US INDICES SOAR ON “GOLDILOCKS” JOBS REPORT; 8280 IMMEDIATE HURDLE IN NIFTY

US INDICES SOAR ON “GOLDILOCKS” JOBS REPORT; 8280 IMMEDIATE HURDLE IN NIFTY

WORLD MARKETS                             

US indices soared 1.2%-1.5% on Friday as investors cheered a jobs report that showed economic growth but not enough, in the eyes of most, to warrant central bank tightening immediately.

April's U.S. nonfarm payrolls report showed a rebound in job growth to 223,000, but slower wage growth at just a tenth of a percent. The improvement from March's 85,000 jobs calmed some nerves over the state of the U.S. economy, but wage growth was not enough, in the eyes of most traders, to warrant central bank tightening immediately March’s disappointing report was revised lower for the weakest figure since June 2012.

Bond yields edged lower, with the U.S. 10-year ending the week at 2.14%, after falling as low as 2.11% in intraday trade. The U.S. bond market had sold off sharply in the previous week, following gains in the German bund yield amid anticipation that Friday's report could induce a rate hike sooner rather than later.

Wholesale inventories rose 0.1% in March, versus 0.3% gain estimates.

European markets gained 2%-2.6% after a more decisive-than-expected U.K. election outcome by the center-right Conservative party. Sterling surged against the dollar on the news, trading as high as $1.5511, compared with around $1.5253 overnight, and hung onto most gains throughout the trading day

Nymex oil rose 45 cents to $59.39 a barrel. Brent fell 15 cents to $65.39 a barrel.

For the week Dow and S & P 500 gained 0.9% and 0.4% respectively while Nasdaq ended a tad lower. European markets gained 0.4%-2.2%

The People's Bank of China (PBOC) yesterday announced a cut in its benchmark lending rate and one-year deposit rates by 25 basis points, marking third such cut since November, in a bid to arrest slowing growth.

AT HOME

After a gap up opening, benchmark indices extended the gains though rest of the session to end with hefty gains of little less than 2%, breaking the 3-day losing streak. Sensex soared 506 points to settle at 27105 while Nifty finished at 8191, up 134 points. BSE mid-cap and small-cap indices gained 1.7% each. Except a 1.6% cut in BSE Consumer Durable index, all the sectoral indices ended in green with Realty index leading the tally, up 4.1%, followed by 2.7% rise in Auto index.

FIIs net sold stocks worth Rs 438 cr but net bought index futures and stock futures worth Rs 195 cr and 1115 cr respectively. DIIs were net buyers to the tune of Rs 1114 cr.

Rupee appreciated 30 paise to end at 63.93/$.

PNB plunged after reporting 62% dip in fourth quarter net profit at Rs 307 cr. NII fell 5.3% to Rs 3791 cr. Gross NPAs climbed to 6.55% from 5.97% q-o-q. Net NPAs rose to 4.06% from 3.82%.

HUL reported 16.7% rise in net profit at Rs 1018 cr supported by exceptional gain of Rs 179 cr. Total income grew by 8.2% to Rs 7675 cr. Volume growth stood at 6%. Operating margin expanded by 200 bps to 17.2%.

For the week, Sensex and Nifty gained 0.3% and 0.1% respectively, breaking the three-week losing streak.     

OUTLOOK

Today morning Nikkei is up more than a percent, Shanghai and Hang Seng are up just under a percent and SGX Nifty is suggesting about 40 points higher opening for our market.

On Friday, Nifty had surged 134 points to end at 8191. A 60 point gap up today will take it closer to 8250.

200 DMA as well as a trendline adjoining recent tops on daily chart are placed around 8280 and that would be the immediate hurdle on the way up, a crossover of which would open up the space for the further upside till about 8420 where the 34-week moving average is placed.

On the way down, 7997, the low made last week, is the crucial support to eye.

Traders are advised to wait for the crossover of 8280 for initiating fresh longs. Existing longs can be held with the stop loss of 8120, the low made on Friday.

BoB will report its quarterly earnings today.

RUPEE TUMBLES TO 20-MONTH LOW; NIFTY HOLDS 7961 SUPPORT

RUPEE TUMBLES TO 20-MONTH LOW; NIFTY HOLDS 7961 SUPPORT

WORLD MARKETS                             

US indices gained in the vicinity of half a percent helped by a surge in tech stocks ahead of the key April jobs report.

Initial jobless claims rose 3,000 to a seasonally adjusted 265,000 for the week ended May 2. Claims for the prior week were unrevised at 262,000, which was the lowest reading since April 2000.

Benchmark U.S. 10-year note yields traded as high as 2.27% before edging down to around 2.23%. Nymex crude fell $2 or 3.3% to $58.94 a barrel. Dollar index rose to 94.62 with the euro back below $1.13. Gold fell $8 to $1182 an ounce.

European markets ended mixed. FTSE and CAC fell while Germany, Italy and Spain gained.

AT HOME

Benchmark indices ended half a percent lower after a choppy trade. Sensex lost 118 points to settle at 26599 while Nifty finished at 8057, down 40 points. BSE mid-cap and small-cap indices lost 0.9% and 2% respectively. BSE Bankex and Realty indices tumbled 2.3% and 2.2% respectively, becoming top losers among the sectoral indices while IT and Teck indices were the top gainers, putting on 1.6% and 1.3% respectively.

FIIs net sold stocks and index futures worth Rs 1361 cr and 947 cr respectively but net bought stock futures worth Rs 984 cr. DIIs were net buyers to the tune of Rs 1158 cr.

Rupee plunged 69 paise to end at 64.23, marking 20-month low.

Hero MotoCorp reported higher than expected 4.3% rise in revenues at Rs 6794 cr but net profit fell 14% to Rs 476.5 cr on account of one-time loss of Rs 155 cr.

OUTLOOK

Today morning Shanghai is up a percent and half, Hang Seng is up three fourth of a percent, other Asian markets are trading with modest gains SGX Nifty is suggesting about 60 points higher opening for our market.

After Nifty broke the immediate support of 8240 on Wednesday, in yesterday's report we had mentioned that the next support comes in the vicinity of 7961, which was the bottom made in December. 

Nifty plunged 100 points to touch a low of 7997 before recovering to close at 8057 and is set to open with an upward gap today, giving more credence to 7961 support.

7961 continues to be important immediate support a breach of which can take Nifty all the way to around 7600, which is the 38.2% retracement level of the entire 5118-9119 upmove.

On the way up, immediate resistance on the hourly chart is placed around 8200, a crossover of which is required to generate a buy on the hourly chart which can lead to further upside till about 8350.

Traders are advised to wait for the breach of 7960-8200 for taking fresh view on Nifty.

PNB and HUL will report their quarterly earnings today.

Key report to watch out today would be US nonfarm payrolls for April which is expected to an addition of 208,000, after posting its worst report since December 2013 in March with the creation of 126,000 jobs. The key point to watch out would be wage growth, which could indicate an increase in inflation and support an interest rate hike. Unemployment rate is expected at 5.4%.

LARGEST FALL IN FOUR MONTH TAKES NIFTY TO FOUR AND HALF MONTH LOW

LARGEST FALL IN FOUR MONTH TAKES NIFTY TO FOUR AND HALF MONTH LOW

WORLD MARKETS                             

US indices fell about half a percent, spooked by higher bond yields and ADP jobs report.

ADP employment report showed 169000 jobs created in April, missing expectation for a rise of 200000. While the ADP report focuses on the U.S. private sector, it is usually seen as a pre-cursor to the all-important nonfarm payrolls data. In other economic news, unit labor costs for the first quarter rose 5% but productivity fell 1.9%, a tad more than the expected 1.8% decline. Weekly mortgage applications fell 4.6%.

Meanwhile, comments from Federal Reserve chair Janet Yellen that the equities market is overvalued added to the market anxiety.

Dollar index fell more than a percent to 94.16 from 95.14. Euro topped $1.13 for the first time since the end of February.

Yields on the 10-year U.S. Treasury hit a high of 2.25%, with the 30-year yield at 2.99%.

European markets gained upto 0.4%. Eurozone final composite PMI for April came in at 53.9, above a flash estimate of 53.5.

Nymex oil rose 53 cents to $60.93 a barrel.

AT HOME

It was carnage on Dalal Street as benchmark indices plunged more than two and a half percent, registering the largest single day fall in four months and closing at the lowest level in nearly four and a half month. Sensex sank 723 points to settle at 26717 while Nifty finished at 8097, down 228 points. BSE mid-cap and small-cap indices lost 3.3% and 3.1% respectively. All the BSE sectroal indices ended in red with Capital Goods and Realty indices leading the tally, giving away 4.2% and 4% respectively.

India's HSBC services PMI fell to a three month low of 52.4 in April from 53 in March. The composite PMI eased to 52.5 from 53.2.

FIIs net sold stocks and index futures worth Rs 1700 cr and 1925 cr respectively but net bought stock futures worth Rs 1832 cr. DIIs were net buyers to the tune of Rs 1455 cr.

Rupee fell 10 paise to end at 63.54/$.

The Lok Sabha yesterday passed the much-delayed Constitution Amendment Bill to Goods and Service Tax (GST), paving the way for a new bill on the uniform tax regime, even as the Congress Party staged a walkout in protest. However, the Bill is likely to face stiff opposition at the Rajya Sabha and may be routed to the Standing Committee.

Amara Raja, Castrol, Ceat, Bajaj Finance, Pidilite, Page Industries and SRF will be included in derivative segment from May 29.

OUTLOOK

Today morning Asian markets are down 0.5%-1% and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that trading longs can be held on to with the stop loss of 8240. Nifty breached this level in the first hour itself and plunge all the way to 8083 before closing at 8097.

7961, the bottom made in December, is the next support to eye on the way down. A breach of 7961 can take the benchmark all the way to 7600, which is the 38.2% retracement level of the entire 5118-9119 upmove seen between August 2013-March 2015.

Immediate resistance on the hourly chart is placed around 8240, with the stop loss of which trading shorts can be held on to.

Hero Motocorp will report its quarterly earnings today.

US, EUROPE TUMBLE ON US TRADE DATA, GREEK WORRIES; 8240 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

US, EUROPE TUMBLE ON US TRADE DATA, GREEK WORRIES; 8240 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

WORLD MARKETS                             

US indices ended with steep cuts of 0.8%-1.6% yesterday amid renewed concerns over the state of the U.S. economy and Greece.

The March trade deficit came in at $51.4 billion, above expectations and the largest since 2008 as imports surged, which sparked concerns about economic growth for the first quarter. February's figure was increased slightly to $35.9 billion from $35.4 billion. On the positive side, April's non-manufacturing ISM hit a five-month high, coming in at 57.8 versus the expected 56.3 and March's 56.5. 

Longer-term bond yields extended gains after the economic reports, with the U.S. 10-year Treasury yield hitting a high of 2.22 percent for the first time since March 10.

Greek stocks and bonds sold off on media reports that the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns. Germany's finance minister later rebuffed the report. Athens is facing a 750-million-euro ($832 million) debt repayment to the International Monetary Fund next week, but there are fears it will run out of cash unless it reaches a deal with creditors to unlock the next tranche of bailout money.

Nymex oil shot up $1.47 or 2.5% to $60.40 a barrel, its highest since December 10. Brent climbed $1.05 to $67.50.

European markets, except a 0.8% lower FTSE, saw steep cuts in the vicinity of two and a half percent. Meanwhile European Commission raised eurozone economic growth forecast for 2015 to 1.5% from 1.3%.

Earlier, Chinese shares plummeted 4% amid reports of brokerages raising margin requirements.

AT HOME

Benchmark indices ended modestly lower after a choppy trading session. Sensex settled at 27440, down 50 points while Nifty lost 7 points to finish at 8325. BSE mid-cap and small-cap indices however gained 0.1% and 0.6% respectively. BSE Metal index soared 2.9%, becoming top gainer among the sectoral indices, followed by 1% rise in Oil & Gas index. Power and Consumer Durable indices lost 0.8% and 0.6% respectively.

Kotak Mahindra reported better-than-estimated 29.4% rise in fourth quarter net profit at Rs 527 cr. NII rose 16.2% to Rs 1123 cr. Gross NPA improved to 1.85% from 1.87% sequentially and Net NPAs improved to 0.92% from 0.97%. The bank announced issue of bonus shares in the ratio of 1:1.

FIIs net sold stocks and index futures worth Rs 757 cr and 924 cr respectively but net bought stock futures worth Rs 1030 cr. DIIs were net buyers to the tune of Rs 979 cr.

Rupee depreciated 2 paise to end at 63.44/$.

Congress yesterday supported Goods and Services Tax (GST) in Lok Sabha but opposed some of the provisions of the bill on it introduced by the BJP government, demanding that it be sent to the Parliamentary Standing Committee, which was supported by parties like AIADMK and BJD. TMC said it was "broadly supporting" the bill while AIADMK said it was against it as Tamil Nadu ruled by it would lose over Rs 10000 crore due to the new tax structure.

The Real Estate (Regulation and Development) Bill 2013 will be referred to a Select Committee by the Rajya Sabha today.

OUTLOOK

Today morning Shanghai and Hang Seng are trading modestly higher, other Asian markets are in red and SGX Nifty is suggesting about 35 points lower opening for our market.

After Nifty crossed the immediate hurdle of 8308 on Monday, we had recommended going long with the stop loss of 8240 for the target of about 8500. That continues to be the view.

NIFTY TAKES OUT 8308 HURDLE; STAY LONG WITH THE STOP LOSS OF 8240

NIFTY TAKES OUT 8308 HURDLE; STAY LONG WITH THE STOP LOSS OF 8240

WORLD MARKETS                             

US indices gained a quarter of a percent yesterday following positive momentum from Europe and as earnings came in better than expected.

Factory orders for March showed a gain of 2.1%, the biggest increase in eight months and above expectations of a 1.9% increase. 

European markets gained 0.4%-1.4%. The final euro zone manufacturing Purchasing Managers' Index (PMI) for April came in at 52.0, above a flash reading of 51.9 but slightly below March's figure of 52.2.

Nymex oil fell 0.37% to $58.93 a barrel. Gold rose $12.3 to $1187 an ounce.

AT HOME

Benchmark indices soared just under 2% in today's trade, registering the largest single day gain in nearly two months for Nifty and a month for Sensex. Sensex settled at 27491, up 479 points while Nifty finished at 8332, up 150 points. BSE mid-cap and small-cap indices gained 1.3% and 2.1% respectively. All the BSE sectoral indices ended higher with Oil & Gas and Realty indices leading the tally, climbing 3.5% and 2.5% respectively.

FIIs net bought stocks and stock futures worth Rs 61 cr and 749 cr respectively but net sold index futures worth Rs 280 cr respectively. DIIs were net buyers to the tune of Rs 147 cr.

India's HSBC manufacturing PMI fell to 51.3 in April from March's 52.1.

IT services major Cognizant reported better-than-expected 6.2% q-o-q in dollar revenue and also upped its revenue growth guidance for the 2015 fiscal to 19.3% from 19% (to USD 2.92 bn from 2.88 bn).

OUTLOOK

Today morning, except a modestly higher Hang Seng, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

In yesterday's report we had mentioned that a crossover of 8308 would generate a buy on the hourly chart and can take Nifty to around 8500.

The benchmark yesterday soared 150 points to settle at 8332, crossing this hurdle decisively.

Next target to eye on the way up continues to be around 8500. Immediate support on the hourly chart is placed around 8240, with the stop loss of which trading longs can be held on to.