NIFTY ACHIEVES 8030 TARGET; 8130 NEXT

NIFTY ACHIEVES 8030 TARGET; 8130 NEXT

WORLD MARKETS

US indices gained about three fourth of a percent on Friday and also finished the week with best weekly gains of the year along with halting a four-week losing streak on better-than-expected earnings from Microsoft and P & G.

New-home sales rose 0.2% to a six-year high in September, while the pace of August sales was revised sharply lower.

Markets shrugged of the concern about the Ebola, with a New York City doctor testing positive for the virus, making him the fourth person to be diagnosed with Ebola in the United States and the first in the nation's biggest city.

Nymex crude fell 1.3% to $81 a barrel; gold rose $3 to $1232 an ounce.

Earlier Thursday, U.S. stocks surged after heavy-equipment maker Caterpillar boosted its profit outlook and an unexpected increase in euro-zone manufacturing eased worries about the global economy. For the week, Dow gained 2.6%, S & P 500 soared 4.1% and Nasdaq climbed 5.3%.

Key European markets ended with cuts of about six tenth of a percent on Friday on concerns over the results of Europe's bank stress tests and the first Ebola case in New York.

Media reports suggested that more euro zone banks than previously thought would fail the region-wide stress tests. Actual results on Sunday showed that 25 banks failed the test. However, 12 of those lenders have already raised 15 billion euros this year to repair their finances.

Data on Friday showed that China's new home prices fell 1.3% year on year in September, the first annual drop in nearly two years.

                                                             

AT HOME

Benchmark indices gained a fourth of a percent on the Muhurat Trading on Thursday, extending the winning streak to fifth straight day.

On Wednesday, after a gap up opening, benchmark indices traded in a narrow range through the session and finally ended higher by eight tenth of a percent. Sensex surged 211 points to settle at 26787 while Nifty finished at 7996, up 68 points. BSE mid-cap and small-cap indices gained 1.2% each. All the BSE sectoral indices ended higher with Auto and Capital Goods indices leading the tally, putting on 3% and 2.1% respectively.

FIIs net bought stocks and index futures worth Rs 8 cr and 751 cr respectively but net sold stock futures worth Rs 109 cr. DIIs were net buyers to the tune of Rs 376 cr.

Rupee appreciated 3 paise to close at 61.28/$.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 25 points higher opening for our market.

In Wednesday's report we had mentioned that by crossing the 7928 hurdle, Nifty had broken the lower-top lower-bottom formation and that 8030, the top made on 30th September was the immediate target above which 8130 would be the next hurdle.

Nifty surged to 7996 on Wednesday and extended the upmove on the Muhurat trading day by touching a high of 8032 before closing at 8014, achieving the target mentioned above and vindicating our view.

8130, where the trendline adjoining recent tops on the daily chart is placed, continues to be the next target to eye. Immediate support on the hourly chart is placed at 7880, with the sop loss of which trading longs should be held on to.

HUL will report its quarterly earnings today.

SAMVAT REPORT - "FIRST MILESTONE ACHIEVED, 10460 NEXT"

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NIFTY BREAKS LOWER-TOP LOWER-BOTTOM FORMATION

NIFTY BREAKS LOWER-TOP LOWER-BOTTOM FORMATION

WORLD MARKETS                             

US indices surged between 1.3%-2.4% yesterday, with S & P 500 and Nasdaq registering their largest daily gain for 2014 and extending the rising streak to fourth day.

Boosting the sentiment was data that showed existing home sales in September hit a one-year high and positive earnings from corporate including Apple, Texas Instruments and United Technologies.

Media reports that the ECB could begin buying corporate bonds in the secondary debt markets from as soon as this December, also lifted the sentiment.

Earlier data showed China's GDP grew 7.3% y-o-y in the July-September period, the slowest pace in nearly six years. Still, the figure was above forecasts for a 7.2% rise. September industrial output rose 8% y-o-y, beating estimates, but retail sales and fixed-asset investment both missed expectations.

European markets climbed between 1.7%-2.8% reacting to corporate earnings and ECB stimulus reports.

Nymex crude rose 58 cents to $82.5 a barrel; gold gained $7 to $1252 an ounce.

AT HOME

Benchmark indices ended higher by six tenth of a percent after a choppy trading session, extending the winning streak to third straight session. Sensex gained 146 points to settle at 26576 while Nifty finished at 7928, up 48 points. BSE mid-cap index gained 0.9% while the small-cap index was up 0.2%. Except a 0.8% and 0.1% cut in BSE Oil & Gas and Healthcare indices respectively, all other sectoral indices ended in green, with Realty and Power indices leading the tally, putting on 2.6% each.

FIIs net bought stocks and index futures worth Rs 32 cr and 399 cr respectively but net sold stock futures worth Rs 153 cr. DIIs were net buyers to the tune of Rs 69 cr.

Rupee appreciated 5 paise to close at 61.31/$.

PNB plunged after quarterly earnings missed expectations on all parameters. Net profit rose 13.8% to Rs 575 cr as against expectation of Rs 1224 cr as provisions remained at an elevated level at Rs 1768 cr. NII grew 3.4% y-o-y to Rs 4151 cr. Asset quality worsened with Gross NPAs rising 17 bps sequentially to 5.65% and net NPAs rising by 24 bps to 3.26%.  

HDFC Bank met street expectations with the net profit rising 20.1% to Rs 2380 cr . NII grew by 23.1% to Rs 5511 cr. Net interest margin expanded 10 bps sequentially to 4.5%. Gross NPAs improved to 1.02% from 1.07% q-o-q while net NPAs remained unchanged at 0.3%.

OUTLOOK

Today morning, Asian markets are trading with gains ranging from 0.5%-1.5% and SGX Nifty is suggesting about 70 points higher opening for our market.

As we have been mentioning, Nifty was forming lower-tops and lower-bottoms on the daily chart and negation of this formation was required to turn the near term view positive. In that sense, 7928, the immediate previous top on the daily chart was the key resistance we were watching.

Yesterday, Nifty touched a high of 7936 and closed at 7928, crossing this hurdle on intraday basis.

8030, the top made on 30th September, is the next target to eye on the way up, above which 8130 would be the next hurdle.

Immediate support on the hourly chart is placed at 7850, with the stop loss of which trading longs should be held on to.

Wipro, Kotak Mahindra Bank, HDFC and Asian Paints will report their quarterly earnings today.

7928-7820 IS THE IMMEDIATE RANGE

7928-7820 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

While Dow gained 0.1%, S & P 500 and Nasdaq climbed 0.9% and 1.4% yesterday as shares of Apple inc surged ahead of its earnings.

IBM slid 7.1% after the technology giant and Dow component posted third-quarter earnings short of estimates.

European markets lost between 0.4%-1.5%, reacting to disappointing corporate earnings. SAP and Philips were prominent losers. German producer prices for September were flat compared to the month before, but showed a yearly drop of 1%. Italy's industrial orders showed a gain of 1.5% on the month.

Nymex crude lost 4 cents to $82.7 a barrel; gold rose 0.5% to $1245 an ounce.

AT HOME

After a big gap up opening, benchmark indices traded in a narrow range through the session and finally ended higher by a percent and quarter. Sensex surged 321 points to settle at 26430 while Nifty finished at 7879, up 100 points. BSE mid-cap and small-cap indices gained 1.1% and 0.5% respectively. Except a 0.8% and 0.3% cut in BSE IT and Teck indices respectively, all the sectoral indices ended in green with Auto and Capital Goods indices leading the tally, putting on 2.1% each.

FIIs net bought stocks, index futures and stock futures worth Rs 1040 cr, 1455 cr and 628 cr respectively. DIIs were net sellers to the tune of Rs 166 cr.

Rupee appreciated 8 paise to end at 61.36/$.

ONGC surged after government raised natural gas prices to $5.6 per unit from $4.2 which will significantly boost the earnings of ONGC and deregulated diesel.

Jindal Steel plunged after CBI registered a case of cheating and corruption against the company.

Government yesterday approved the promulgation of ordinance on deallocated Coal Blocks. The government will put in place a transparent e-auction process for allocation of coal mines to both public and private sector.

OUTLOOK

China's Q3 GDP growth has come in at 7.3%, slightly above the market estimate of 7.2%. September industrial output is up 8%, beating the estimate of 7.5%. September retail sales are up 11.6% slightly below the estimated 11.8%.

Asian markets are trading mixed with changes of upto half a percent. SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had reiterated the view that a resumption of the higher-top higher-bottom formation on the daily chart is necessary for turning the near term view decisively bullish and that 7928, the immediate previous top on the daily chart is the important resistance to eye.

7928 continues to be important resistance on the way up. 7856-7820, the gap created by the gap up opening would be the immediate support on the way down.

PNB, HDFC Bank and Cairn will report their quarterly earnings today.

REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

WORLD MARKETS

US indices surged between 1%-1.6% on Friday as investors bet on further stimulus from central banks and corporations including General Electric and Morgan Stanley reported profits that topped expectations.

New-home construction climbed 6.3% in August, signalling improvement in the U.S. residential real-estate market. The preliminary read for consumer sentiment in October came in at 86.4 versus a 84.0 estimate.

In prepared remarks, Fed Chair Janet Yellen voiced concern about income inequality in the United States, saying by some accounts, it is near its highest level in the past 100 years. On Thursday, St. Louis Fed President James Bullard had said that the central bank should think about postponing the end of its bond purchases.

European markets climbed between 2%-3.5%. The Bank of England's Chief Economist, Andrew Haldane, said the central bank may need to keep interest rates lower for longer to reduce the chances of an economic stagnation.

Nymex crude rose 0.1% to $82.8 a barrel, down 3.6% week on week; gold fell 0.2% to $1239 an ounce, posting weekly gain of 1.4%.

For the week, Dow and S & P 500 lost 1% each and Nasdaq was down 0.4%. European markets, except a 0.7% higher DAX, lost between 0.5%-2.6% for the week.

                                                             

AT HOME

Benchmark indices managed to end higher by four tenth of a percent after a choppy trading session. Sensex gained 109 points to settle at 26108 while Nifty finished at 7780, up 31 points. BSE mid-cap index gained 0.3% while the small-cap index lost 0.3%. Except a 4% and 2.7% fall in BSE IT and Teck indices, all other sectoral indices ended higher with Bankex and Capital Goods indices leading the tally, putting on 2.5% and 1.9% respectively. 

FIIs net sold stocks and stock futures worth Rs 1430 cr and 159 cr respectively but net bought index futures worth Rs 1030 cr. DIIs were net buyers to the tune of Rs 737 cr.

Rupee appreciated 39 paise to close at 61.44/$.

Axis Bank reported better-than-expected 20% rise in NII at Rs 3525 cr for the quarter ended September. Net profit rose 18.3% to 1611 cr which was in-line with estimates. Gross and Net NPAs remained unchanged from previous quarter at 1.34% and 0.44%.

For the week, Sensex and Nifty lost 0.7% and 1% respectively, extending the losing streak to fourth straight week.

OUTLOOK

Today morning Nikkei is up more than 3% and other Asian markets are up between 0.5%-1.5%.

BJP came out with flying colors in the assembly election held recently. In Haryana, the party got a majority on its own for the first time, winning 47 of the 90 seats, up from a meagre four in the last elections. In Maharashtra, BJP won 122 of 288 seats, increasing the tally from just 46 seats and emerging as the single largest party.

Taking a major decision on Saturday, government deregulated diesel price. As a result, diesel price fell by Rs 3.37 a litre from Sunday and will move in tandem with international cost henceforth. In another long pending issue, government hiked natural gas tariff to $5.61 per mmbtu from the current $4.2 per mmbtu. The price will be revised every six months.

Reacting to these developments, SGX Nifty is suggesting a whooping 125 higher opening for our market.

This gap up opening would bring Nifty very close to the important 7928 resistance, which is the immediate previous top on the daily chart, a crossover of which is required to break the lower-top lower-bottom formation. 8000 followed by 8160 would be next targets to eye in that case.

EQUITIES, OIL REBOUND FROM LOWER LEVEL; NIFTY CLOSES AT 2-MONTH LOW

EQUITIES, OIL REBOUND FROM LOWER LEVEL; NIFTY CLOSES AT 2-MONTH LOW

WORLD MARKETS

US indices, after opening down by 1%-1.5%, recovered through the session with Dow closing just 0.2% lower while Nasdaq and S & P 500 ended marginally in the green as worries about global growth were offset by mostly better-than-expected U.S. earnings and economic reports.

Claims for jobless benefits dropped to a 14-year low last week, falling by 23,000 to 264,000. Industrial production rose 1% in September, versus expectations of 0.4%. On the flip side, confidence among home builders fell in October after rising to a nine-year high the prior month.

St. Louis Fed President James Bullard said that the Federal Reserve should consider postponing the end of its bond purchase program to stop the drop in inflation expectations.

European markets too recovered quite a bit from intraday lows to end with cuts ranging from 0.2%-1.7%. DAX managed to break into green, up 0.1%. The European Commission moved to ease concerns over Greece by saying it would continue to assist Greece in whatever way was necessary and would ensure a smooth evolution of support for the country after its bailout program finishes.

Nymex crude, after dropping to as low as $79.8 a barrel, rebounded sharply to $82.7, up 1.1% from previous close. Gold fell 0.3% to $1241 an ounce.

AT HOME

After a rangebound trading in the morning trade, benchmark indices saw a sharp fall in the noon tracking weakness in European markets and ended with deep cuts of nearly a percent and half to close at their lowest level in 2 months. Sensex nosedived 350 points to settle at 25999 while Nifty finished at 7748, down 116 points. BSE mid-cap and small-cap indices lost 2.4% and 2.7% respectively. All the BSE sectoral indices ended in red with Consumer Durable and Power indices leading the tally, giving away 4.2% and 2.9% respectively.

FIIs net sold stocks and index futures worth Rs 1128 cr and 725 cr respectively but net bought stock futures worth Rs 363 cr. DIIs were net buyers to the tune of Rs 664 cr.

Rupee plunged 42 paise to close at 61.85/$, a seven-month low.

TCS missed street estimates by small margin. 6.4% q-o-q Dollar revenues rose 6.4% q-o-q to $3929 mn. In rupee terms consolidated revenues rose 7.7% to Rs 23816 cr while net profit was up 4.55% at Rs 5288 cr. EBIDTA margin stood at 26.85%, up 55 bps q-o-q.

Hero Motocorp reported better than expected 58.5% rise in September quarter net profit at Rs 763 cr. Revenues at Rs 6915 cr grew 20.8%, which was slightly below estimate. EBIDTA margin declined by 100 bps to 13.5%, slightly below 13.6% estimate.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes. SGX Nifty is suggesting about 30 points higher opening for our market.

Just to remind our viewers, we have been bearish on Nifty ever since it closed below 7925 on 25th September, confirming a lower-top lower-bottom formation on the daily chart. Since then we have been maintaining that unless we see a resumption of the higher-top higher-bottom formation, the near term view will not turn bullish.

Immediate previous top on the daily chart now stands at 7928, which needs to be crossed for fulfilling above condition.

On the way down, having broken below the 7785 support, the benchmark has open up the possibility of the retest of the 7540 bottom, from where the rally till 8180 had begun. Before that 7650 would be the immediate support to eye.

HCL Tech and Axis Bank will report their quarterly earnings today.

EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

WORLD MARKETS

US indices, after plunging nearly 3% intraday amid worries over global growth and the spread of Ebola, recovered quite a bit in the late noon trade to end with cuts ranging from 0.3%-1.1%.

Reports of diagnosis of another Ebola case in the US weighed on the sentiment. Also, U.S. retail sales fell 0.3% in September, slightly more than the expected 0.2% decline. Business inventories rose less than expected in August. The producer price index for September fell 0.1% as opposed to expectations of a 0.1% gain.

Fed released its "Beige Book" that said the economy is growing at a "modest to moderate" pace.

Bank of America posted a smaller-than-expected loss, while BlackRock reported better-than-expected earnings.

The U.S. 10-year Treasury note yield dipped below 2 percent for the first time since May 2013. Nymex crude settled down 6 cents to $81.8 a barrel; Gold rose $10.5 to $1242 an ounce.

European markets nosedived between 2%-4%. Greece plunged 6% on political uncertainty. Greek Prime Minister won a confidence vote last week, which called for lawmakers to back plans to exit an international bailout program early.

Greek bond yields crossed 7% threshold while 10-year German yields fell to another record on safe haven buying.

                                                             

AT HOME

On Tuesday, benchmark indices ended with modest cuts after a choppy trading session. Sensex lost 35 points to settle at 26349 while Nifty finished at 7864, down 20 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Realty index nosedived 9.2%, becoming top loser among the sectoral indices, followed by 0.8% cut in IT index. Power index and Bankex gained 0.5% each.

FIIs net sold stocks and index futures worth Rs 695 cr and 303 cr respectively but net bought stock futures worth Rs 93 cr. DIIs were net buyers to the tune of Rs 496 cr.

Rupee fell 31 paise to close at 61.41/$.

DLF plunged after SEBI barred the company from accessing the capital market for three years for non-disclosure of its 2007 IPO documents.

WPI inflation for September cooled off to a 5-year low at 2.38% vs 3.74% in August on lower food and fuel price.

India's trade deficit in September widened to a 16-month high of $14.25 bn as imports surged 26% y-o-y to $43.2 bn while exports grew a tepid 2.7% to $28.9 bn.

OUTLOOK

Today morning, Nikkei is down more than 2% on strengthening yen. Other Asian markets are trading with average cuts of a percent. SGX Nifty is trading at 7880, which is 15 point lower than Tuesday's closing of Nifty future.

In the assembly election held yesterday, Haryana recorded all-time high 73% turnout while Maharashtra saw 64% turnout. Most of the exit polls predicted that BJP will form government in both the states.

While Nifty has been repeatedly bouncing back from the crucial 7785 support, we have been indicating that the resumption of higher-top higher-bottom formation is required to turn the near term view bullish. Therefore, in Tuesday's report we had termed 7785-7972 a no-trading zone where 7972 is the immediate previous top on the daily chart.

That continues to be the view. Traders are advised to wait for the crossover of 7785-7972 range on either side for taking a fresh view on Nifty. A breach of 7785 can take Nifty all the way to 7540 while a crossover of 7972 can take it in the vicinity of 8180.

TCS and Hero Moto Corp will report their quarterly earnings today.