NIFTY MARCHES TOWARDS 7980 TARGET; TRAIL STOP LOSS TO 7810

NIFTY MARCHES TOWARDS 7980 TARGET; TRAIL STOP LOSS TO 7810

WORLD MARKETS

Dow and S & P 500 ended almost flat after a roller-coaster session while Nasdaq, weighed down by healthcare and technology stocks, ended with cut of half a percent.

Apple fell 2% for its lowest level since June 2014.

US oil recovered from an intraday dip to settle 47 cents higher at $46.70 a barrel while Brent gained 48 cents to finish at $48.08.

In economic news, weekly jobless claims rose to 294,000. Import prices rose 0.3% in April, while export prices rose 0.5%.

Dollar index gained about half a percent.

European markets lost upto 1.1% with DAX leading on the way down. A sharp fall of 2 to 3 percent in the price of several metals caused basic resources to fall 2.4% as a sector

BoE voted unanimously to keep its main interest rate on hold at 0.5% and also warned of risks to the U.K. economy if the country chooses to leave the European Union, this June.

                                                             

AT HOME

After gaining about nine tenth of a percent in the initial trade, benchmark indices gave away all the gains, only to recoup most of them in late noon trade to end higher by about seven tenth of a percent. Sensex settled at 25790, up 193 points while Nifty added 52 points to finish at 7900. BSE mid-cap and small-cap indices gained 0.7% and 0.9% respectively. Except a marginal dip in BSE Capital Goods index, all the sectoral indices ended in green with Consumer Durable index leading the tally with gain of 1.4%, followed by 1.1% uptick in IT and Realty indices.

FIIs net bought stocks, index futures and stock futures worth Rs 24 cr, 420 cr and 340 cr respectively. DIIs were net buyers to the tune of Rs 258 cr.

Rupee depreciated 6 paise to end at 66.62/$.

Dr Reddy reported 86% dip in Jan-March quarter net profit at Rs 74.6 cr, hurt by one-time Venezuela write-off to the tune of Rs 431 cr. Total income slipped 3% to Rs 3756 cr. Consolidated adjusted EBIDTA at Rs 900 cr and margin at 24% were better-than-estimates.

India's retail inflation, as measured by the consumer price index for April, rose to 5.39% from a six-month low of 4.83% in March on higher food and fuel prices. Core CPI too edged up to 4.9% from 4.75%.

Industrial output, measured by index of industrial production rose just 0.1% in March as against an uptick of 2% in the previous month due to poor performance of manufacturing and mining sectors coupled with sharp decline in output of capital goods.

MSCI, in its semi-annual review has added Bajaj Finance, Havells, Titan and yes Bank to MSCI India Index while moving Rcom, REC and United Breweries to samll cap index. Global Small Cap India index has seen 23 additions and 8 deletions. Key inclusions include AshokaBuldcon, AB Fasion, Aegis logistics, Balrampur Chini, BoI , CanaraBank, V-Guard, Supreme ind, Chennai Petro, Coffee Day, Essel Propack, HFCL, Jubilant Life, KPR Mills, Mahindra CIE Automotive, Navkar Corp, PNC Infra, SH Kelkar, Spicejet and Canfin homes.

OUTLOOK

Today morning, except a marginally higher Shanghai, other Asian markets are trading with cuts of upto a percent with Nikkei leading the losses and SGX Nifty is suggesting about 40 points lower opening for our market.

We had asked going long on Nifty after immediate hurdle of 7780 was taken out on last Friday for the target of 7990, which is the top made in April. The benchmark has since then moved up and touched a high of 7916 yesterday.

7980-7890 continue to be upside target to eye. Immediate support on the hourly chart has moved up to 7810, with the stop loss of which trading longs should be held on to.

Bank of Baroda and Cadila will report their quarterly earnings today.

Other data to watch out today would be US retail sales for April which is either going to confirm things really are weak or the employment number and the GDP number was temporary weakness.

NIFTY REBOUNDS FROM 7780 SUPPORT

NIFTY REBOUNDS FROM 7780 SUPPORT

WORLD MARKETS                             

S & P 500 and Nasdaq lost 1% each and Dow fell 1.2% yesterday despite gain in oil as disappointing earnings from Disney and Macy's weighed. For the Dow, it was the worst daily fall since Feb. 11.

Disney plunged 4% after reporting its first earnings miss in five years, while revenue was also below forecasts. Mecy's plunged 15% after lowering full years forecast and revenue missed estimates.

US oil rose 3.5% or$1.57 to its highest in six months at $46.23 a barrel and Brent climbed 4.6% to $47.60 after data from the U.S. Energy Information Administration showed crude inventories fell 3.4 million barrels last week, against market expectations for an increase.

Dollar index fell half a percent, breaking six-day winning streak. Gold rose $11 to $1275 an ounce.

European markets, except a marginally higher FTSE, lost 0.5%-1.3% as a mixed set of earnings and weakness in the banking sector weighed on sentiment, despite gains in various commodities.

AT HOME

After plunging about a percent and third at the open on the back of Mauritius tax treaty amendment, Sensex and Nifty recouped about half of the losses through the volatile trading session to end lower by 0.7% and 0.5% respectively. Sensex settled at 25597, down 176 points while Nifty lost 39 points to finish at 7849. BSE mid-cap index gained 0.2% while Small-cap index lost 0.03%. Except a 0.4% and 0.3% rise in Basic Material and Consumer Discretionary indices respectively, all the BSE sectoral indices ended in red with Telecom index leading the tally, down 2.3%, followed by 0.9% cut in Realty index.

FIIs net sold stocks and index futures worth Rs 362 cr and 962 cr respectively but net bought stock futures worth Rs 1072 cr. DIIs were net buyers to the tune of Rs 730 cr.

Rupee appreciated 11 paise to end at 66.56/$.

Kotak Mahindra Bank posted 9.6% rise in Jan-March quarter standalone net profit at Rs 696 cr. NII rose 5.2% to Rs 1857 cr. Gross NPA stood at 2.36% v/s 2.3% on a sequential basis. Net NPA rose to 1.06% from 0.96%.

Asian Paints reported 20% increase in consolidate net profit at Rs 409 cr for the March quarter. Sales rose 12.3% to Rs 3919 cr. Operating profit rose 26% to Rs 704 cr while margins expanded by 190 bps y-o-y to 17.72%.

Rajya Sabha yesterday passed the Insolvency and Bankruptcy Code bill. The bill seeks to create time-bound processes for insolvency resolution of companies and individuals.

OUTLOOK

Today morning, Shanghai is down a percent and half, other Asian markets are trading with cuts of upto 0.8% and SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report, when Nifty was set to open with a big down gap, we had reiterated the view that 7770 is the immediate support, with the stop loss of which trading longs should be held on to.

The benchmark, after touching a low of 7781, rebounded through choppy session to end at 7849.

7770 continues to be immediate support, a sustained trading below which will generate a sell on the hourly chart and would pave the way for further correction. 7678, the low made last week, would be the next target in that case.

IIP for March will be released today and is expected to show a growth of 2.52% vs 2% in March. April CPI is expected to inch up to 5.05% from 4.83% in March. 

Dr Reddy will report its quarterly earnings today.

NIFTY SET TO PLUNGE ON MAURITIUS TREATY AMENDMENT; 7770 IS THE IMMEDIATE SUPPORT

NIFTY SET TO PLUNGE ON MAURITIUS TREATY AMENDMENT; 7770 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices, supported by gains in oil and weakness in oil, soared a percent and fourth yesterday.

Nymex oil climbed $1.22 or 2.8% to $44.66 a barrel amid supply disruptions and outages in Canada and Nigeria and expectations that the build-up in U.S. crude inventories will be lower than expected. Brent soared 4.3% to $45.52.

Yen weakened against the dollar to around 109.3 after Japanese Finance Minister said the government will intervene in the currency market if "one-sided" yen rises last long enough to hurt the economy. Dollar index rose 0.17% for its first six-day win streak since the one in April 2015.

US wholesale inventories were up 0.1% in March, in-line with expectations. The Job Openings and Labor Turnover Summary (JOLTS) report showed a rise in job openings to 5.8 million in March, while the hiring rate edged down to 3.7%. Small business optimism index rose for the first time this year, up 1.0 point from a two-year low in March to 93.6 in April.

In China, rebar, or reinforced steel, plunged 7.6% for its biggest intraday fall in seven years on renewed worries about demand. Iron ore lost 6%.

European markets, helped by some positive earnings and a sharp uptick in commodity stocks and prices, gained 0.4%-1.4%. 

Earlier China's CPI rose 2.3% y-o-y for a third-straight month in April, helped primarily by a spike in food prices. PPI fell 3.4%, improving from March's 4.3% fall.

AT HOME

After falling about a third of a percent in the morning trade, benchmark indices climbed about two third of a percent from the bottom of the day in the noon to end higher by about a third of a percent, extending the winning streak to second day. Sensex settled at 25773, up 84 points while Nifty added 22 points to finish at 7888. BSE mid-cap and small-cap indices gained 0.2% and 0.1% respectively. BSE Capital Goods index climbed 1.5% to become top gainer among the sectoral indices, followed by 0.7% rise in Consumer Durable index. Metal and Auto indices were the top losers, down 1.2% and 0.9% respectively.

FIIs net bought stocks worth Rs 329 cr but net sold index futures and stock futures worth Rs 378 cr and 732 cr respectively. DIIs were net buyers to the tune of Rs 68 cr.

Rupee depreciated 9 paise to end at 66.67/$.

ZEE Entertainment reported 13% growth in Jan-March quarter net profit at Rs 261 cr. Total income rose 13% to Rs 1532 cr. Ad revenue growth at 29% and EBIDTA margin at 27% were better-than-expectation.

In an important development, government yesterday said it had signed an amended bilateral tax treaty with Mauritius which would help prevention of fiscal evasion by giving it right to levy taxes on income and capital gains. According to this, for capital gains arising during April 1, 2017 to March 31, 2019, investors will get a benefit of 50% reduction in tax rate in India. However, from FY20, taxation at fulll domestic rate in India will take place. The government also said it will sign similar treaty with Singapore.

OUTLOOK

Today morning Asian markets are trading mixed with changes of upto half a percent and SGX Nifty is suggesting about 110 points lower opening for our market.

Ever since Nifty took out immediate hurdle of 7780 on Monday, we have been working with the upside target of 7990, which is the top made in April. The benchmark has since then moved up and yesterday closed at 7888 after touching a high of 7897.

However, a big gap down opening would take the benchmark below 7800. 7770 is the immediate support, a sustained trading below which will generate a sell on the hourly chart and would pave the way for further correction. 7678, the low made last week, would be the next target in that case.

Kotak Mahindra Bank and Asian Paints will report their quarterly earnings today.

NIFTY SOARS AFTER TAKING OUT 7780 HURDLE; STAY LONG WITH THE STOP LOSS OF 7760

NIFTY SOARS AFTER TAKING OUT 7780 HURDLE; STAY LONG WITH THE STOP LOSS OF 7760

WORLD MARKETS                             

Dow lost 0.2% while S & P 500 and Nasdaq gained 0.1% and 0.3% respectively as helthcare stocks rose while materials and energy declined tracking fall in oil and metal prices.

Nymex oill fell $1.22 or 2.7% to $43.44 a barrel while Brent dipped 3.8% to $43.63.

Base metals on LME also finished down, with copper off 2.6%, aluminium down 2.3% and nickel down 5%. Gold tumbled $27 to $1267 an ounce, its worst day since Feb. 16.

Dollar index rose 0.3%, extending the winning streak to fifth day. Japanese Finance Minister said that Tokyo is ready to intervene in the currency market if yen moves are volatile enough to hurt the country's trade and economy.

In Europe, FTSE and Italy fell 0.2% and 0.9% respectively while DAX and CAC climbed 1.1% and 0.5% respectively.

AT HOME

Sensex and Nifty soared 1.8% and 1.7% respectively, registering the largest single day gain since 13th April. Sensex settled at 25689, up 460 points while Nifty added 133 points to finish at 7866. BSE mid-cap and small-cap indices gained 1.2% each. All the BSE sectoral indices ended in green with Bankex and Finance indices leading the tally, up 2.4% each.

FIIs net bought stocks and index futures worth Rs 224 cr and 695 cr respectively but net sold stock futures worth Rs 857 cr. DIIs were net buyers to the tune of Rs 351 cr.

Rupee depreciated 4 paise to end at $66.58.

HUL reported 7.1% growth in Jan-March quarter net profit at Rs 1090 cr while total income grew 3.5% to Rs 7946 cr. EBIDTA rose 11.4% to Rs 467 cr while EBIDTA margins stood at 18.5% vs 17.2%. However, volume growth stood at 4%, down from 6% y-o-y.

OUTLOOK

China's April CPI has shown an uptick of 3.4% y-o-y while PPI is down 3.4%.

Nikkei is up more than a percent while other Asian markets are trading mixed with modest changes. SGX Nifty is suggesting about 20 points lower opening for our market.

In yesterday's report we had mentioned that 7780 is the immediate resistance, a crossover of which will generate a buy on the hourly chart and would pave the way for further upmove.

The benchmark crossed 7780 hurdle in the initial trade itself and as expected surged all the way to 7874 before closing at 7866.

7890, the top made on 3rd May, is the immediate hurdle on the hourly chart upon crossover of which 7992, the top made in April would be the next major target as well as the hurdle to eye.

Immediate support on the hourly chart is placed at 7760, with the stop loss of which trading longs should be held on to.

ZEEL will report its quarterly earnings today.

7700 CONTINUES TO BE SUPPORT; 7780 IS THE IMMEDIATE HURDLE

7700 CONTINUES TO BE SUPPORT; 7780 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained about four tenth of a percent amid gains in oil prices, after April employment report missed expectations. Materials led on the way up while utilities lagged.

The April nonfarm payrolls report showed creation of 160,000 jobs, well below expectations of more than 200,000 jobs. Unemployment came in at 5%, as expected, while average hourly wages for the month rose 0.3%, also in-line with expectations. The labor force participation rate fell to 62.8%.

Dollar index, after falling to 93.28 on the back of weak jobs data, rebounded to end mildly higher at 93.83. Gold climbed $22 to $1294 an ounce.

US crude rose 34 cents or 0.8% to $44.66 a barrel. The weekly oil rig count fell by 4 for a decline of 340 rigs year-over-year.

In Europe, FTSE and DAX ended marginally higher while France and Italy fell about four tenth of a percent.

For the week, Dow and S & P 500 fell 0.2% and 0.4% for their first two-week losing streak since Feb. 12. Nasdaq lost 0.8% for its third straight week of losses. European markets tumbled 1.7%-3%. Dollar index gained 0.8% for its best week in more than a month. Nymex oil fell 2.7%, ending four-week win streak. Gold inched up 0.3% for its second straight week of gains.

AT HOME

After falling about three fourth of a percent in the initial trade, benchmark indices recouped most of the losses through the day to end marginally lower. Sensex settled at 25228, down 34 points while Nifty lost 2 points to finish at 7733. BSE mid-cap index gained 0.4% while the small-cap index lost 0.2%. BSE Utilities and Consumer Durable indices gained 0.9% and 0.7% respectively to become top gainers among the sectoral indices while Healthcare and IT indices lost 0.9% and 0.8% respectively to become top losers.

FIIs net bought stocks and stock futures worth Rs 28 cr and 85 cr respectively but net sold index futures worth Rs 989 cr. DIIs were net buyers to the tune of Rs 180 c.

Rupee ended unchanged at $66.55.

For the week, Sensex and Nifty lost 1.5% each to extend the losing streak to second week.

Grasim reported 37% jump in consolidated net profit at Rs 696 cr. Revenue rose 13.4% to Rs 10000 cr. Operating profit rose 29.3% to Rs 2002 cr and margin rose 245 bps y-o-y to 20.02%.

IT services major Cognizant reported 0.9% q-o-q dip in Jan-March quarter revenue at $3.2 bn. The company lowered its revenue forecast for the fiscal 2016 to be in the range of USD 13.65-14 bn from its earlier estimate of 13.65-14.2 bn.

OUTLOOK

Data over the weekend showed China's April exports fell 1.8% and imports plunged 11%.

Today morning, Shanghai is down nearly 2% but other Asian markets are trading with gains in the vicinity of half a percent SGX Nifty is suggesting about 25 points higher opening for our market.

Oil is up nearly 2% on the back of reports over the weekend that wildfires in Canada has shut half of the country's vast oil sands capacity and exit of Saudi Arabi's long-time oil minister, which is being seen as new era for crude markets and appeared to be a reaffirmation of Saudi policy to let oil set its own pricing.

Nifty, for past three trading sessions, has been consolidating around 7700 mark, which we had suggested as the downside target as well as the support. 7700 is the 61.8% retracement level of the 7517-7992 upmove and a decisive breach of 7700 would open up the possibility of the retest of 7517 bottom.

Immediate resistance on the hourly chart has moved lower to 7780, a crossover of which will generate a buy on the hourly chart and would pave the way for further upmove.

HUL will report its quarterly earnings today.

7700-7810 IS THE IMMEDIATE RANGE

7700-7810 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

Dow ended marginally higher, S & P 500 a tad lower and Nasdaq lost 0.2% yesterday ahead of Friday's non-farm payroll data. Consumer discretionary led declines while Energy led advancers.

Weekly jobless claims rose to 274,000

Nymex oil, after gaining more than 4%, pared gains to close 1.2% or 54 cents higher at $44.32 a barrel. Initial gains were supported by concerns of a near-term supply shortage due to a huge wildfire near Canada's oil sands and escalating tensions in Libya. Brent rose 0.9% or 39 cents to $45.01.

Dollar index rose for a third-straight day with gains of more than half a percent.

Earlier, China Caixin services PMI came in at 51.8 for April marking moderation from 52.2 in March.

In Europe, FTSE, DAX and Spain gained 0.1%-0.4% while France and Italy lost 0.1% each. Britain's April services PMI hit 52.3, the lowest since February 2013 and down from the previous month's reading of 53.7.

AT HOME

Sensex and Nifty gained 0.6% and 0.4% respectively today and broke the three-day losing streak. Sensex added 160 points to settle at 25262 while Nifty finished at 7735, up 29 points. BSE mid-cap and small-cap indices however ended marginally in the red. BSE Capital Goods index climbed 1.6%, becoming top gainer among the sectoral indices, followed by 0.9% rise in Industrial index. Telecom index tumbled 1.8% to lead the losers, followed by half a percent cut in Consumer Durable index.

FIIs net sold stocks and index futures worth Rs 389 cr and 993 cr respectively but net bought stock futures worth Rs 102 cr. DIIs were net buyers to the tune of Rs 252 cr.

Rupee appreciated 1 paise to end at 66.55/$.

Eicher Motors reported 71.3% jump in net profit at Rs 334.5 cr while total income rose 46.6% to Rs 3765 cr. EBITDA rose 75% to Rs 640 crore while EBITDA margin stood at 17% versus 14.3% year-on-year.

The Lok Sabha yesterday passed the Insolvency and Bankruptcy Code 2015. The law once implemented will lead to speedier insolvency resolutions and improve ease of doing business in India. As per the law, cases of insolvency will be resolved within a period 180 days, which can be extended by another 90 days.

Hero MotoCorp's Jan-March quarter met street estimates with net profit rising 71% to Rs 814 cr while total income rose at better-than-expected 11% to Rs 7512 cr. EBIDTA rose 40% to Rs 1176 cr while EBIDTA margin was at 15.7% vs 12.3% y-o-y.

RBI yesterday unveiled draft guidelines for 'on top' bank licenses according to the which, non-banking finance companies and resident individuals or professionals with 10 years of experience in banking and finance will be eligible to apply. Also eligible are private sector entities and groups owned and controlled by residents, provided they have total assets worth at least ₹5,000 crore, with the non-financial group business not accounting for more than 40 per cent of the total assets or the gross income. These norms could encourage big non-banking financial players such as Bajaj Finserv Ltd, L&T Finance Holdings, M & M finance, Reliance Capital and Shriram Capital to throw their hats in the banking ring.

The Lok Sabha yesterday approved the Finance Bill with minor amendments.

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.

Nifty, after achieving the downside target of 7700 on Wednesday rebounded yesterday to touch a high of 7777 but closed off the day high at 7735.

7700 continues to be immediate support upon breach of which 7635, where the trendline adjoining bottoms made on 16th March and 11th April is placed, would be the next target to eye.

7810 continues to be immediate hurdle, a sustained trading above which is required to generate a buy on the hourly chart.

Titan will report its quarterly earnings today.

Key data to watch out today would be the US April non-farm payroll where addition of 2 lac jobs is expected. The data will likely influence expectations of whether the Federal Reserve will pull the trigger in June.

NIFTY ACHIEVES 34-DMA TARGET; 7810 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 34-DMA TARGET; 7810 IS THE IMMEDIATE HURDLE

 

WORLD MARKETS                             

 

Dragged down by energy and materials, Dow and S & P 500 fell 0.6% each while Nasdaq lost 0.8% yesterday.

 

ISM non-manufacturing for April was 55.7, above expectations and rising from March's 54.5 print. The employment index rose to 53.0 from 50.3 the prior month. The final April read on Markit services PMI rose to 52.8 from 51.3 in March. Factory orders rose a more-than-expected 1.1% in March. ADP employment report for April missed expectations with a decline from the prior month to 156,000. March trade deficit was $40.4 billion. First quarter productivity declined at an annual rate of 1%. Weekly mortgage application volume fell 3.4%.

 

US oil ended up 13 cents or 0.3% at $43.75 a barrel but Brent settled 0.8% down at $44.62 after an EIA report showed a rise of 2.8 million barrels.

 

Dollar index gained about 0.3%. Two Fed speakers hinted at a possible rate hike in June. Gold fell $17 to $1274 an ounce. Copper ended lower by 1.1% and Iron ore declined about 2.5%.

 

Except a modest 0.2% cut in Italy, rest of European markets, weighed down by sharp decline in mining stocks and renewed pressure in oil, lost 1%-1.3%.

 

AT HOME

 

Benchmark indices fell half a percent today, extending the losing streak to third straight day and closing at the lowest level since 11th April. Sensex lost 128 points to settle at 25102 while Nifty finished at 7707, down 40 points. BSE mid-cap and small-cap indices lost 1.2% and 1% respectively. Except a 0.2% rise in IT index, all the BSE sectoral indices ended in red with Metal and industrial indices leading the tally, down 3.5% and 2.8% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 66 cr, 1278 cr and 627 cr respectively. DIIs were net sellers to the tune of Rs 79 cr.

 

Rupee appreciated 13 paise to end at 66.55/$.

 

Adani Port nosedived 12% on lower-than-expected 2% cargo growth and jump in loans and advances.

 

Tata Motors plunged 6.5% after JLR April US sales fell 2% y-o-y.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting a flattish opening for our market.

 

Readers would recall that we had recommended going short on Nifty after a sell on hourly chart was generated below 7865 and since then have been working with downside target of about 7700, where 34-DMA was placed.

 

The benchmark touched a low of 7697 yesterday before closing at 7707, achieving the target mentioned above and vindicating our view.

 

A sustained trading below 7700 can take Nifty to around 7630, where a trendline adjoining bottoms made on 16th March and 11th April lands a support.

 

In yesterday's report we had advised booking some profit in short positions as 7700 approaches. Remaining positions should carry a stop loss of 7810, which is now the immediate hurdle on the hourly chart.

 

Hero Moto Corp and Eicher Motors will report their quarterly earnings today.