NIFTY AGAIN RESISTED NEAR 8595 MARK; 8475 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY AGAIN RESISTED NEAR 8595 MARK; 8475 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.3%-0.4% with the Dow snapping 9-day winning streak, reacting to fall in oil and consolidating gains ahead of next week's Fed meeting.

US oil fell 2.2% to $44.75 a barrel. Brent fell 2.1% to $46.20.

Earnings were mixed. Southwest Airlines, Sherwin-Williams, and Intel were among the notable disappointments while GM and Ebay topped estimates.

Initial jobless claims fell by 1000 to 253000, lower than the expectation of 265000 figure.

European markets ended mixed with modest changes. European Central Bank left key interest rates unchanged as expected. ECB President Mario Draghi, at a press conference, said that the central bank was ready to act if necessary but officials wanted to "reassess the underlying macroeconomic conditions" and data before making a decision.

Dollar index eased to 96.96 from 97.14. Gold rose 0.9% to $1331.

AT HOME

The day belonged to bears as benchmark indices, after trading in a narrow range in the morning, slipped in the noon session to end lower by about seven tenth of a percent. Sensex lost 205 points to settle at 27711 while Nifty finished at 8510, down 56 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Power index fell 2.1%, becoming top loser among sectoral indices, followed by 1.7% cut in Utilities index and Bankex. Telecom and FMCG indices gained 0.2% each.

FIIs net bought stocks and index futures worth Rs 420 cr and 332 cr respectively but net sold stock futures worth Rs 46 cr. DIIs were net sellers to the tune of Rs 372 cr.

Rupee appreciated 2 paise to end at 67.17/$.

HDFC Bank reported in-line with estimated 20.14% rise in net profit at Rs 3239 cr for the April-June quarter. NII grew 21.8% to Rs 7781 cr. Provisions for bad loans rose 19% y-o-y and 31% q-o-q to Rs 867 cr. Asset quality slightly weakened with gross NPAs rising 10 bps q-o-q to 1.04% and net NPA by 4 bps to 0.32%.

ITC reported profit growth of 10.1% at Rs 2385 cr. Revenue rose 8.3% to Rs 13253 cr. Operating profit grew 8.4% to Rs 3526 cr and margin remained unchanged at 26.6%. Cigarette volumes grew at 3%.

Kotak Mahindra was a slight miss on earnings and asset quality also weakened. Standalone net profit rose 291% to Rs 742 cr y-o-y. NII grew 20.1% to Rs 1919 cr. Provisions for bad loans jumped 41.2% y-o-y and 10.4% q-o-q to Rs 179.5 cr. Gross NPA rose 14 bps to 2.5% and net NPA 15 bps to 1.21%.

OUTLOOK

Today morning Nikkei is down nearly a percent and the yen is trading stronger against the dollar after Bank of Japan governor, in a BBC interview broadcast yesterday, ruled out the possibility of "helicopter money" - the colloquial name for "money-financed fiscal programs" - to tackle deflation in Japan, amid building expectations that policymakers were gearing up to introduce more stimulus.

Other Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that in the latest weekly and subsequent daily reports we had mentioned that after a steep run-up, Nifty had formed a negative divergence on the hourly chart and a consolidation/correction in the short term cannot be ruled out.

The benchmark has traded in a narrow range this week and yesterday, after touching a high of 8585, slipped to end at 8510, vindicating above view.

As we have been mentioning, 8595, the top made last week, continues to be the immediate hurdle to eye, a crossover of which is required for fresh upmove. On the way down 8475 continues to be immediate support, a breach of which can take Nifty to 8400.

Axis Bank will report its quarterly earnings today.

8475-8595 CONTINUES TO BE IMMEDIATE RANGE

8475-8595 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

While Dow and S & P 500 gained 0.2% and 0.4% respectively, Nasdaq soared 1.1% yesterday on the back of better-than-expected earnings.

Microsoft soared more than 5% following a beat on earnings and revenue as its cloud product Azure saw revenue growth of 102%. Morgan Stanley joined positive bank results streak by reporting earnings of 75 cents per share versus consensus expectations of 59 cents.

U.S. housing starts rose more than expected in June. Fed funds futures rates showed an uptick in rate hike expectations.

The U.S. dollar hit a four-month high at 97.14. Gold fell 1.4% to $133 per ounce.

US oil rose 29 cents to $44.94 after weekly EIA data showed U.S. crude oil inventories fell by 2.3 million barrels for the ninth consecutive decline in stockpiles. Brent rose more than a percent to $47.

European markets gained 0.5%-1.6% with DAX leading the tally. Sterling moved higher after UK's unemployment rate fell to 4.9% in three months to May, hitting its lowest since 2005 and a report on economic impact from last month's Brexit vote, by the Bank of England, showed no clear evidence of slowing economic activity, with signs that demand for credit was easing and companies did not expect any near-term impact on capital spending.

AT HOME

After a positive start, benchmark indices added some more gains through the session to end with gains of nearly half a percent, with Nifty closing at fresh 11-month high. Sensex added 128 points to settle at 27916 while Nifty finished at 8566, up 37 points. BSE mid-cap and small-cap indices gained 0.9% and 1% respectively. Except a 0.2% and 0.1% cut in BSE Consumer Durable and Telecom indices respectively, all the sectoral indices ended in green with Healthcare and Realty indices leading the tally, up 2.4% each.

FIIs net bought stocks and index futures worth Rs 215 cr and 46 cr respectively but net sold stock futures worth Rs 875 cr. DIIs were net sellers to the tune of Rs 45 cr.

Rupee depreciated 10 paise to end at 67.20/$.

OUTLOOK

Today morning, Nikkei is up more than a percent on weaker Yen and stimulus hopes. Other Asian markets are trading with modest gains and SGX Nifty is suggesting a flattish start for our market.

After Nifty bounced back from our indicated 8475 support on Tuesday, in yesterday's report we had said that traders should wait for the breach of 8475-8595 range where 8595 is the top made last week. Yesterday, the benchmark builded on Tuesday's recovery by gaining 37 points to end at 8566.

8595-8475 continues to be immediate range, a breach of which, on either side, is required for the fresh upmove. While 8655, the top made last July, would be the immediate target above 8595, looking at the weekly charts, a decisive crossover of 8595 would open up the space for the further upside till about 8845, the top made in April 2015. Below 8475, 8400 would be the next downside target to eye.

ITC, HDFC Bank and Kotak Mahindra Bank will report their quarterly earnings today.

ECB will hold its first monetary policy meeting since the U.K. voted on June 23 to leave the European Union.

NIFTY REBOUNDS AFTER TESTING 8475 SUPPORT; 8595 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER TESTING 8475 SUPPORT; 8595 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices ended mixed with Dow rising 0.1% while S & P 500 and Nasdaq fell 0.1% and 0.4% respectively

Netfilix tumbled 14% after beat on earnings Monday but subscriber numbers that missed guidance. Bank earnings continued to surprise with Goldman Sachs posting better-than-expected results yesterday.

U.S. housing starts rose more than expected in June, at a pace of 1.19 million units.

In its World Economic Outlook published yesterday, the IMF lowered its 2016 global growth forecast by 10 bps to 3.1%. 2017 forecast was also cut by 10 bps to 3.4%.

European markets, except a flat FTSE, fell between 0.5%-0.8%. The Zew Institute's German economic index, owing to Brexit uncertainty, fell to -6.8 in July, the lowest level since November 2012, from 19.2 in the previous month. U.K. inflation rose 0.5% y-o-y in June.

WTI oil fell 59 cents or 1.3%to $44.65 per barrel. Brent settled at $46.66.

Dollar index rose to hit its highest level since March 10.

AT HOME

After trading in a narrow range in first half, benchmark indices tuned volatile later, first falling about three fourth of a percent from the top of the day and then recouping all the losses to finally end higher by about a fifth of a percent. Sensex settled at 27788, up 41 points while Nifty added 20 points to finish at 8529. BSE mid-cap index gained 0.2% but the small-cap index fell 0.1%. BSE Oil & Gas and Energy indices gained 1.9% and 1.4% respectively, becoming top gainers among the sectoral indices while FMCG and Consumer Durable indices were the top losers, down 0.6% and 0.3% respectively.

FIIs net bought stocks and index futures worth Rs 549 cr and 553 cr respectively but net sold stock futures worth Rs 236 cr. DIIs were net sellers to the tune of Rs 377 cr.

Rupee appreciated 10 paise to end at 67.10/$.

Ultratech's profit and operational numbers beat expectations but revenue was a miss. Net profit climbed 26% to Rs 758 cr while revenue rose 3.8% to Rs 6232 cr. Sales volume was up 6.4% to 13.20 mn tonne. Operating profit grew by 23.4% to Rs 1422 cr and margin expanded by 362 bps to 22.82%.

Wipro's IT services revenue matched estimates but margin and Q2 guidance disappointed. Dollar revenue rose 2.6% q-o-q at USD 1931 mn. In rupee terms revenue rose 2.4% to Rs 13109 cr and profit fell 8.3% to Rs 2052 cr. Operating profit slipped 5.5% and margin contracted by 109 bps. The company guided for revenue of USD 1931-1950 mn for Q2, implying a growth of just 0.01-1% over Q1.

In line with its Budget announcement, the government yesterday announced infusion of Rs 22915 cr into 13 public sector banks to help them cope with their non-performing loans and shore up their capital levels.

OUTLOOK

Today morning Nikkei is down about 0.7% but other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had reiterated the view that 8475 continues to be immediate support. The benchmark, after touching a low of 8477, rebounded to close at 8529, holding on to this support.

8475 continues to be immediate support on the hourly chart, a breach of which will generate a sell on the hourly chart and next support to eye in that case would be 8400, which is the 61.8% retracement level of the last 8284-8595 upmove.

On the way up, 8595, the top made last week, continues to be immediate hurdle a decisive crossover of which will open up the space for further upmove till about 8845, the top made in April lat year.

Traders are advised to wait for the breach of 8475-8595 range for taking a fresh view on Nifty.

NIFTY EASES AFTER NEGATIVE DIVERGENCE AS EXPECTED; 8475 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY EASES AFTER NEGATIVE DIVERGENCE AS EXPECTED; 8475 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.1%-0.5% yesterday with the Dow and S & P closing at fresh record highs.

Following Citigroup and JPMorgan Chase last week, Bank of America was the third big US financial institution to top second-quarter profit forecasts, reporting earnings per share of 36 cents versus an expected 33 cents yesterday. IBM beat expectations with earnings per share of $2.95 versus estimates of $2.89. Netflix reported better-than-expected earnings but subscriber numbers missed the company's own guidance

WTI crude fell 71 cents to $45.24/bbl and Brent settled down 1.4% at $46.96.

On the data front, U.S. homebuilder sentiment fell 1 point in July.

European markets ended mixed with modest changes. British semiconductor giant ARM soared 41% after Softbank announced that it would pay £17 per share for ARM Holdings, a 43% premium on Friday's closing price, in an all-cash deal.

The British pound rose half a percent to $1.33 after Bank of England policy member Martin Weale said he was unsure about the need for an interest rate cut in August.

AT HOME

After gaining about half a percent in the first half, benchmark indices tumbled just under a percent from the top of the day in last half to end lower by about a third of a percent. Sensex lost 90 points to settle at 27747 while Nifty finished at 8509, down 33 points. Except a 0.4% and 0.3% rise in BSE Auto and IT indices respectively, all the sectoral indices ended in red with Telecom index leading the tally, down 3.2%, followed by 1.6% cut in Oil & Gas index.

FIIs net bought stocks and index futures worth Rs 599 cr and 807 cr respectively but net sold stock futures worth Rs 393 cr. DIIs were net sellers to the tune of Rs 439 cr.

Rupee depreciated 14 paise to end at 67.20/$.

HUL reported in-line with estimated profit growth but disappointed on top line and volume front. Net profit rose 9.8% to Rs 1174 cr and income rose 3% to Rs 8128 cr. Volume growth stood at 4%.

OUTLOOK

Today morning, except a modestly higher Nikkei, other Asian markets are trading with cuts of upto 0.7% and SGX Nifty is suggesting about 15 points higher start for our market.

In our weekly report we had mentioned that Nifty has formed a negative divergence on hourly chart after a steep run-up and a consolidation/correction in the short term can't be ruled out.

Yesterday, the benchmark, after touching a high of 8587 in the first half, slipped later to end at 8509, vindicating this view.

8475 continues to be immediate support on the hourly chart, a breach of which will generate a sell on the hourly chart and next support to eye in that case would be 8400, which is the 61.8% retracement level of the last 8284-8595 upmove.

8595, the top made last week, should be seen as the immediate hurdle now, a crossover of which would be required for fresh upmove.

Wipro and Ultratech Cement will report their quarterly earnings today.

8655 CONTINUES TO BE MAJOR TARGET; 8475 IMMEDIATE SUPPORT

8655 CONTINUES TO BE MAJOR TARGET; 8475 IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow ended marginally higher while S & P 500 and Nasdaq lost 0.1% each on Friday, pausing after a massive rally over past couple of days.

US Retail sales beat expectations, rising 0.6% in June versus consensus of a 0.1% increase. Consumer prices increased 0.2% last month, marking the fourth straight month of uptick. Preliminary reading of University of Michigan's consumer sentiment index came in at 89.5, lower than the expected 93 mark.

Wells Fargo reported results in-line with consensus, and Citigroup reported better-than-expected earnings.

The Turkish lira plummeted against the dollar and the euro after an apparent attempted coup against the Turkish government.

WTI oil rose 27 cents or 0.6% to $45.95 a barrel. Gold fell $5 to $1327 per ounce.

European markets, except a 0.2% higher FTSE, ended with cuts of upto 0.3% following a terror attack in France that killed at least 84 people.

Earlier data from China showed that economy expanded faster-than-expected in the second quarter with gross domestic product growing 6.7%, helping to allay fears about trouble in the world's second-largest economy.

For the week, Dow soared 2% while S & P 500 and Nasdaq gained 1.5% each, extending the winning streak to third straight week and closing at record high. In Europe, FTSE rose 1.2% while DAX and CAC climbed more than 4%. In Asia, Nikkei jumped 9.2%, Hang seng added 5.3% and Shanghai rose 2.2%.

AT HOME

After scaling fresh 11-month high in the initial trade, benchmark indices, weighed down by big cut in Infosys stock on the back of disappointing earnings, slipped to end lower by about a third of a percent on Friday. Sensex lost 106 points to settle at 27836 while Nifty finished at 8541, down 24 points. BSE mid-cap index gained 0.1% while the small-cap index fell 0.7%. BSE IT index plunged 5.4%, becoming top loser among the sectoral indices followed by 3.9% lower Teck index. Telecom index climbed 2.3% to become top gainer, followed by 1% higher Auto index.

FIIs net bought stocks and index futures worth Rs 1461 cr and 723 cr respectively but net sold stock futures worth Rs 774 cr. DIIs were net sellers to the tune of Rs 1034 cr.

Rupee depreciated 15 paise to end at 67.06/$.

Infosys nosedived after it June quarter results and full year guidance disappointed. Net profit fell 4.5% q-o-q to Rs 3436 cr and revenue rose 1.4% to Rs 16782 cr. Revenue in dollar terms grew by 2.2% to USD 2501 mn and constant currency dollar revenue growth stood at 1.7%. The company lowered its FY17 constant currency revenue growth guidance to 10.5-12.5% from 11.5-13.5% earlier.

Reliance Industries, as against the expectation of an 11% sequential drop, reported a 4.5% growth at Rs 7548 cr as GRM's jumped to a record $11.5/bbl v/s previous quarters $10.8 and expected figure of $9.8. However out of this $2 were on account of inventory gain, stripped of which GRM were roughly in-line with estimates.

June trade data showed that exports rose 1.3% to USD 22.57 bn, showing a positive growth after 18 consecutive months of contraction. Trade deficit however widened to the highest level of 2016 at USD 8.11 bn from 6.27 bn, as imports rose to 30.68 bn.

Oil marketing companies cut petrol and diesel prices by Rs 2.25 and 42 paise per liter respectively.

For the week, Sensex and Nifty gained 2.6% each.

OUTLOOK

Today morning, except a modestly lower Shanghai, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting about 25 points higher start for our market.

Nifty, on Friday, after touching a high of 8595 in the initial trade, eased to close at 8541 but is set to open higher today.

As we have been mentioning, 8655, the top made in July 2015, which is also the 52-week high, continues to be major upside target.

Immediate support on hourly chart has moved up to 8475, which should serve as the revised stop loss for trading longs.

HUL will report its quarterly earnings today.

Monsoon session of the Parliament starts today. There are 11 bills pending in Lok Sabha and 45 bills pending in Rajya Sabah. Most important among them would the GST.

NIFTY ON TRACK TO ACHIEVE 8655 TARGET; TRAIL STOP LOSS TO 8475

NIFTY ON TRACK TO ACHIEVE 8655 TARGET; TRAIL STOP LOSS TO 8475

WORLD MARKETS                             

US indices gained 0.5%-0.7% yesterday with the Dow and S & P 500 closing at an all-time high for the third and fourth consecutive day respectively.

In the key corporate earnings JPMorgan Chase beat estimates and BlackRock was in line with expectations.

Weekly jobless claims showed no change week over week. June reading of the producer price index showed an increase of 0.5%, above the expected 0.3% rise.

Oil prices bounced back with U.S. crude settling 2.1% higher at $45.68 a barrel. Gold fell $11 to $1332 per ounce.

British pound rose to a two-week high of $1.3480, following the Bank of England's (BOE) decision to leave its interest rates on hold, despite market expectations for a cut. There were, however, strong hints of easing in August.

European markets, except a 0.2% lower FTSE, gained 0.9%-1.4%.

AT HOME

After trading in a narrow range in the morning session, benchmark indices spiked up in noon trade to end half a percent higher and scale fresh 11-month high. Sensex added 127 points to settle at 27942 while Nifty finished at 8565, up 45 points. BSE mid-cap and small-cap indices rose 0.5% and 0.7% respectively. BSE Consumer Durable index and Bankex climbed 2.2% and 1.5% respectively, becoming top gainers among the sectoral indices while Healthcare index was the top loser, down 0.3%, followed by 0.2% cut in IT and Realty indices.

FIIs net bought stocks and index futures worth Rs 870 cr and 461 cr respectively but sold stock futures worth Rs 465 cr. DIIs were net sellers to the tune of Rs 874 cr.

Rupee appreciated 14 paise to end at 66.91%.

India's wholesale price index (WPI) rose 1.62% y-o-y in the month of June, compared to 0.8% in May, and ahead of expectations of 1.15%.

TCS reported better-than-expected profit and operational performance in April-June quarter while revenue was in-line. Dollar revenue grew 3.7% q-o-q to USD 4362 mn and constant currency growth was 3.1%. Rupee revenue increased 3% to Rs 29305 cr. Net profit fell 0.4% to Rs 6318 cr. EBIT fell 0.9% to Rs 7347 cr and margin contracted by 95 bps to 25.1%. Profit and margin were expected to fall 4.7% and 135 bps respectively.

OUTLOOK

China's June quarter GDP growth has come in at 6.7% same as that of previous quarter but a tad higher than expected 6.6% mark. June industrial output growth stands at 6.2%, up from May's 6% and expected 5.9% figure. July retail sales are up 10.6%, beating previous reading and expected figure of 10%.

Asian markets are trading with gains of upto a percent with Nikkei on the top and SGX Nifty is suggesting about 30 points higher start for our market.

Nifty gained 45 points yesterday to end at 8565 and a positive start today will take the benchmark closer to 8600 mark and also to our indicated target of 8655, which we have been working with ever since 8243 hurdle was taken out on weekly basis on 1st July.

Immediate support on the hourly chart has moved up to 8475, which should serve as the new stop loss for trading longs.

Reliance Industries and Infosys will report their quarterly earnings today.

Infosys is expected to post dollar revenue growth of 4.1% q-o-q at USD 2547 mn. Margins are expected to fall 165 bps to 23.85% 165 bps on partial wage hike which might lead to 4.2% dip in net profit at Rs 3447 cr. FY17 constant currency dollar revenue growth guidance of 11.5%-13.5% is likely to be maintained.

In case of RIL, profit is expected to fall 11.2% q-o-q to Rs 6500 cr as GRMs are expected to come down to $9.8/bbl from $10.8/bbl.

NIFTY CONSOLIDATES HEADY GAINS; 8400 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY CONSOLIDATES HEADY GAINS; 8400 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow gained 0.1%, S & P 500 ended flat while Nasdaq lost a third of a percent yesterday.

WTI crude fell 4.4% or $2.05 to a two-month low of $44.75 a barrel after data showed US crude stocks fall by 2.54 million last week and a build of 1.2 million gasoline barrels. Brent fell $2.21 or 4.6% to $46.26 a barrel.

U.S. import prices for June rose 0.2%, missing estimates, while export prices gained 0.8%. The Federal Reserve released the latest edition of its Beige Book, which said economic activity in most regions increased at a modest pace.

Dollar index fell about 0.2%. Gold rose $8 to $1344 an ounce.

European markets, except a marginally higher France, ended with cuts of 0.2%-1.2%.

AT HOME

It was time to consolidate hefty gains made over last two days as benchmark indices ended flat after a rangebound but choppy session. Sensex added 7 points to settle at 27815 while Nifty lost 2 points to finish at 8520. BSE mid-cap and small-cap indices however fell 0.6% and 0.8% respectively. BSE Metal and IT indices were the top gainers among the sectoral indices, rising 1.8% and 1% respectively while Realty index plunged 2.1%, becoming top loser, followed by 0.9% cut in Power index.

FIIs net bought stocks, index futures and stock futures worth Rs 291 cr, 673 cr and 154 cr respectively. DIIs were net sellers to the tune of Rs 655 cr.

Rupee appreciated 13 paise to end at 67.05/$.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Nifty touched a high of 8550 before closing at 8520, moving one step forward towards the 8655 target we have been working with ever since 8243, the 61.8% retracement level of the entire 9119-6826 fall was taken out on weekly basis.

8655 continues to be upside target to eye and hold on to trading longs with a trailing stop loss continues to be the advise. Immediate support on the hourly chart continues to be around 8400, which should serve as that stop loss.

Tech major TCS will report its quarterly earnings today. Dollar revenue is seen rising 3.8% q-o-q to USD 4367 mn. In rupee terms while revenue is expected to increase 3% to Rs 29300 cr, net profit is likely to fall 4.7% to Rs 6038 cr. EBIT is likely to fall 2.4% to Rs 7236 cr and margin may contract 135 bps to 24.7%.

June WPI will come out today and is expected at 1.15% as against 0.79% in May.

Bank of England, in its policy meeting today, is expected to cut interest rate by 25 bps.