digesting a strong set of corporate results and looking ahead to this week’s European Central Bank policy meeting.

In the UK, Boris Johnson’s was elected to lead the Conservative Party by its 160,000 members and will become U.K. prime minister on Wednesday. Johnson has previously stated that the U.K. must leave the European Union by the October 31 deadline “do or die, come what may.”

IMF cut it's global growth forecast by 10 bps each for 2019 and 2020 to 3.2% and 3.5% respectively.

AT HOME

Benchmark indices ended marginally lower after a choppy session, extending the losing streak to fourth consecutive day. Sensex lost 48 points to settle at 37982 while Nifty finished at 11331, down 15 points. BSE mid-cap index lost 0.6% but small-cap index gained 0.4%. BSE Utilities and FMCG indices gained 1.4% and 1.3% respectively, becoming top gainers among the sectoral indices while Finance and Auto indices fell 0.8% and  0.5% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 2608 cr, 599 cr and 294 cr respectively. DIIs were net buyers to the tune of Rs 2625 cr.

Rupee closed at 68.94/$, depreciating 3 paise compared to previous close.

Citing weak demand, the International Monetary Fund cut India's growth forecast this financial year by 30 bps each for FY20 and FY21 to 7% and 7.2% respectively.

L & T orderbook growth beat estimate but the company said that it doesn't expect big orders from private players as they are not willing to add capacity. Revenue rose 9.7% to Rs 29636 cr, EBITDA rose 20.4% to Rs 3319 cr, margin improved 100 bps to 11.2% and net profit was up 21.2% at Rs 1473 cr. Order inflow at Rs 38700 cr was better-than-expected. The company maintained its FY20 revenue and order inflow guidance.

HUL reported stronger than expected margin on the back of revised accounting norms and lower ad spend but issued a cautious outlook. Revenue rose 6.6% yoy to Rs 10114 cr, EBITDA climbed 17.6% to Rs 2647 cr, margin expanded 250 bps to 26.2% and net profit was up 14.8% at Rs 1755 cr. Volume growth stood at 5%. The company expects near term demand to remain subdued.

ZEE Entertainment numbers were all round beat. Revenue rose 13.3% to Rs 2008 cr, EBITDA rose 33.6% to Rs 727 cr, margins rose to 36.2% from 30.6% and Net profit surged 62.5% to Rs 530 cr. Domestic ad revenue rose 4.2%  while subscription revenue surged 46.7%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4%-0.8% and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had reiterated the view that 11300 continues to be important immediate support to eye while 11550 is the immediate hurdle.

Nifty, after touching a high of 11398, slipped to end at 11331 and is set to open marginally lower today.

11300, where 34-week moving average is placed, continues to be important immediate support to eye. If that breaks, 11250, in the vicinity of which lower band of bollinger on weekly chart is placed, would be the next support. If 11250 gets violated, 200-DMA, placed around 11130, would be the next level to watch out.

Immediate hurdle on the hourly chart has moved lower to 11500, a crossover of which is required to negate negative bias.

Asian Paints and Bharti Infratel will report their quarterly earnings today.