NIFTY REBOUNDS AFTER ACHIEVING 11488 TARGET; 11650 IS IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 11488 TARGET; 11650 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow ended marginally in the red while S & P 500 and Nasdaq gained 0.1% and 0.5% yesterday, awaiting comments from U.S. Federal Reserve Chairman Jerome Powell for possible clues on the central bank’s next move on interest rates.

3M fell 2%, pressuring Dow while gains in Facebook, Amazon and Netflix supported Nasdaq. PepsiCo reported better-than-expected earnings.

Fed Chair Jerome Powell is scheduled to testify in front of the House Financial Services Committee today. Markets will be looking for clues on whether the Fed will cut rates later this month, as it is widely expected, or if the central bank thinks the economy is strong enough to maintain current monetary policy.

Brent rose 16 cents to $64.27 a barrel while WTI added 5 cents to reach $57.71.

European markets fell 0.2%-0.8% as a warning of an autos slowdown from German chemicals giant BASF dragged down autos and chemicals companies. A survey from UK showed average retail sales growth weakened to 0.6% in the 12 months to Junes, their slowest on record as worries about Brexit weighed on consumers.

AT HOME

After falling about eight tenth of a percent in the initial trade, benchmark indices recouped all the losses through the session to end little changed. Sensex settled at 38730, up 10 points while Nifty lost 2 points to finish at 11555. BSE mid-cap index gained 0.6% while small-cap index ended flat. BSE Consumer Durable index nosedived 6.8%, becoming top loser among the sectoral indices, followed by 1% lower Consumer Discretionary Goods & Services, FMCG and IT indices. Realty index was the top gainer, up 2.8%, followed by 1.8% higher Healthcare and Energy indices.

FIIs net sold stocks, index futures and stock futures worth Rs 674 cr, 1469 cr and 236 cr respectively. DIIs were net buyers to the tune of Rs 711 cr.

Rupee appreciated 12 paise to end at 68.54/$.

Titan tumbled 12.2% after the company, in its quarterly update, said, first quarter of the current fiscal saw a tough macro-economic environment with consumption taking a hit.

Bajaj Finance surged 5.6% after the company reported the highest loan growth in the last 11 quarters.

TCS reported a mixed set of numbers for the first quarter, missing revenue expectations, but delivers on the margins front. Profit topped estimates on higher other income. Dollar revenue rose 1.6% q-o-q to 5495 mn, rupee revenue rose 0.4% to Rs 38172 cr, EBIT fell 3.3% to Rs 9220 cr, margin fell 100 bps to 24.1% and net profit was up 0.1% at Rs 8131 cr.

OUTLOOK

Today morning, Hang Seng is up above half a percent while Nikkei and Shaghai are marginally higher. SGX Nifty is suggesting about 20 points higher start for our market.

Readers would recall that we had turned our view negative on Nifty after immediate support of 11860 was taken out and had given targets of 11488 after 11625 target was achieved.

Nifty, yesterday, after touching a low of 11461, rebounded to close at 11555, and is set to open higher today.

11625-11650, the erstwhile support zone, would now act as immediate hurdle. 11461, the low made yesterday, is the immediate support to eye below which 11426, the lower end of the gap created by big gap-up opening after the exit polls, would be the next support to eye.