INFY, IIP AND CPI IN FOCUS; STAY LONG WITH THE STOP LOSS OF 8110

INFY, IIP AND CPI IN FOCUS; STAY LONG WITH THE STOP LOSS OF 8110

WORLD MARKETS                             

US indices gained upto 0.4% on Friday, digesting dovish signals from the U.S. Federal Reserve minutes.

The September Fed meeting minutes released Thursday afternoon indicated policymakers were concerned about reaching their inflation target of 2% and the impact of the global economic slowdown. The minutes said policymakers don't expect to reach their inflation goal before the end of 2018.

On the data front, import prices fell 0.1% in September, less than the expected 0.5% drop. However, export prices fell 0.7%, more than the 0.2% forecast.

Nymex oil rose 20 cents to $49.63 a barrel, up more than 8% for the week. The U.S. oil rig count dropped for the sixth straight week, down 9. Gold rose $12 to $1156 an ounce.

Earlier Nikkei finished 1.6% higher and Shanghai gained 1.3%.

European markets gained between 0.5%-1%. Glencore closed up 7% after it cut about a third of its annual zinc output due to low prices

For the week, S & P 500 climbed 3.3%, its best since the week ended Dec 19, 2014. Dow gained 3.7%, its second-best week of the year so far. Nasdaq rose 2.6%. European markets soared 4.7%-7.4%.

AT HOME

Benchmark indices ended higher by nearly eight tenth of a percent after a choppy trade on last day of the week. Sensex settled at 27080, up 234 points while Nifty rose 60 points to finish at 8190. BSE mid-cap index lost 0.1% while the small-cap index gained 0.2%. BSE IT and Teck indices gained 1.5% and 1.3% respectively, becoming top gainers among the sectoral indices while Consumer Durable and Power indices lost 0.2% and 0.1% respectively.

FIIs net bought stocks and index futures worth Rs 484 cr and 437 cr respectively but net sold stock futures worth Rs 534 cr. DIIs were net sellers to the tune of Rs 369 cr.

Rupee appreciated 31 paise to end at 64.735/$.

For the week, Sensex and Nifty gained 3.3% and 3% respectively, extending rising streak to second week.

Indusind Bank reported better-than-expected 30.2% y-o-y rise in September quarter net profit at Rs 560 cr. NII rose 31.3% to Rs 1094 cr. Gross NPA ratio improved to 0.77% from 0.79% q-o-q while net NPA ratio remained unchanged at 0.31%. Provisions against bad loans increased 28% q-o-q to Rs 158 cr.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5-1.5% and SGX Nifty is suggesting about 30 points higher opening for our market.

Ever since Nifty established higher-top higher-bottom formation on the daily chart by crossing 8055 top on 5th October, we had been working with an initial target of 8220, followed by 8380.

The benchmark on Friday touched a high of 8232 before closing at 8190, achieving the first target mentioned above.

8355-8380 is the next target area, where 8355 is 34-week moving average and 8380 is 200-DMA.

Immediate support on the hourly chart has moved up to 8110, with the stop loss of which trading longs can be held on to.

Tech major Infosys will report its quarterly earnings today. Dollar revenue is expected to rise 3.6% q-o-q to $2337 mn. In rupee terms, revenue is expected 5.9% at Rs 15210 cr and profit is expected to rise 7% to Rs 3244 cr. Margin is expected to improve by 100 bps to 25%. 3244. The company is expected to maintain its FY16 revenue growth guidance of 10-12% in constant currency and 7.2-9.2% in dollar terms.

CPI for September would be released today and is expected to show a reading of 4.49%, up from 3.66% in August. Core CPI is expected to be around 4.2-4.3%.

IIP for August would also be released today and is expected to show a growth of 5%, up from 4.2% in July.

The first phase of Bihar assembly election will be held today.

DOVISH FED MINUTES BOOST EQUITIES; STAY LONG WITH THE STOP LOSS OF 8055

DOVISH FED MINUTES BOOST EQUITIES; STAY LONG WITH THE STOP LOSS OF 8055

WORLD MARKETS                             

Dow and S & P 500 gained 0.8% each and Nasdaq rose 0.4% yesterday, fueled by dovish signals from the U.S. Federal Reserve minutes. Dow closed above 17,000 for the first time since Aug. 19.

The September meeting minutes indicated that policymakers were still watching inflation and the impact of slower global growth.

Weekly jobless claims declined to 263,000, a near 42-year low

Energy stocks were the top gainers as nymex oil surged 3.4% to settle at $49.43 a barrel

Earlier Nikkei ended lower by a percent and Shanghai Composite, which opened after a week-long holiday, gained 3%.

European markets gained upto 0.7%. German exports slumped 5.2% in August, it's steepest decline since the height of the financial crisis in 2009.

AT HOME

Benchmark indices ended lower by about two third of a percent, breaking six-day winning streak. Sensex settled at 26846, down 190 points while Nifty lost 48 points to end at 8129. BSE mid-cap and small-cap indices lost 1% and 0.2% respectively. Except a 0.3% and 0.2% rise in BSE Metal and Consumer Durable indices respectively, all the sectoral indices ended in red with FMCG and Healthcare indices leading the tally, giving away 1% each.

FIIs net sold stocks and stock futures worth Rs 49 cr and 631 cr respectively but net bought index futures worth Rs 579 cr. DIIs were net sellers to the tune of Rs 300 cr.

Rupee depreciated 7 paise to end at 65.05/$.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 60 points higher start for our market.

In yesterday's report we had reiterated the upside targets of 8220 followed by 8380 and had advised holding on to trading longs with the stop loss of 8055.

Nifty, after touching a high of 8197 in the opening trade, slipped to end at 8129.

A gap up opening today will again take the benchmark closer to the 8200 mark.

8220, where the 20-week moving average as well as the upper level of the gap created by the big gap down opening on 24th August are placed, continues to be immediate target, a sustained trading above which will open up the space for the further upside till about 8380, where the 200-DMA is placed.

Immediate support on the hourly chart continues to be at 8055, with the stop loss of which trading longs can be held on to.

Indusind Bank will report its quarterly earnings today.

NIFTY EXTENDS WINNING STREAK TO SIXTH DAY; TRAIL STOP LOSS TO 8055

NIFTY EXTENDS WINNING STREAK TO SIXTH DAY; TRAIL STOP LOSS TO 8055

WORLD MARKETS                             

US indices gained between 0.7%-0.9%, helped by a recovery in health care stocks and gains in energy, as investors awaited the beginning of earnings season.

YUM Brands plunged 18.8% after reporting earnings that missed expectations.

Weekly mortgage applications rose 25.5%. August consumer credit increased to $16.02 billion, while July consumer credit was revised up to $18.94 billion from $19.10 billion.

Nymex oil fell 72 cents or 1.5% to $47.81 a barrel, giving back some of Tuesday's 5% surge, after weekly oil inventories showed an increase of 3.073 mn barrels, above expectations of an increase of 2.5 mn barrels. Brent settled at $51.33/bbl, down 59 cents or 1.14%.

Copper gained after The International Copper Study Group said it expects the global copper market will see a deficit of 130,000 tonnes in 2016, reversing its prior estimate of a 230,000-tonne surplus.

European markets, except a 0.8% lower Italy, gained upto 0.7% with auto stocks and miners outperforming. Volkswagen gained 7% after new chief executive, Matthias Mueller, gave details in an interview with a German newspaper about his plans to handle the diesel emissions crisis.

AT HOME

Benchmark indices ended higher by a third of a percent after a choppy trade, extending the winning streak to sixth straight day. Sensex settled at 27036, up 103 points while Nifty rose 24 points to end at 8177. BSE mid-cap and small-cap indices gained 0.1% and 0.4% respectively. Except a 1.6% and 1.4% cut in BSE IT and Teck indices respectively, all the sectoral indices ended in green with Metal and Realty indices leading the tally, up 2.8% and 1.9% respectively.

FIIs net sold stocks and stock futures worth Rs 51 cr and 463 cr respectively but net bought index futures worth Rs 1140 cr. DIIs were net sellers to the tune of Rs 219 cr.

Rupee appreciated 42 paise to end at 64.98/$, a near 8-week high.

OUTLOOK

Today morning Shanghai has opened more than 3% higher after a week long holiday. Other Asian markets are trading mixed and SGX Nifty is suggesting about 15 points higher opening for our market.

Ever since Nifty established higher-top higher-bottom formation on the daily chart by crossing immediate previous top of 8055, we have been working with initial target of 8220, where the 20-week moving average is placed, followed by 8380, where 200 DMA is placed.

The benchmark closed at 8177 yesterday and is on track to achieve the 8220 target.

Immediate support on the hourly chart has moved up to 8055, with the stop loss of which trading longs should be held on to.

8220, 8400 CONTINUE TO BE UPSIDE TARGETS; 8000 IMMEDIATE SUPPORT

8220, 8400 CONTINUE TO BE UPSIDE TARGETS; 8000 IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow ended marginally higher while S & P 500 and Nasdaq lost 0.4% and 0.7% yesterday with the S & P 500 snapping a five day winning streak. Energy and material shares were the greatest advancers in the S & P 500 while healthcare was the greatest laggard.

US August trade deficit came in at $48.3 billion, the widest in five months.

The International Monetary Fund trimmed its global growth forecast for 2015 from 3.3% to 3.1%, citing weaker growth prospects for emerging economies.

Nymex oil surged $2.27 or 5% to $48.53 a barrel after Russia said it was willing to meet with other big oil producers, including the Organization of Petroleum Exporting Countries (OPEC), to discuss the situation in global oil markets and the U.S. Energy Information Administration forecasted that U.S. crude output would slow to 8.9 million barrels per day next year from an estimated 9.2 million in 2015. Brent too rose more than 4% to trade above $51.40. Gold rose $9 to $1146 an ounce.

European markets gained 0.4%-1%, with miners and auto stocks leading the way. Glencore bounced back after the group issued a factsheet on its finances in an effort to soothe investor fears on its debt levels.

AT HOME

Benchmark indices ended higher by four tenth of a percent after a choppy session, extending the winning streak to fifth straight day. Sensex settled at 26933, up 147 points while Nifty rose 34 points to finish at 8153. BSE mid-cap and small-cap indices gained 0.3% and 0.7% respectively. BSE Consumer Durable index soared 4.3%, becoming top gainer among the sectoral indices, followed by 2.4% rise in FMCG index. IT and Teck indices lost 1.2% and 0.8% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 480 cr, 251 cr and 462 cr respectively. DIIs were net sellers to the tune of Rs 425 cr.

Rupee depreciated 12 paise to end at 65.405/$.

India's Nikkei Services PMI fell to 51.3 in September from 51.8 in August. The composite PMI fell to 51.5 from 52.6.

IMF lowered India's 2015-16 growth forecast from 7.5% to 7.3%. For the next year, it expects a growth of 7.5%. China is expected to grow 6.8% this year, followed by 6.3% in the next.

OUTLOOK

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

In yesterday's report we had mentioned that "while 8400 continues to be major upside target to eye, 8220, where the 20-week moving average as well as a gap on the daily chart is placed, is the immediate target to eye" and had asked holding on to trading longs with the stop loss of 8000.

The benchmark, after touching a high of 8181 in the opening trade, eased to end at 8153.

8220 continues to be immediate target above which 8400 would be the next major level to eye. 8000 continues to be immediate support with the stop loss of which trading longs should be held on to.

NIFTY TAKES OUT 8055-8100 HURDLE; STAY LONG WITH THE STOP LOSS OF 8000 FOR TARGETS OF 8220, 8400

NIFTY TAKES OUT 8055-8100 HURDLE; STAY LONG WITH THE STOP LOSS OF 8000 FOR TARGETS OF 8220, 8400

WORLD MARKETS                             

Dow and S & P 500 climbed 1.8% each and Nasdaq rose 1.6% yesterday, extending Friday's surprise intraday reversal, which came after poor jobs report that in turn fueled expectations that the Fed will refrain from tightening monetary policy this year.

News that the U.S., Japan and 10 other Pacific Rim countries reached an agreement on the five-years-in-the-making Trans Pacific Partnership (TPP) also boosted sentiment. The trade deal, called one of the biggest of its kind in a generation, could yield global annual benefits of $295 billion by 2025. The deal still needs final approval from U.S. Congress.

US ISM non-manufacturing came in at 56.9 for September, below Augusts’ 59 read and expectations of 57.5. The final Markit PMI services index for September came in at 55.1, below August's 56.1 and the lowest read since June.

Nymex oil rose 72 cents to settle at $46.26 a barrel.

European markets surged 2.8%-3.8%. The basic resources sector was the top performer.  Glencore surged 16% on the London Stock Exchange on reports that the embattled mining giant was in talks with a few parties, including Saudi Arabia's sovereign wealth fund, to sell a stake in its agricultural business. Eurozone’s final composite purchasing managers' index (PMI) for September came in at 53.6, below Augusts’ figure of 54.3 and hitting its lowest level since May 2015. Euro zone August retail sales were flat month-on-month, but rose 2.3% y-o-y.

AT HOME

Sensex and Nifty soared 2.2% each, registering the largest single day gain after 15th January and closing at the highest level since 21st August. Sensex settled at 26786, up 565 points while Nifty climbed 168 points to finish at 8119. BSE mid-cap and small-cap indices gained 1.8% and 1.6% respectively. All the BSE sectoral indices ended higher with Capital Goods index and Bankex leading the tally, surging 3.3% and 2.8% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 650 cr, 1627 cr and 671 cr respectively. DIIs were net buyers to the tune of Rs 366 cr.

Rupee appreciated 23 paise to end at seven-week high of 65.28/$.

Germany and India yesterday inked 18 MoUs to scale up ties in strategic areas including defence, security, intelligence, railways, trade and investment and clean energy.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 70 points higher opening for our market.

In yesterday's report we had mentioned that "8050-8100 continues to be important resistance area, a crossover of which will also confirm a higher-top higher-bottom formation on the daily chart along with a breakout from a "cup and handle" formation, the target of which comes to around 8400 which also coincides with 200-DMA". We had also advised holding on to trading longs with the stop loss of 7855.

The benchmark soared 168 points to end at 8119, crossing the 8050-8100 resistance decisively.

While 8400 continues to be major upside target to eye, 8220, where the 20-week moving average as well as a gap on the daily chart is placed, is the immediate target to eye.

Immediate support on the hourly chart is placed around 8000, with the stop loss of which trading longs should be held on to.

US EQUITIES SOAR ON WEAK JOBS REPORT; NIFTY SET TO CHALLENGE 8050-8100 RESISTANCE AREA

US EQUITIES SOAR ON WEAK JOBS REPORT; NIFTY SET TO CHALLENGE 8050-8100 RESISTANCE AREA

WORLD MARKETS                             

US indices, after opening with cuts of nearly a percent and half on Friday, saw a near 3% rebound from the bottom of the day to end with gains in the vicinity of a percent and half after a weak U.S. employment report cooled expectations the Federal Reserve will start raising interest rates soon.

September jobs report showed the U.S. economy created 142,000 jobs, a number far below the expected 203,000. August and July figures were also revised lower. Unemployment held at 5.1% and the participation rate plunged to 62.4%. Average hourly wages fell by a cent to $25.09 and were up only 2.2% from the same month in 2014, pointing to marginal inflationary pressures.

In other economic news, August factory orders showed a decline of 1.7%, the largest drop in eight months.

The 10-year yield held near 1.98% after hitting 1.92%, falling below 2% for the first time since Aug. 24. The 2-year yield also hit its lowest level since that date, holding near 0.58% in the close. Dollar index fell 0.3%.

Nymex oil rose 80 cents or 1.8% to $45.54 a barrel after the number of oil rigs in operation in U.S. oilfields fell by 26 in the week ended Oct. 2. That compares with a total decline of 35 rigs in the previous four weeks.

European markets gained 0.4%-1.2%. Volkswagen closed down 3.7% after Credit Suisse slashed its price target for the stock and rated it "underperform." Mining giant Glencore continued to recover and gained 4.4% on Friday.

For the week Dow and S & P 500 gained 1% each while Nasdaq rose 0.5%. European markets ended mixed. Dax lost 1.4%, followed by half a percent lower CAC. FTSE and Italy gained three tenth of a percent.

AT HOME

After gaining nearly three fourth of a percent in the initial trade, benchmark indices gave away most of the gains through the session to end marginally higher ahead of the long weekend. Sensex settled at 26221, up 66 points while Nifty added 2 points to end at 7951. BSE mid-cap and small-cap indices gained 0.2% each. BSE Healthcare and Consumer Durable indices climbed 1.5% and 0.9% respectively, becoming top gainers among the sectoral indices while Realty index tumbled 1.8%, becoming top loser, followed by 0.6% cut in Power index.

FIIs net bought stocks and index futures worth Rs 49 cr and 964 cr respectively but net sold stock futures worth Rs 131 cr. DIIs were net buyers to the tune of Rs 152 cr.

Rupee appreciated 7 paise to end at 65.51/$.

HCL Tech plunged after the IT major lowered its dollar revenue guidance for the third quarter in a row. The company said that its dollar revenues for the September quarter would be impacted adversely to the tune of 80 bps on account of adverse currency movement and issues with a client in the public services vertical.

India's Nikkei manufacturing PMI fell to a seven-month low of 51.2 in September from 52.3 in August and against prediction of 52.

Maruti reported lower-than expected 3.7% y-o-y rise in September sales at 1.13 lakh units. Eicher Motors reported 59% surge in Royal Enfield sales at 44491 units. Company's commercial vehicle sales rose 10.7% at 4047 units. Ashok Leyland sold 14771 units, a growth of 61% y-o-y. M & M sold 6% less vehicles at 39693 units. Tata Motors reported 2% dip at 45215 units. Hero MotoCorp reported marginal increase at 6.07 lakh units.

For the week Sensex and Nifty gained 1.4% and 1% respectively.

OUTLOOK

Markets in China remain closed for National Day holidays and will re-open Thursday. Other Asian markets are trading with gains of upto a percent and half and SGX Nifty is suggesting about 50 points higher opening for our market.

In Thursday's report we had mentioned that having crossed the 7926 top made on RBI policy day, Nifty was headed to next resistance area placed in 8055-8100 region where two immediate previous tops on the daily chart as well as the upper band of the daily bollinger are placed.

The benchmark, after touching a high of 8008 in the initial trade, slipped to end at 7950 on Thursday and a gap up opening today will take it again near the 8000 mark.

8050-8100 continues to be important resistance area, a crossover of which will also confirm a higher-top higher-bottom formation on the daily chart along with a breakout from a "cup and handle" formation. The target of this formation comes to around 8400 which also coincides with 200-DMA.

7855 is the immediate support on the hourly chart, upon breach of which 7690, the bottom made last week, would be the next important support to eye.

Traders are advised to wait for the crossover of 8055-8100 resistance area before taking fresh longs on Nifty. Existing longs should carry a stop loss of 7855.

WORLD EQUITIES END SEPTEMBER QUARTER ON A POSITIVE NOTE

WORLD EQUITIES END SEPTEMBER QUARTER ON A POSITIVE NOTE

WORLD MARKETS                             

US indices soared 1.5%-2.3% yesterday, following a rally in Asia and Europe.

The September ADP Employment report showed private companies added 200,000 jobs. Weekly mortgage applications fell 6.7 percent on a seasonally adjusted basis for the week ending September 25. The September Chicago purchasing managers index came in at 48.7, below expectations of 53.0.

Nymex oil fell 14 cents or 0.31% to $45.09 a barrel. Copper spiked amid quarter-end positioning and news of an output cut in Chile. Commodities trading and mining giant Glencore continued to recover with a gain of more than 11%. Gold fell $12 to $1115 an ounce.

European markets gained 2.2%-2.7%. Auto shares climbed after China said it has halved sales tax on small cars. Euro zone consumer prices fell 0.1% in September for the first time in six months, highlighting the continued risk of deflation.

Earlier Nikkei ended higher by 2.7%, Hang Seng gained 1.4% and Shanghai rose 0.5%.

AT HOME

After a gap up opening, benchmark indices traded in a range for better part of the day, but saw fresh surge in last hour to end with big gains of nearly a percent and half. Sensex settled at 26155, up 376 points while Nifty rose 106 points to finish at 7949. BSE mid-cap and small-cap indices gained 1.4% and 1.7% respectively. Except a 0.4% cut in Bankex, all the sectoral indices ended in green with Metal and FMCG indices leading the tally, putting on 3.4% and 2.4% respectively.

FIIs net bought stocks worth Rs 116 cr but net sold index futures and stock futures worth Rs 145 cr and 111 cr respectively. DIIs were net sellers to the tune of Rs 192 cr.

Rupee appreciated 38 paise to end at 65.5825/$.

April-August fiscal deficit stood at 3.69 lk cr vs Rs 3.98 cr yoy.

The Union government yesterday announced revival of the long-stricken Dabhol power plant. The central and state governments will provide financial support to the project, GAIL  will provide gas under the government's recently-launched gas supply scheme for stranded power plants while NTPC  will operate it. The Indian Railways will enter into a long-term power purchase agreement with the company at a price of Rs 4.7 per unit.

Natural gas prices were yesterday cut by a steep 18% to USD 3.82 per unit, the biggest reduction in rates ever, that will dent government revenues by about Rs 800 crore and hit profits of producers like ONGC

India's core sector, comprising of eight key industries, grew by 2.6% in August, up from 1.1% in July.

OMCs hiked diesel price by 50 paise per litre yesterday.

OUTLOOK

China's final Caixin/Markit manufacturing PMI for September has fallen to a fresh six-and-a-half year low of 47.2, versus an earlier flash estimate of 47. Government's official PMI rose to 49.8 in September, up from Augusts’ three-year low of 49.7.

Markets in China and Hong Kong are shut today, other Asian markets are trading with gains of upto a percent and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that 7926 and 7691, the top and bottom made on RBI policy day, would be the immediate resistance and support level to eye and that a crossover of 7926 would take the benchmark in the vicinity of major 8100 hurdle.

Nifty yesterday comfortably crossed 7926 mark and closed at 7949. 8055-8100, where two immediate previous tops on the daily chart are placed, is the next resistance area, a crossover of which will also confirm a higher-top higher-bottom formation on the daily chart.

Immediate support on the hourly chart is placed at 7850.

India's September manufacturing PMI will be released today. Auto companies will report their September sales figures.

IDFC will start trading ex-banking business from today.