US EQUITIES PLUNGE ON GLOBAL GROWTH CONCERNS; NIFTY GENERATES SELL ON HOURLY CHART

US EQUITIES PLUNGE ON GLOBAL GROWTH CONCERNS; NIFTY GENERATES SELL ON HOURLY CHART

WORLD MARKETS                             

US indices plunged in the vicinity of a percent on Friday as signs of slower global growth weighed on sentiment.

The U.S. flash manufacturing PMI for July edged up to 53.8, from a 20-month low hit in June. New home sales showed a decline of 6.8 percent to a seven-month low in June.

Copper and the Thomson Reuters Core Commodity CRB index fell to 6-year lows. In China, the Caixin Markit flash general manufacturing PMI for July came in at 48.2, a 15-month low. The July euro zone flash PMI was 52.2, a two-month low. Gold futures ended down $8.60 at $1,085.50 an ounce, posting five consecutive weeks of losses for the first time since October. Nymex oil fell 31 cents to $48.14 a barrel, the lowest level since March 31.

Chevron and Exxon Mobil hit multi-year lows with the continued decline in oil. DuPont closed 2.6% lower as materials had their worst week since December.

Earlier Shanghai Composite end lower by 1.3%, breaking a six-session winning streak.

European markets fell 0.5%-1.4%.

For the week, US indices tumbled 2.2%-2.9% with the

Dow posting its worst week since January while S&P 500 and Nasdaq posted their worst since March.  European markets fell 1%-3% with FTSE and DAX leading the tally.

AT HOME

After trading in a narrow range in the first half, benchmark Sensex and Nifty tumbled in the second half to end lower by 0.9% and 0.8% respectively on Friday, extending the losing streak to second consecutive day. Sensex settled at 28112, down 259 points while Nifty lost 68 points to finish at 8522.  BSE mid-cap and small-cap indices lost 0.6% each. Except a 0.1% each rise in BSE FMCG and Consumer Durable indices respectively, all the sectoral indices ended in red with Capital Goods and Realty indices leading the tally, down 1.6% and 1.3% respectively.

FIIs net bought stocks worth Rs 7 cr but net sold index futures and stock futures worth Rs 36 cr and 322 cr respectively. DIIs were net buyers to the tune of Rs 196 cr.

Rupee plunged 27 paise to end at 64.03/$.

For the week, Sensex and Nifty lost 1.2% and 1% respectively.

Axis Bank reported better-than-estimated 18.7% rise in April-June quarter net profit at Rs 1978 cr. NII surged 22.5% to Rs 4057 cr. Gross NPA ratio rose to 1.38% from 1.34% while Net NPAs rose to 0.48% from 0.44%.

Reliance Industries’ first quarter standalone net profit rose by 1.2% q-o-q to Rs 6318 cr. Total income rose 17.4% to Rs 65817 cr. Gross Refining Margin at USD 10.4 a barrel was the highest in 6 years. Operating margin stood at 14.1% against 15.4%.

A Supreme Court-appointed special investigation team (SIT) on unaccounted money has come down heavily on the creation of such funds through stock exchanges and participatory notes (P-notes). In a report, the SIT said the SEBI should have an effective monitoring mechanism to study unusual rises in stock prices and the use of stock exchanges to evade taxes through long-term capital gains. Sebi has also been asked to put in place a mechanism to monitor the beneficial owners of P-notes.

A panel headed by law commission chairman AP Shah to examine the vexed issue of minimum alternate tax (MAT) on foreign portfolio investors submitted its report to the government on Friday. Revenue Secretary Shaktikanta Das said the report would not be made public for now.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 35 points lower opening for our market.

For whole of last week, we had been mentioning that 8670, the 61.8% retracement level of the 9119-7940 fall, is an important hurdle, a crossover of which is required for the further upmove. And therefore we had advised booking profits in trading long closer to 8670 and wait for the crossover of same for initiating fresh longs.

The benchmark went closer to 8670 hurdle couple of times but could not cross it and ended the week at 8521. Moreover, the benchmark generated a sell on the hourly chart on Friday. Immediate support on the way down is placed around 8470, where a trendline adjoining recent bottoms on the daily chart is placed.  Below that 8415, the 34-DMA would be the next support to eye.

Traders are advised to hold on to trading shorts with the stop loss of 8590, which is the immediate hurdle on the hourly chart.

Tech Mahindra and Ambuja Cements will report their quarterly earnings today.

8670 CONTINUES TO BE IMMEDIATE HURDLE; RIL, AXIS BANK EARNINGS IN FOCUS

8670 CONTINUES TO BE IMMEDIATE HURDLE; RIL, AXIS BANK EARNINGS IN FOCUS

WORLD MARKETS                             

US indices fell in the vicinity of six tenth of a percent, weighed down by lackluster earnings.

Caterpillar fell 3.6% after revenues missed estimates and the firm also cut its revenue forecast for the year. 3M and American Express lost 3.8% and 2.5% after revenue missed expectations. General Motors closed up about 4% after posting record North American profit and forecast that the second half of the year will be stronger than the first.

In economic news, weekly jobless claims came in at 255,000, their lowest level since 1973. The June leading economic indicator index came in at 123.6, a gain of 0.6%.

Nymex oil fell 74 cents or 1.5% at $48.45 a barrel, its lowest finish since March 31. Brent fell 90 cents to $55.25 a barrel.

European markets, except a marginally higher Italy, saw modest cuts after a mixed bag of earnings from some of Europe's largest companies.

AT HOME

Benchmark indices ended lower by half a percent after a choppy trading session. Sensex lost 134 points to settle at 28371 while Nifty finished at 8590, down 44 points. BSE mid-cap index lost 0.2% while the small-cap index gained 0.5%. BSE Consumer Durable index soared 1.6%, becoming top gainer among the sectoral indices, followed by 0.5% rise in Auto index. Teck index and Bankex were the top losers, giving away 0.8% and 0.7% respectively.

FIIs net bought stocks worth Rs 185 cr but net sold index futures and stock futures worth Rs 584 cr and 358 cr respectively. DIIs were net sellers to the tune of Rs 276 cr.

Rupee depreciated 18 paise to end at 3-week low of 63.76/$.

Parliament could not transact any business for the third day in a row as deadlock prevailed between the Opposition and the ruling side over the Lalit Modi and Vyapam issues.

Bajaj Auto plunged 5.2% after topline and EBIDTA missed forecast. Net profit rose 37.2% y-o-y to Rs 1015 cr while revenues rose 6.9% to Rs 5614 cr. Operating margin expanded by 270 bps to 20.3%.

Lupin tumbled 5.2% after quarterly profit dipped 16% y-o-y to Rs 525 cr. Revenues slipped 5.7% to Rs 3150 cr. Operating profit margin declined 750 bps to 25.9%.

Wipro reported slightly higher-than-estimated 1.1% sequential growth in first quarter dollar revenue at USD 1.79 bn. Consolidated profit declined 3.7% q-o-q to Rs 2188 cr. and revenue grew 3% to Rs 11577 cr. The company expects its IT services dollar revenue to be in range of USD 1.82-1.85 bn in July-September quarter, a growth of 1.5-3.5% q-o-q.

OUTLOOK

Today morning Asian markets are trading with cuts in the vicinity of half a percent and SGX Nifty is suggesting about 20 points lower opening for our market.

In yesterday's report we had mentioned that after Wednesday's mammoth rebound, Nifty was again close to 8670 hurdle, and had advised waiting for the crossover of this level before taking fresh longs.

The benchmark, after touching a high of 8655 in the initial trade, slipped to end at 8590.

8670, the 61.8% retracement level of the entire 9119-7940 fall, continues to be important hurdle, a crossover of which required for fresh upmove. If that happens, next target to eye on the way up would be 8845, the top made in April.

On the way down, 8499, the bottom made this week, is the immediate support to eye.

Reliance Industries and Axis Bank will report their quarterly earnings today.

OIL, GOLD WITNESS FRESH SELLING; NIFTY CLOSE TO 8670 HURDLE AFTER A MAMMOTH REBOUND

OIL, GOLD WITNESS FRESH SELLING; NIFTY CLOSE TO 8670 HURDLE AFTER A MAMMOTH REBOUND

WORLD MARKETS

US indices lost 0.25%-0.7% yesterday, weighed down by disappointing tech earnings.

Apple fell 4.3% after the firm's fourth-quarter revenue forecast fell short of expectations and it missed some targets for iPhone sales. Microsoft fell 3.7% after posting a $3.2 billion net loss for its fiscal fourth quarter ending June 30 following restructuring charges. On the other hand Boeing and Coca-Cola reported better-than-estimated earnings.

Commodities remained in focus. Nymex oil tumbled $1.67 to $49.15 a barrel after the US energy department said oil inventories rose by about 2.5 million barrels. Gold fell $12 to $1092 an ounce, extending its losing streak to 10 session and closing at the lowest level since March 25 2010.

In economic news, U.S. home prices rose 0.4% in May from April, up from 5.7% a year ago. Existing home sales rose 3.2% from the previous month in June, their highest levels in over eight years.

European markets, except a 0.2% higher Spain, fall upto 1.5%, with FTSE leading the tally.

                                                             

AT HOME

After falling nearly a third of a percent in the opening trade, benchmark indices saw a sustained upward move through the session to end with hefty gains of more than a percent to close at fresh three-month high. Sensex soared 311 points to settle at 28493 while Nifty finished at 8633, up 104 points. BSE mid-cap and small-cap indices gained 1.3% and 0.9% respectively. Except a 0.5% and 0.4% cut in BSE IT and Teck indices respectively, all the sectoral indices closed in green with Oil & Gas index and Bankex leading the tally, climbing 2.4% and 1.4% respectively

FIIs net bought stocks worth Rs 450 cr but net sold index futures and stock futures worth Rs 295 cr and 263 cr respectively. DIIs were net sellers to the tune of Rs 352 cr.

Rupee depreciated 3 paise to end at 63.575/$.

Yesterday, both Lok Sabha and Rajya Saba were adjourned for the day after repeated disruption by the opposition on "Lalitgate" and "vyapam" issue.

The GST bill yesterday won majority support of the Rajya Sabha Select Committee, which endorsed almost all the provisions while also agreeing to demands of parties like TMC for a five-year compensation to states.

The report, however, is marked by dissent notes from Congress, AIADMK and Left parties, which have expressed their opposition to the GST Constitution Amendment Bill in the existing form. The bill, which has already been approved by Lok Sabha, will now have to be taken up for passage in the Upper House. As it is a Constitution Amendment Bill, the bill has to be approved by two-third members in the Rajya Sabha. The ruling BJP government does not have a majority in Rajya Sabha and will have to depend upon support of regional parties and allies for passage of the bill.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 10 points lower opening for our market.

Yesterday, after touching a low of 8499 in the initial trade, Nifty rebounded sharply to end at 8633. After yesterday's mammoth move, the benchmark is again close to 8670, the 61.8% retracement level of the whole 9119-7940 fall, which we had mentioned as the first target when 8490 was taken out.

Upon crossover of 8670, 8845, the top made in April, would be the next target to eye. 8490, the erstwhile top on the weekly chart which roughly coincides with yesterday's low, is the immediate support.

Traders are advised to wait for the crossover of 8670 before taking fresh longs.

Wipro, Bajaj Auto, UPL and Lupin will report their quarterly earnings today.

NIFTY BEACHES IMMEDIATE SUPPORT; 8400 NEXT SUPPORT, 8600 IMMEDIATE HURDLE

NIFTY BEACHES IMMEDIATE SUPPORT; 8400 NEXT SUPPORT, 8600 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow plunged 1% while S & P 500 and Nasdaq lost 0.4% and 0.2% yesterday on the back of lackluster earnings from a few blue chips.

IBM plunged 6% after earnings per share and revenue fell 13% y-o-y. United Technologies tumbled 7% after the industrial conglomerate cut its full-year forecast. Verizon fell 2.35% as revenue came in below estimates. Apple ended 1% lower ahead of the earnings.

European markets fell 0.3%-1.3% with Italy leading the tally. Greece's stock exchange remained closed, while the local banks reopened on Monday for the first time in three weeks.

Dollar index fell nearly a percent. Nymex oil settled down 2 cents at $50.89 a barrel. Gold lost $3.3 to $1103.50 an ounce.

AT HOME

Benchmark indices plunged nine tenth of a percent yesterday, registering the steepest fall after 8th July. Sensex plunged 238 points to settle at 28182 while Nifty finished at 8529, down 74 points. BSE mid-cap and small-cap indices tumbled 1.4% and 1.6% respectively. Except a 4.6% and 3.8% rise in BSE IT and Teck indices respectively, all the sectoral indices ended in red with Healthcare index leading the tally, nose-diving 5.9%, followed by 2.2% cut in Realty index.

FIIs net sold stocks and stock futures worth Rs 227 cr and 13 cr respectively but net bought index futures worth Rs 1256 cr. DIIs were net buyers to the tune of Rs 146 cr.

Rupee appreciated 12 paise to end at 63.54/$.

Sun Pharma plunged after the company said that the consolidated revenues for FY16 would remain flat or show a decline over FY15 and that consolidated profits may also be adversely impacted due to certain expenses/charges arising out of Ranbaxy integration as well as remedial actions."

Infosys surged after reporting better-than-expected 4.5% q-o-q growth in dollar revenue at USD 2256 mn for the April-June quarter. The company also upped its FY16 dollar revenue guidance by 100 bps to 7.2-9.2%.  In rupee terms, revenue rose 7% to Rs 14354 cr while profit fell 2.2% to Rs 3030 cr. Volume growth stood at 5.4%, the highest in last 19 quarter.

HUL reported lower-than-expected 0.2% y-o-y growth in net profit at Rs 1059 cr. Total income from operations grew by 5% to Rs 8105 cr. Volume growth stood at 6%. Operating margin expanded by 150 bps to 18.6%, beating the estimated 17.9% figure.

HDFC Bank reported in-line-with-estimates 20.7% rise in net profit at Rs 2696 cr. NII rose 23.5% to Rs 6389 cr. Net interest margin stood at 4.3%. Gross NPAs rose 2 bps sequentially to 0.95%. Net NPAs rose to 0.35% from 0.25%.

Asian Paints reported better-than-expected 34.4% jump in net profit at Rs 455 cr while revenue grew by 7.8% to Rs 3623 cr. Operating margin expanded by 210 bps to 18.8%.

Idea Cellular posted 1% q-o-q dip in net profit at Rs 931 cr which was better-than-estimates. Revenues rose 4.5% to Rs 8798 cr. EBIDTA margin improved 30 bps to 36.7%. Average revenue per user improved marginally to Rs 182 from 181.

The monsoon session of Parliament got off to a chaotic start yesterday as the Rajya Sabha witnessed multiple adjournments with the opposition demanding the resignations of External Affairs Minister Sushma Swaraj and chief ministers Vasundhara Raje and Shivraj Singh Chouhan over the controversies surrounding them.

The Lok Sabha paid tributes to a sitting member and 13 former MPs who died in the recent past on the first day of the Monsoon session today, following which the House was adjourned without transacting any business.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

Yesterday, Nifty, after touching a fresh recent high of 8647 in the morning trade, plunged sharply to end at 8529. In the process, it broke the immediate support on hourly chart, which had moved up to 8550 in yesterday's trade.

Next support on the way down is 8400 where a trendline adjoining recent bottoms on the daily chart as well as 200 DMA are placed. Immediate resistance on the hourly chart is placed at 8600, with the stop loss of which trading shorts can be initiated for the target of about 8400.