10390 IS THE NEXT UPSIDE TARGET; TRAIL STOP-LOSS TO 11115

10390 IS THE NEXT UPSIDE TARGET; TRAIL STOP-LOSS TO 11115

WORLD MARKETS

US indices fell 0.6%-1.3% with Nasdaq leading the losses, digesting fresh set of corporate earnings and economic data.

McDonald’s fell 2.5% after reporting a 24% drop in comparable sales and weaker than expected profits. 3M lost 4% on unexpected drop in profits and sales.

Conference Board’s consumer confidence index for July slipped to 92.6 from June’s upwardly revised 98.3. The expected figure was 95.5.

Federal Reserve will conclude its two-day policy meeting today and will issue policy statement which will be followed by Chairman Jerome Powell's press conference. It is expected that the FOMC will remain dovish and acknowledge that the US economic outlook has deteriorated since the 11 June meeting.

Chief executives of Amazon, Apple, Facebook and Google-parent Alphabet will testify before the House Antitrust Subcommittee following a yearlong probe into their anti-competitive practices.

In the after-hours trading, Advanced Micro Devices climbed more than 9% after posting better-than-expected quarterly earnings and issuing an upbeat guidance for the year. Starbucks rose more than 5% after raising forecast for the current quarter.

Brent futures fell 19 cents, or 0.4%, to $43.22 a barrel, while WTI crude futures settled 56 cents, or 1.4%, lower at $41.04 per barrel.

In Europe, FTSE rose 0.4% while DAX ended flat and CAC fell 0.2%.   

AT HOME

Benchmark indices surged a percent and half, breaking two-day losing streak and closing at the highest level since 3rd March, marking near 5-month high. Sensex settled at 38492, up 558 points while Nifty added 168 points to finish at 11300. BSE mid-cap and small-cap indices gained 0.8% and 0.6% respectively. All the BSE sectoral indices ended in green with Auto index leading the tally, up 3.3%, followed by 2.5% higher IT index.

FIIs net bought stocks, index futures and stock futures worth Rs 246 cr, 993 cr and 363 cr respectively. DIIs were net sellers to the tune of Rs 1017 cr.

Rupee ended unchanged at 74.83/$.

Nestle's quarterly numbers missed estimates on revenue, EBITDA as well as net profit front. Revenue rose 1.7% to Rs 3050 cr, EBITDA was up 4.9% at Rs 747 cr, margins expanded 70 bps to 24.5% and net profit was up 11.2% at Rs 487 cr.

Indusind bank's NII rose 16.4% to Rs 3309 cr while net profit fell 68% to Rs 461 cr. Gross NPA ratio rose to 2.53% from 2.45% q-o-q while net NPA ratio fell to 0.86% from 0.91%. Provision rose to Rs 2259 cr from 431 cr. Moratorium number fell to 16% of loan book from 50% in April.

OUTLOOK

Today morning, Hang Seng and Shanghai are little changed while Nikkei is down 0.8%. SGX Nifty is suggesting a modestly higher start for our market.

In yesterday's report we had reiterated the view that 11244, the upper end of the gap created by gap-down opening on 6th March, continued to be immediate hurdle and that above 11244, 11390, the top made on 5th March, would be the next target/hurdle.  

Nifty crossed 11244 hurdle and surged all the way to 11317 before closing at 11300.

11390, the top made on 5th March, continues to be the next target/hurdle above which 11433, the top made on 2nd March, would be the next target.

Immediate support on the hourly chart has moved up to 11115, with the stop-loss of which, trading longs should be held on to.

Maruti, Bharti Airtel and Dr Reddy will report their quarterly earnings today.