9350 BELOW 9418

9350 BELOW 9418

WORLD MARKETS                             

US indices gained 0.3%-0.7% yesterday after suffering their worst fall of 2017 on Wednesday.

Brent and WTI oil gained 0.2% each to settle at $52.61 and $49.46 a barrel respectively.

Weekly jobless claims totaled 232,000, below the expected 240,000. The Philadelphia Federal Reserve business index rose to 38.8 in May from 22.0 in April.

Dollar index gained about 0.4% to 97.88. The benchmark 10-year note yield rose to 2.23% and the short-term two-year note yield advanced to 1.266%.

European markets, except a marginally higher Italy, lost 0.3%-0.9%. UK retail sales jumped 2.3% in April, sending Sterling beyond $1.30 for the first time in nearly eight months.

AT HOME

Sensex and Nifty plunged 0.7% and 1% respectively, marking the worst fall since 5th May and 22 March respectively.  Sensex slipped 224 points to settle at 30435 while Nifty finished at 9429, down 96 points. BSE mid-cap and small-cap indices tumbled 2.2% and 2% respectively. Except a 1.2% and 0.6% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Realty and Metal indices leading the tally, down 3.1% and 2.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 361 cr, 141 cr and 1124 cr respectively. DIIs were net buyers to the tune of Rs 898 cr.

Rupee depreciated 69 paise to end at 64.84/$, marking the biggest single day fall since August 24, 2015.

Bajaj Auto posted 13.4% drop in March quarter net profit at Rs 862 cr. Revenue fell 7% to Rs 5212 cr. EBIDTA margin was maintained at 21.2%. Stand-alone volumes dipped by 10% to 787,627 units.

BoB posted a profit of Rs 155 cr for March quarter compared to a loss of Rs 3230 cr in the same quarter last year. NII rose 7.5% to Rs 3582 cr. Asset quality stabilised with gross NPA ratio fell to 10.46% from 11.4% q-o-q. Net NPA ratio fell to 4.7% from 5.43%. Fresh slippages stood at Rs 3561 cr.

GST Council fixing tax rates on of 1211 items, most of which will likely become cheaper as the new rates will be lower than the current effective levies. 14% of the 1211 items will attract a GST rate of 5%, another 17% will be taxed at 12%, 19% of the items will be taxed at 28%, while 7% will be on the exempt list.

HCC, Kajaria Ceramics, NALCO, RBL Bank and Ramco Cement will be included in derivative segment from 26th May.

OUTLOOK

Today morning, Asian markets are trading flat to modestly higher and SGX Nifty is suggesting a marginally higher start for our market.

Nifty yesterday touched a low of 9418 and closed at 9429, breaking the immediate support of 9430. A breach of 9418, the low made yesterday, would confirm a sell on the hourly chart and 20-DMA, placed around 9350, would be the next support to eye if that happens.

Traders are advised to cut long positions below 9418.

SBI will report its quarterly earnings today.

NIFTY ACHIEVES 9530 TARGET; 8430 IS THE IMMEDIATE SUPPORT

NIFTY ACHIEVES 9530 TARGET; 8430 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow and S & P 500 plunged 1.8% each while Nasdaq nosedived 2.6%, as U.S. political turmoil accelerated. For the Dow and S & P 500, this was the worst fall since September while Nasdaq had steepest fall since June 24.

Former FBI Director Robert Mueller was appointed by the Justice Department as a special counsel to take over the probe into Russia's interference in the 2016 election, including its role in the hacking of Hillary Clinton's emails.

That followed a report from The New York Times on Tuesday that former FBI Director James Comey put together a memo outlining a conversation in which President Donald Trump allegedly asked him to halt an investigation into Michael Flynn, the former national security adviser.

These controversies have raised further doubts as to Trump's ability to implement an aggressive stimulus program that includes tax cuts and big government spending.

US 10-year yield fell to about 2.21%. Dollar index hovered near its lowest level since November.

European markets fell between 0.2%-1.8%.

AT HOME

Benchmark indices ended with modest gains, extending the winning streak to third straight day. Sensex settled at 30659, up 76 points while Nifty added 13 points to finish at 9526. BSE mid-cap and small-cap indices however fell 0.02% and 0.2% respectively. BSE Metal index climbed 2.4%, becoming top gainer among sectoral indices, followed by 0.9% higher Telecom index. Consumer Durable and Oil & Gas indices were the top losers, down 0.8% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 731 cr, 8 cr and 21 cr respectively. DIIs were net buyers to the tune of Rs 615 cr.

Rupee depreciated 7 paise to end at 64.15/$.

The Union Cabinet yesterday approved a new coal linkage policy that seeks to lower power tariffs by allocating coal blocks through a reverse auction.

HUL reported better-than-expected results. Net profit rose 6% to Rs 1183 cr. Revenue rose 6.7% to Rs 8886 cr. EBIDTA was up 12.2% at Rs 1651 cr and margins improved 100 bps to 20.1%. Sales volume was up 4%.

OUTLOOK

Today morning, Nikkei is down 1.6%, other Asian markets are and SGX Nifty is suggesting about 70 points lower start for our market.

Nifty yesterday touched a high of 9533, achieving the 9530 target we were working with after 9450 hurdle was taken out. A gap down opening today would take it close to 9450 mark.

Immediate support on the hourly chart is placed around 9430, a breach of which will generate a sell on the hourly chart and 20-DMA, placed around 9330, would be the next support to eye in that case.

Bajaj Auto and BoB will report their quarterly earnings today.

NIFTY NEARLY ACHIEVES 9530 TARGET; TRAIL STOP-LOSS TO 9425

NIFTY NEARLY ACHIEVES 9530 TARGET; TRAIL STOP-LOSS TO 9425

WORLD MARKETS                             

Dow and S & P 500 ended marginally in the red while Nasdaq gained 0.3% yesterday, shrugging off news coming out of Washington.

After firing FBI Director James Comey last week, Trump was again in news as he defended his sharing of reportedly highly classified information with Russian officials via Tweeter. His tweets came after his national security adviser told the media that the incident reported by the Washington Post did not take place.

Additionally media reports suggested that Trump allegedly asked then-FBI Director James Comey, who Trump later fired, to stop investigating now-fired national security adviser Michael Flynn.

Housing starts totaled 1.172 million in April, well below the expected 1.26 million. Industrial production rose 1%, more than the expected increase of 0.4%.

Dollar index fell about 0.6% to 98.18, marking a 6-month low.

European markets ended mixed with FTSE, Italy and Spain in the green while DAX and CAC in the red. U.K. inflation rose to 2.7% in April, hitting its highest level since September 2013. Euro zone GDP was confirmed at 0.5% for the first three months of the year. The German ZEW survey showed economic sentiment had increased to 20.6 in May from 19.5 in April.

AT HOME

Sensex and Nifty soared 0.9% and 0.7% respectively to close at fresh record high. Sensex added 260 points to settle at 30583 while Nifty finished at 9512, up 67 points. BSE mid-cap and small-cap indices gained 0.3% and 0.4% respectively. Except a 0.6% lower Metal index, all the BSE sectoral indices closed higher with Telecom index leading the tally, up 2%, followed by 1.1% higher Teck, Auto and IT indices.

Rupee depreciated 3 paise to end at 64.08/$.

FIIs net bought stocks and stock futures worth Rs 858 cr and 144 cr respectively but net sold index futures worth Rs

PNB turned black in the fourth quarter, with profit at Rs 262 cr against loss of Rs 5367 cr y-o-y. NII rose 33% to Rs 3684 cr. Asset quality improved with gross NPA ratio at 12.53%, down from 13.7% q-o-q and net NPA ratio at 7.81%, down from 9.09% q-o-q. On absolute basis, gross NPA dropped 0.5 percent quarter-on-quarter to Rs 55,370.5 crore and net NPA slipped 6.5 percent to Rs 32,702 crore in the quarter gone by, but slippages rose 28% to Rs 6896 cr.

Tata Steel reported stellar set ouf number on standalone basis. Consolidated net loss for Q4 narrowed to Rs 1168 cr against a loss of Rs 3042 cr during the same period lat year. Revenue rose 30% to Rs 35305 cr. Standalone net profit more than doubled to Rs 1415 cr while revenue rose 46% to Rs 17113 cr. EBIDTA climbed 98% to Rs 4361 cr and margins came in at 27.9% against 20.8%.

OUTLOOK

Today morning, except a marginally higher Hang Seng, other Asian markets are trading with cuts of 0.2%-0.5% and SGX Nifty is suggesting a flattish start for our market.

Nifty yesterday touched a high of 9517, coming very close to the 9530 target we had give after the 9450 hurdle was taken out.

"Stay long with a trailing stop loss" continues to be the advise. Immediate support on the hourly chart has now moved up to 9425, which should serve as the fresh stop-loss for trading longs.

HUL will report its quarterly earnings today.

9530 ABOVE 9450; TRAIL STOP-LOSS TO 9370

9530 ABOVE 9450; TRAIL STOP-LOSS TO 9370

WORLD MARKETS                             

US indices gained 0.4%-0.5% with S & P 500 and Nasdaq closing at fresh record high on the back of rise in tech and oil prices.

WTI and Brent oil climbed nearly 2% each to $48.85 and $51.82 a barrel respectively after the Russian and Saudi energy ministers said the two countries agreed to extend a production cut until March 2018.

Large cap tech and cybersecurity stocks gained after a "ransomware" virus dubbed WannaCry hit 200,000 computers in more than 100 countries on Friday.

National Association of Home Builders survey showed sentiment among home builders came in at 70 for May, up from 58 in May of last year. The Empire State manufacturing index dropped to negative 1 in May from a print of 5.2 last month.

Dollar index fell to 98.879.

European markets gained 0.3%-0.6% on the back of a regional election win for German Chancellor Angela Merkel's party and extended oil output cuts.

AT HOME

Benchmark indices added half a percent to close at fresh record high. Sensex settled at 30322, up 134 points while Nifty gained 44 points to finish at 9445. BSE mid-cap and small-cap indices soared 1.2% and 0.8% respectively. BSE Metal and Basic Material indices were the top gainers among the sectoral indices, rising 2.4% and 1.6% respectively whereas Telecom and Teck indices were the top losers, down 0.9% and 0.5% respectively.

FIIs net bought stocks and stock futures worth Rs 235 cr and 191 cr respectively but net sold index futures worth Rs 117 cr. DIIs were net sellers to the tune of Rs 66 cr.

Rupee appreciated 26 paise to end at a fresh 21-month high of 64.05/$.

Vedanta's overall earnings beat street expectations. The company posted consolidated net profit of Rs 2988 cr as against loss of Rs 21103 cr (which included an exceptional loss of Rs 12312 cr). Revenue rose 40.5% to Rs 23691 cr. Operating profit more than doubled to Rs 7350 cr and margin expanded by 1060 bps to 32.7%.

India's exports and imports rose 19.8% and 49% respectively in April, leaving a trade deficit of $13.2 bn.

Oil marketing companies cut petrol and diesel prices by Rs 2.16 and Rs 2.10 per litre.

OUTLOOK

Today Nikkei is up above half a percent but other Asian markets are trading with cuts of 0.2%-0.6%. SGX Nifty is suggesting about 10 points higher start for our market.

In yesterday's report we had mentioned that 9451, the top made last week, is the immediate hurdle above which 9530 would be the next target to eye.

Nifty gained 44 points to close at 9445 and is set to open higher today. As mentioned above 9530 would be the next target upon a sustained crossover of 9450.

Immediate support on the hourly chart has moved up to 9370, with the stop-loss of which, trading longs should be held on to.

Tata Steel and PNB will report their quarterly earnings today.

STAY LONG WITH THE STOP-LOSS OF 9330; 9530 ABOVE 9450

STAY LONG WITH THE STOP-LOSS OF 9330; 9530 ABOVE 9450

WORLD MARKETS                             

Dow and S & P 500 fell 0.1% and 0.2% respectively while Nasdaq gained 0.1% on Friday after economic data proved to be a mixed bag, and on the back of the drop in retails stocks.

J.C. Penney plunged 14% after earnings topped expectations but same-stores sales fell more than expected.

Retail sales increased 0.4% in April from March, less than expected. Consumer prices rose 0.2% in April, in line with expectations. In the 12 months through April, the CPI increased 2.2%, down from March's 2.4% read.

Treasury yields fell on the back of the data. The benchmark 10-year note yield slipped to trade near 2.32%, while the two-year note yield hovered near 1.29%. Dollar index fell half a percent to 99.20.

Oil prices settled slightly higher.

European market gained 0.3%-0.7%. Provisional data from Germany showed the economy grew by 0.6% in the first-quarter.

For the week, Dow and S & P 500 fell 0.4% and 0.2% respectively, breaking 3-week winning streak. Nasdaq gained 0.2%. In Europe, while FTSE soared 1.2%, DAX ended flat while CAC lost 0.9%.

G7 finance ministers and central bankers highlighted the risks the Trump administration's trade policies could pose to global growth during their meeting in Italy. This follows an earlier meeting in March this year, when G20 leaders failed to endorse free trade in their joint communique.

Concerns over North Korea's nuclear program grew after the hermit state launched a new missile over the weekend.

AT HOME

Benchmark indices ended lower by a fifth of a percent on the last day of the week, breaking four-day winning streak. Sensex lost 63 points to settle at 30188 while Nifty finished at 9401, down 21 points. BSE mid-cap and small-cap indices fell 0.7% and 0.8% respectively. BSE Consumer Durable index was the top loser among sectoral indices, down 1%, followed by 0.9% cut in Finance index and Bankex. BSE IT and Realty indices were the top gainers, up 1.2% and 0.8% respectively.

FIIs net bought stocks worth Rs 842 cr but net sold index futures and stock futures worth Rs 916 cr and 191 cr respectively. DIIs were net sellers to the tune of Rs 711 cr.

Rupee appreciated 8 paise to end at 64.30/$.

Dr Reddy reported 175% rise in March quarter net profit at Rs 337.6 cr due to low base. Revenue fell 4.8% to Rs 3612 cr. Consolidated operating profit rose 31.3% to Rs 630 cr and margin expanded by 490 bps to 17.7%. All the parameters fell short of expectation.

European markets, except a marginally lower CAC, were trading with gains of upto 0.5%.

The government on Friday revised the base year for wholesale price index (WPI)-based inflation  and the Index of Industrial Production (IIP) to 2011-12 from 2004-05. As per the new series, April WPI inflation eased to four-month low of 3.85% from 5.29% in March. March IIP growth improved to 2.7% from 1.9% in February. The Consumer Price Index-based inflation in April stood at 2.99%, down from 3.81% in March and a record low. Core CPI fell to 4.5% from 4.9%.

OUTLOOK

Today morning, except a modestly lower Nikkei, other Asian markets are trading with gains of 0.3%-0.5% and SGX Nifty is suggesting about 35 points higher start for our market.

Readers would recall that we had given a target of 9470 after immediate target of 9350 was achieved. Nifty, after touching a high of 9451 on Thursday, slipped to end at 9401 on Friday, but is set to open higher today.

9450, the top made last week, is the immediate hurdle above which 9530 would be the next target to eye.

9330 continues to be immediate support, with the stop-loss of which trading longs should be held on to.

STAY LONG WITH THE STOP-LOSS OF 9330

STAY LONG WITH THE STOP-LOSS OF 9330

WORLD MARKETS                             

US indices fell 0.1%-0.2% with retail stocks taking a plunge on the back of Macy's weak quarterly results.

Producer price index rose 0.5% in April, more than the expected increase of 0.2%. Initial jobless claims totaled 236,000, below the expected 245,000.

Dollar index, after touching a high of 99.88, gave away all the gains to end at 99.65.

WTI and Brent oil gained a percent to settle at $47.83 and $50.72 a barrel respectively.

European markets, except a flat FTSE, fell 0.3%-0.4%. Basic resources however bucked the trend, buoyed by rising oil prices and major gains for mining giants Fresnillo and Polymetal. The Bank of England left interest rates unchanged at 0.25% but lowered its growth projections for the United Kingdom. Sterling fell shortly after the decision as some investors had expected more than one vote for a rate rise. Meanwhile, UK industrial production shrank 0.5% in March.

AT HOME

After opening higher by half a percent, benchmark indices gave away most of the gains through the session to end just marginally higher. Sensex settled at 30250, up 3 points while Nifty added 15 points to finish at 9422. BSE mid-cap index ended 0.05% higher while small-cap index lost 0.05%. BSE Consumer Durable and Consumer Discretionary Goods & Services indices gained 1.6% and 1.2% respectively, becoming top gainers among the sectoral indices while Power and Utilities indices were the top losers, down 1.2% and 1% respectively.

FIIs net bought stocks and stock futures worth Rs 1307 cr and 434 cr respectively but net sold index futures worth Rs 155 cr. DIIs were net sellers to the tune of Rs 1037 cr.

Rupee appreciated 25 paise to end at 64.37/$.

HCL Technologies reported better than expected results in terms of revenue, EBIT as well as dollar revenue for the quarter ended March 31. Dollar revenue rose 4.1% q-o-q to $1817 mn while constant currency growth stood at 3.8%. Rupee revenue grew 2% to Rs 12053 cr and net profit was up 20.8% at Rs 2325 cr. For FY18, the company guided for a revenue growth of 10.5-12.5% in constant currency terms while EBIT margin guidance stood at 19.5-20.5%.

Asian Paints reported 7.8% y-o-y growth in topline at Rs 3852 cr. EBIDTA rose 2.2% to Rs 712 cr and margin contracted by 100 bps to 18%. Net Profit rose 10.3% to Rs 480 cr. Volume growth at 10% was better-than-expected.

OUTLOOK

Today morning, Asian markets, except a marginally higher Hang Seng, are trading with modest cuts and SGX Nifty is suggesting a flattish start for our market.

We had given a target of 9470 after Nifty broke out of 9370-9270 consolidation. The benchmark yesterday touched a high of 8451, moving very close to the 9470 target, but slipped from there to end at 9422.

9470-9500 continues to be the next target area to eye. Immediate support on the hourly chart has moved up to 9330, with the stop-loss of which trading longs should be held on to.

Dr Reddy, Titan and Nestle will report their quarterly earnings today.

The government today will release the new Index of Industrial Production (IIP) and Wholesale Price Index (WPI) series with 2011-12 base year replacing the 2004-05 base years. IIP for March is expected to show a growth of 1.5%, up from a decline of 1.2% in February. April CPI is expected at 3.49%, down from 3.81% in March. April WPI is expected to ease to 4.79% from 5.70%.

NIFTY BREAKS OUT OF 8-DAY CONSOLIDATION; 9470 NEXT

NIFTY BREAKS OUT OF 8-DAY CONSOLIDATION; 9470 NEXT

WORLD MARKETS                             

While Dow fell 0.2%, S & P 500 and Nasdaq gained 0.1% each with S & P 500 and Nasdaq posting a record close and Nasdaq posting a 5-day winning streak after digesting Trump's firing of FBI Director James Comey.

The White House claimed the sudden termination of Comey's contract was over his handling of Hilary Clinton's emails. However, Democrats said the decision was most likely as a result of the FBI investigating alleged links between the Trump campaign and Russia.

In economic news, mortgage applications rose 2.4% on a seasonally adjusted basis last week. Import prices rose 0.5%, more than expected.

Oil bounced back more than 3% with WTI and Brent at $47.33 and $50.54 respectively after U.S. inventories fell 5.25 mn barrels, their largest one-week drop this year.

Dollar index extend the upmove, rising about 0.1% to 99.63.

European markets gained upto 0.6% with FTSE on top.

AT HOME

Benchmark indices soared a percent in today's trade to close at fresh record high. Sensex added 315 points to settle at 30248 while Nifty finished at 9407, up 90 points. BSE mid-cap and small-cap indices gained 0.9% and 0.8% respectively.  Except a 0.4% and 0.2% lower IT and Realty indices respectively, all the BSE sectoral indices ended in green with Telecom index leading the tally, up 4.6%, followed by 1.8% rise in FMCG index.

FIIs net bought stocks and stock futures worth Rs 893 cr and 383 cr respectively but net sold index futures worth Rs 395 cr. DIIs were net sellers to the tune of Rs 230 cr.

Currency market was shut on account of "Buddha Purnima".

Hero MotoCorp reported 13.9% y-o-y dip in quarterly net profit at Rs 718 cr. Total income fell 7% to Rs 7488 cr. EBIDTA fell 19.5% to Rs 957.6 cr and margin was 13.9%, down from 15.8%.

OUTLOOK

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

At the risk of repeating, while Nifty was in a consolidation mode for eight consecutive sessions, we had maintained our positive bias and had said that once 9370 hurdle is taken out, 9470 would be the next upside target.

Nifty finally broke out of this long consolidation yesterday, touched a high of 9415 and closed at 9407.

9470 continues to be immediate upside target. Immediate support on the hourly chart has now moved up to 9330, with the stop-loss of which long positions should be held on to.

HCL Tech and Asian Paints will report their quarterly earnings today. HCL Tech is expected to show a dollar revenue growth of 4% but around 40 bps dip in margin. Markets would watch out for FY18 guidance. In case of Asian Paint, key parameter, volume growth, is expected between 7-8%.