9300 IS THE IMPORTANT SUPPORT; 9450 IMMEDIATE HURDLE

9300 IS THE IMPORTANT SUPPORT; 9450 IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained 0.2%-0.4% after minutes of the U.S. Federal Reserve May meeting indicated an unwinding of its balance sheet likely towards year-end. S & P 500 posted a record close and both Dow and S & P 500 closed above their May 16 closing levels, wiping out losses from the biggest sell-off of the year.

Minutes indicated that the Fed could use a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting. The central bank's balance sheet is currently worth $4.5 trillion.

While the Fed signaled that interest rates could be raised soon, FOMC members also indicated in the minutes that "it would be prudent" to wait for more evidence that reflected the softer economic data out of the U.S. recently was transitory.

Treasury yield fell after the minutes' release, with the 10-year yield at 2.257% and two-year yield at 1.281%. Dollar index fell about 0.25% to 97.10.

Total mortgage application volume increased 4.4% last week on a seasonally adjusted basis from the previous week thanks largely to refinancings. Existing home sales slipped 2.3% in April, more than expected.

WTI oil gained 0.3% to $51.53 and Brent added 0.4% to $54.16 ahead of highly-anticipated OPEC meeting in Vienna where major oil producers are expected to extend, and potentially deepen, output cuts in a bid to rebalance bloated oil markets.

European markets, except a 0.4% higher FTSE, fell 0.1%-0.2%.

AT HOME

Repeating pattern of past couple of days, benchmark indices, after gaining about half a percent in morning session, plunged sharply in noon to end lower by about a fourth of a percent. Sensex lost 64 points to settle at 30302 while Nifty finished at 9361, down 26 points. Broader market continued to bleed with BSE mid-cap and small-cap indices down 1.4% each. Except a 0.5% and 0.1% higher Oil & Gas and Auto indices respectively, all the BSE sectoral indices ended in red with Capital Goods and Telecom indices leading the fall, down 2.6% and 2.3% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 82 cr, 231 cr and 1287 cr respectively. DIIs were net buyers to the tune of Rs 197 cr.

Rupee appreciated 16 paise to end at 64.73/$.

Lupin posted 49.2% dip in March quarter at Rs 380 cr on account of drop in US sales and a one-time provisioning of Rs 156 cr on account of patent litigation over generic oral contraceptive drug in Australia. Revenue rose 1.3% to Rs 4253 cr. EBIDTA margin stood at 19.9%, below expectation of 24-27%.

Union Cabinet today cleared seven decisions including abolition of 25-year old Foreign Investment Promotion Board (FIPB) and Strategic Partnership for defence manufacturing. Other decisions include-Approval to Make in India preference in government procurements, hike in sugarcane fair price by Rs 25 per quintal to Rs 255 per quintal for 2017-18, approving 29.7-km long Noida-Greater Noida Metro rail corridor, which will be build at a cost of Rs 5,503 crore, approving Amendment to Central Road Fund Act, 2000, which states that 2.5% of the fund will go for the development and maintenance of National Waterways and finally AIIMS in the Assam at a cost of Rs 1,123 crore.

OUTLOOK

Today morning, except a marginally lower Shanghai, 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 after Nifty broke the immediate support of 9430, we have been working with downside target of 20-DMA and 34-DMA. Nifty tested 20-DMA placed around 9380 on Tuesday and went ahead to touch a low of 9341 yesterday, moving towards 34-DMA target.

34-DMA, placed around 9300, continues to be important short term support to eye. On the way up, a trendline adjoining recent tops on the hourly chart presents a resistance around 9450 above which 9530, the top made last week, would be the bigger hurdle to eye.

Ashok Leyland, Britannia, IOC and Cipla will report their quarterly earnings today.

9300-9530 IS THE BROAD RANGE

9300-9530 IS THE BROAD RANGE

WORLD MARKETS                             

US indices gained 0.1%-0.2%, extending the winning streak to fourth straight day on renewed hope around Trump.

Trump met Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu. He will be in Europe for the rest of his trip.

New home sales fell more than expected 11.4% in April to a seasonally adjusted annual rate of 569,000.

Dollar index gained about a third of a percent to 97.34.

WTI crude rose 34 cents to $51.47/barrel, a five-week high. Brent added 32 cents to $54.19.

European markets, except 0.2% lower FTSE, gained 0.3%-0.5%. May flash composite PMI for Eurozone stood at 56.8, matching the six-year high registered in the previous month. French private sector rose to a six-year high in May supported by the election of President Emmanuel Macron.

AT HOME

Benchmark indices ended lower by about six tenth of a percent after a choppy trade. Sensex slipped 206 points to settle at 30365 while Nifty finished at 9386, down 52 points. BSE mid-cap and small-cap indices tumbled 1.6% and 1.9% respectively. Except a 0.4% higher Auto index, all the BSE sectoral indices ended in red with Healthcare and Realty indices leading the tally, down 2.7% and 2.6% respectively.

FIIs net sold stocks worth Rs 401 cr but net bought index futures and stock futures worth Rs 510 cr and 463 cr respectively. DIIS were net buyers to the tune of Rs 353 cr.

Rupee depreciated 34 pise to end at 64.89/$.

Indian army said it has carried out punitive fire assaults on Pakistani posts near Jammu and Kashmir's Nowshera sector to check infiltration.

Tata Motors posted better-than-expected consolidated net profit for the March quarter at Rs 4296 cr as against profit of Rs 5176 cr during the same period last year. Revenue rose 2.9% to Rs 77272 cr. EBIDTA fell to Rs 5166 cr from Rs 5888 cr. JLR's margin rose to a healthy 14.5%, while its net profit and EBITDA at £557 million and £1,057 million came in marginally higher than estimates.

OUTLOOK

Today morning, Nikkei is up about half a percent but Hang Seng and Shanghai are down 0.4% and 1% respectively. SGX Nifty is suggesting a marginally higher start for our market.

As you would recall, we have been saying that 9530 is the immediate hurdle, a crossover of which is required for a fresh upmove. We had also said that 9390, which is last week's low and also coincides with the 34-DMA, is the immediate support below which 34-DMA, placed around 9300 would be the next downside target to eye.

Nifty, after touching a high of 9448 in the opening trade, slipped to 9370 and finally settled at 9386, barely holding on to the 20-DMA, which was at 9380 yesterday.

9300, as mentioned above, continues to be next important support to eye. 9500-9530 is the immediate resistance area.

Lupin, Adani Ports and Bharat Forge will report their quarterly earnings today.

9530-9390 IS THE IMMEDIATE RANGE

9530-9390 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

US indices gained 0.4%-0.8% as Trump continued his first trip abroad since taking office. Defence related stocks popped after Trump signed a multi-billion dollar arms deal during his visit to Saudi Arabia.

After Saudi, Trump arrived for his two-day visit to Israel, which will include separate meetings with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas.

US crude settled 40 cents higher at $50.73/barrel on hopes that leading exporters would agree to extend the output cut - as OPEC members gear up for a meeting in Vienna this Thursday.

U.S. Treasurys slipped, with the benchmark 10-year note yield rising to 2.25% and the two-year yield climbing to 1.275%. Dollar index fell marginally to 96.99. Euro hit its highest level since Nov. 9.

European markets closed mixed with 0.3% higher FTSE, flat CAC and 0.2% lower DAX. Italy tumbled 1.2%.

Nineteen people were reported dead following a blast at the Manchester Arena in northern England where U.S. singer Ariana Grande had been performing. The U.K. police are treating the blast as a terrorism incident.

AT HOME

After rising about three fourth of a percent in the initial trade, benchmark indices gave away most of the gains through the session to end just modestly higher. Sensex settled at 30571, up 106 points while Nifty added 10 points to finish at 9438. BSE mid-cap and small-cap indices plunged 1.2% and 1.1% respectively. BSE FMCG index soared 3.1%, becoming top gainer among the sectoral indices, followed by 0.6% rise in Consumer Durable index. Healthcare and Basic Material indices were the top losers, down 1.6% and 1.4% respectively.

FIIs net sold stocks and index futures worth Rs 321 cr and 79 cr respectively but net bought stock futures worth Rs 152 cr. DIIs were net buyers to the tune of Rs 1263 cr.

Rupee appreciated 9 paise to end at 64.55/$.

The Reserve Bank of India (RBI) yesterday outlined a broad plan of action to resolve stressed assets at banks in the wake of the additional powers given to it for the purpose through the amendment of the Banking Regulation Act this month. These include expanding the scope of oversight committees and a larger role for credit rating agencies.

GAIL reported 69% drop in March quarter net profit at Rs 260 cr on the back of Rs 783 cr impairment of investment in Ratnagiri power plant. EBIDTA rose 27% to Rs 1525 cr and margin stood at 11.4%.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher start for our market.

In Yesterday's report we had reiterated the view that 9530, the top made last week, is the immediate hurdle, a crossover of which is required for a fresh upmove.

Nifty, after touching a high of 9499, retreated to end at 9438, reinforcing this view.

Only after 9530 is taken out, next target of 9675 will be on the horizon. 9390, the bottom made last week, now rougly coincides with the 20-DMA and is the immediate support to eye. If this level is breached, 34-DMA, placed around 9300, would be the next important support to eye.

Tata Motors and JSPL will report their quarterly earnings today.

9530 IS THE IMMEDIATE HURDLE; 9360 IMMEDIATE SUPPORT

9530 IS THE IMMEDIATE HURDLE; 9360 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.5%-0.7% on Friday on hopes that concerns around Donald Trump's presidency may have been exaggerated.

U.S. Treasuries fell, with the benchmark 10-year note yield advancing to 2.233% and the two-year note yield near 1.27%. The U.S. dollar index fell about 0.7% to 97.12.

European markets gained 0.4%-1.4%. The Greek parliament passed new austerity measures on Friday aimed at unlocking debt relief from Athens' creditors.

For the week, US indices fell 0.5%-0.6%. In Europe, FTSE gained 1.1% but DAX and CAC fell 0.6% and 1.1% respectively. In Asian, Shanghai and Hang Seng gained 1% and 0.2% respectively but Nikkei plunged 1.9%.

U.S. President Donald Trump's first foreign trip began in Saudi Arabia during the weekend and an arms deal worth $350 billion was inked on Saturday between the two countries.

North Korea test-fired an intermediate-range ballistic missile yesterday.

AT HOME

After gaining about eight tenth of a percent in first hour or so, benchmark indices gave away all the gains later to end little changed. Sensex settled at 30465, up 30 points while Nifty lost 2 points to finish at 9428. BSE mid-cap and small-cap indices tumbled 0.7% and 0.9% respectively. BSE FMCG index soared 1.9%, becoming top gainer among the sectoral indices, followed by 0.4% rise in Bankex. Consumer Durable and Consumer Discretionary Goods & Services indices were the top losers, down 1% and 0.9% respectively.

FIIs net sold stocks worth Rs 989 cr but net bought index futures and stock futures worth Rs 333 cr and 671 cr respectively. DIIs were net buyers to the tune of Rs 349 cr.

Rupee appreciated 21 paise to end at 64.64/$.

For the week, Sensex and Nifty gained 0.9% and 0.3% respectively, extending the winning streak to second consecutive week.

SBI reported 122% y-o-y rise in net profit for March quarter at Rs 2814 cr. NII surged 17.3% to Rs 18071 cr. Asset quality improved with Gross NPA ratio falling to 6.9% from 7.23% q-o-q and Net NPA ratio falling to 3.7% from 4.2%.

OUTLOOK

Japan trade data showed April exports rose 7.5% on year, below expectations of 7.8%. Imports, however, rose 15.1%, above the forecast of 14.8%.

Today morning, except a modestly lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 20 points higher start for our market.

On Friday, we had said that having breached immediate support of 9430, next support for Nifty would come at 20-DMA, which was placed around 9350.

The benchmark, after touching a low of 9390, reversed to end at 9428 and is set to open higher today.

9530, the top made last week, continues to be immediate hurdle,a crossover of which is required for a fresh upmove. If that happens, 9675 would be the next target to eye.

20-DMA has now moved up to 9360 and would be the immediate support to eye. If that is taken out, 34-DMA, placed around 9300, would be the next important support to eye.

GAIL will report its quarterly earnings today.

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.