9158 CONTINUES TO BE IMMEDIATE HURDLE; 8806 IMMEDIATE SUPPORT

9158 CONTINUES TO BE IMMEDIATE HURDLE; 8806 IMMEDIATE SUPPORT

WORLD MARKETS

US indices gained 1.5%-2.1%, boosted by strong retail earnings, record highs in Amazon and Facebook and gradual reopening of states. S&P 500 closed at its highest level since March 6.

Lowe’s and Target reported strong earnings and jump in same-store sales in the first quarter thanks to heightened demand amid the pandemic. Facebook and Amazon both hit new all-time highs, rising 6.4% and 2%, respectively.

Stocks however fell from their session highs after the Senate passed legislation that could prevent some Chinese companies from listing their shares on US exchanges unless they follow starndard for US audits and regulations.

WTI crude gained $1.5, or 4.8%, to settle at $33.49 per barrel while Brent rose $1.1, or 3.2%, to $35.75 per barrel. Data from the U.S. Energy Information Administration showed that for the week ending May 15, inventory dropped by 5 million barrels.

European markets rose 0.9%-1.3%. Euro zone April inflation was revised down to 0.3% from an initial estimate of 0.4%, bringing annual inflation to its lowest level since August 2016.

AT HOME

After trading in a narrow range for better part of the day, benchmark indices spiked up in late noon trade to end with gains of 2.1%, extending the rising streak to second straight day. Sensex surged 622 points to settle at 90818 while Nifty finished at 9066, up 187 points. BSE mid-cap and small-cap indices gained 1.5% and 1.1% respectively. Except 1.6% lower Telecom index, all the BSE sectoral indices ended in green with Healthcare and Capital Goods indices leading the tally, up 3.2% and 3.1% respectively.

FIIs net sold stocks worth Rs 1467 cr but net bought index futures and stock futures worth Rs 216 cr and 156 cr respectively. DIIs were net buyers to the tune of Rs 2373 cr.

Rupee depreciated 16 paise to end at 75.79/$.

Bajaj Auto results beat expectations on all the counts. Revenue fell 8.2% y-o-y to Rs 6816 cr, EBITDA was up 2% at Rs 1253 cr, margin improved 190 bps to 18.4% and net profit inched up 0.4% to Rs 1310 cr.

Ultratech earnings too beat estimates. Net profit rose to Rs 3239 cr (which included tax credit of Rs 2024 cr) from Rs 850 cr. Revenue fell 13% to Rs 10746 cr, EBITDA was down 3.9% at Rs 2443 cr and margin improved 220 bps to 22.7%. Consolidated sales volume fell 16% to 21.44 mt.

OUTLOOK

Today morning, Asian markets are trading with modest gains while SGX Nifty is suggesting around 20 poitns lower start for our market.

In yesterday's report we had reiterated the view that 9158, the top made Monday, continued to be immediate hurdle, a crossover of which is required for a fresh upmove.

Nifty soared to touch a high of 9094 before closing at 9066 and is set to open near 9050 today.

9158, the top made Monday, continues to be immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 9281-9351, the gap created by gap-down opening on 14th May, would be the next target/resistance zone to eye.

8806, the low made on Monday, continues to he immediate support.

Bajaj Finserve and Colgate will report their quarterly earnings today.