BENCHMARK INDICES REBOUND FROM MORNING LOWS; 10680-10840 ARE THE LEVELS TO EYE

BENCHMARK INDICES REBOUND FROM MORNING LOWS; 10680-10840 ARE THE LEVELS TO EYE

WORLD MARKETS

US indices gained 0.2%-0.6% as retail shares jumped on the back of strong quarterly earnings from retailer Macy's.

Macy's rallied 10.8% after reporting same-store sales growth of 4.2% last quarter versus an estimate of 1.4%.

U.S. 10-year yield surpassed the 3.1% level for the first time since Jul 8, 2011.

Oil rose to a fresh 3-1/2 year high buoyed by a second consecutive weekly decline in U.S. crude inventories and continued signs of a pull back in the global glut of oil. WTI rose 0.3% to $71.49 while Brent rose 85 cents or 1.1% to $79.28/bbl.

FTSE, CAC and DAX gained 0.2%-0.3% but Italy, on concerns over its future government, plunged 2.3% and Spain fell 1%. Italian 10-year bond yield rose 16 basis points, its biggest daily rise since November 2016.

US President Trump said that whether his planned meeting with North Korean leader Kim Jong Un goes through remained to be seen. Earlier, North Korea said it would rethink the June 12 summit if the U.S. insisted on denuclearization.

AT HOME

After falling nearly a percent in first hour, Sensex and Nifty recouped nearly half of the losses through the session to end lower by 0.4% and 0.6% respectively. Sensex lost 156 points to settle at 35388 while Nifty finished at 10741, down 61 points. BSE mid-cap index fell 0.3% while small-cap index rose 0.1%. BSE Energy and Oil & Gas indices tumbled 1.8% and 1.6% respectively, becoming top losers among sectoral indices while Realty and FMCG indices were the top gainers, up 2% and 1.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 699 cr, 637 cr and 397 cr respectively. DIIs were net buyers to the tune of Rs 229 cr.

Rupee appreciated 32 paise to end at 67.79/$.

Karnataka governor yesterday invited the BJP to form the government and has given him 15 days to prove majority. Congress moved to Supreme Court against the decision but Supreme Court, in late night proceedings, refused to stay Yeddyrappa's swearing-in as Karnataka CM. A three-judge apex court bench also made it clear that the swearing-in and the government formation would be subject to the final outcome of the case before it. Next hearing will take place on Friday 10.30 am.

JSW Steel earnings beat estimates on all counts. Net profit soared 186% y-o-y to Rs 2879 cr while revenue rose 25% to Rs 20817 cr. EBIDTA rose 67% to Rs 5290 cr and margin expanded 640 bps to 25.4%.

Tata Steel to beat estimated with consolidated net profit of Rs 14688 cr as against a loss of Rs 1168 c in the same quarter last year, on the back of a one-time gain of Rs 11376 cr from the restructuring of its UK business' pension scheme. Revenue grew 6.7% to Rs 36132 cr. Margins fell to 17.98% from 20.75%.

ITC reported in-line with estimated net profit but beat on margin. Net profit rose 9.9% y-o-y to Rs 2933 cr while revenue fell 5% to Rs 10586 cr on account of 4.3% decline in cigarette sales. EBIDTA rose 7% to Rs 4144 cr while margins expanded 430 bps to 39.1%.

Hindalco's revenue was slightly above estimate but operational performance as well as net profit fell short of expectation. Net profit fell 25% y-o-y to Rs 377 cr. Revenue rose 6% to Rs 11681 cr. EBIDTA fell 6.6% to Rs 1258 cr and margin fell 140 bps to 10.8%.

OUTLOOK

Today morning, Nikkei is up 0.4% but Hang Seng and Shanghai are modestly lower. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that a breach of 10760 would generate a "Sell" on the hourly chart and 10670, where 20-DMA was placed, would be the next downside target if that happens.

Nifty yesterday broke 10760 support and plunged all the way to 10700 but recovered later to end at 10741.

20-DMA, placed around 10680, continues to be immediate downside support below which 10600 would be the next important support to eye.

10840, the 61.8% retracement level of the recent 10930-10700 fall, would be the immediate hurdle on the way up, with the stop-loss of which, trading shorts can be held on to.

Bajaj Finance and Escorts will report their quarterly earnings today.

DOW BREAKS EIGHT-DAY WINNING STREAK ON SOARING YIELD; NIFTY RETREATS FROM THE VICINITY OF 10950 TARGET

DOW BREAKS EIGHT-DAY WINNING STREAK ON SOARING YIELD; NIFTY RETREATS FROM THE VICINITY OF 10950 TARGET

WORLD MARKETS

US indices fell 0.7%-0.8%, with the Dow snapping 8-day winning streak after Home Depot sales missed forecasts and the U.S. 10-year Treasury yield rose to 3.09%, its highest in around seven years.

US retail sales increased 0.3% in April, down from a 0.8% gain in March, which was revised higher.

Dollar index rose 0.7% to 93.23, its strongest level since December.

US oil rose 35 cents to $71.31, settling near 3-1/2 year high. Brent rose 19 cents to $78.42 a barrel. Both however, retreated from higher levels on concerns that China's reported weaker-than-expected investment and retail sales in April and a drop in home sales.

European markets, except a marginally lower DAX, gained 0.2%-0.3%. Euro-area economic growth decelerated to 0.4% in the first quarter, down from 0.7% in the fourth quarter of last year. Germany, the euro zone's largest economy, slowed to 0.3% growth in the first quarter, down from 0.6% in the prior quarter. Germany's ZEW economic sentiment index for May showed a reading of -8.2 — it's lowest since November 2012.

AT HOME

After climbing more than a percent on early indications of BJP getting simple majority in Karnataka assembly elections, benchmark indices gave away all the gains to end marginally in the red. Sensex settled at 35544, down 13 points while Nifty lost 5 points to finish at 10802. BSE mid-cap and small-cap indices fell 0.8% and 0.6% respectively. BSE Realty and Industrial indices tumbled 1.9% and 1% respectively, becoming top losers among the sectoral indices while IT and Teck indices gained 0.5% and 0.3% respectively, becoming top gainers.

FIIs net sold stocks and stock futures worth Rs 518 cr and 145 cr respectively but net bought index futures worth Rs 660 cr. DIIs were net buyers to the tune of Rs 531 cr.

Rupee plunged 56 paise to end at 68.07/$, it's weakest since January 25, 2017.

13.72 EXPR 25.91 5.17% 39.63 4.6PRUDENT

According to final tally, BJP won 104 out of 222 seats in Karnataka, falling short of simple majority. Both BJP and Congress-JDS post-poll alliance have claimed right to form government and ball is now governor’s court.

India's trade deficit widened to $13.72 bn in April from $13.69 bn in March. Exports rose 5.2% y-o-y to $13.7 bn and imports rose 4.6% to $39.6 bn.

Lupin posted a net loss of Rs 783.5 crore in the fourth quarter ended March due to a one-time write-off of Rs 1464 cr on the Gavis acquisition. Revenue fell 5.2% to Rs 4034 cr. EBIDTA fell 25.6% to Rs 699 cr and operating margin fell to 17.3% from 22.1% y-o-y.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.3%-0.7% and SGX Nifty is suggesting about 60 points lower start for our market.

After Nifty crossed the 10785 hurdle on Friday, we had given upside target of 10950-10970. Yesterday, after touching a high of 10929, Nifty slipped to end at 10802 and is set to open lower today.

After yesterday's move, immediate support has moved up to 10760, a breach of which will generate a "Sell" on the hourly chart and would pave the way for further correction. 20-DMA, placed around 10670, would be the next support to eye if that happens.

10929, the top made yesterday, is now the immediate hurdle, a crossover of which is required for fresh upmove.

Traders are advised to exit longs if Nifty sustains below 10760.

ITC, Tata Steel, JSW Steel and Hindalco will report their quarterly earnings today.

ALL EYES ON KARNATAKA ELECTION RESULTS

ALL EYES ON KARNATAKA ELECTION RESULTS

WORLD MARKETS

Dow added 0.3% while S & P 500 and Nasdaq rose 0.1% each with the Dow extending the winning streak to eighth straight day as US-China trade concerns abated.

Trump, in a Sunday tweet, pledged to help Chinese technology firm ZTE Corp to "get back into business, fast" after a U.S. ban had significantly hampered the Asian company.

Trump's tweet on comes ahead of the second round of trade talks between the U.S. and China this week. Commerce Secretary Wilbur Rosssaid he hoped good relations between Trump and Xi would help to bring an agreement on trade matters, although he also acknowledged that the gap between the countries "remains wide."

US crude rose 26 cents to $70.96 after an OPEC report showed the global oil glut was virtually eliminated. Brent crude surged $1.11 to $78.44, taking the Brent-WTI gap to more than $7, its highest in nearly five months.

European markets, except 0.3% higher Italy, lost upto 0.2%.

AT HOME

It was a day of consolidation as benchmark indices ended little changed after trading in about half a percent range through the session. Sensex settled at 35557, up 21 points while Nifty ended absolutely flat at 10807. BSE mid-cap and small-cap indices however tumbled 0.9% and 1% respectively. BSE Consumer Durable and Telecom indices were the top losers among sectoral indices, down 2.5% and 1.1% respectively while Bankex and Oil & Gas indices gained 0.2% each, becoming top gainers.

FIIs net bought stocks, index futures and stock futures worth Rs 718 cr, 201 cr and 118 cr respectively. DIIs were net buyers to the tune of Rs 687 cr.

Rupee depreciated 22 paise to end at fresh 15-month low. The 10-year bond yield hit a 27-month high at 7.825%.

Retail inflation rose to 4.58% in April from 4.28% in March, overturning a three month slide from its peak. Core CPI rose 30 bps y-o-y to 5.8%. Wholesale inflation grew 3.18% in April, up from 2.47% in March and hitting a 4-month high as prices of some vegetables as well as petrol, diesel soared.

Prime Minister Narendra Modi yesterday temporarily assigned charge of the ministries of finance and corporate affairs to railway minister Piyush Goyal till Arun Jaitley recovers from a kidney transplant, while removing the controversy-scarred Smriti Irani from the high-profile I&B ministry, which will now be handled by Rajyavardhan Rathore.

HUL earnings beat estimates on all the counts. Net profit rose 14.2% to Rs 1351 cr and sales rose 12% to Rs 9097 cr. EBIDTA rose 30% to Rs 2148 cr and operating margin expanded to 23.4% from 21.5%. Volume growth stood at 11%.

OUTLOOK

Big event to watch out today would be Karnataka assembly election results. 113 seats are needed for a simple majority in 225 seat assembly.

Today morning, Nikkei and Shanghai are little changed but Hang Seng is down about half a percent. SGX Nifty is suggesting a marginally lower start for our market. After Nifty crossed the 10785 hurdle on Friday, we have been working with next target area of 10950-10970. Nifty, yesterday, after touching a high of 10835, closed at 10806 and is set to open below 10800 today.

10950-10970 continues to be upside target area. Immediate support on the hourly chart has moved up to 10730, with the stop-loss of which, trading longs should be held on to.

Lupin, Britannia and PNB will report their quarterly earnings today.

NIFTY TAKES OUT 10785 HURDLE; STAY LONG WITH THE STOP-LOSS OF 10700

NIFTY TAKES OUT 10785 HURDLE; STAY LONG WITH THE STOP-LOSS OF 10700

WORLD MARKETS

Nasdaq ended marginally in the red while Dow and S & P 500 gained 0.4% and 0.2% respectively. Dow extended the winning streak to seventh straight day.

Chipmaker Nvidia reported better-than-expected earnings and revenue, while giving upbeat guidance.

Oil fell nearly 1% to settle at $70.70.

In Europe, FTSE and Italy gained 0.3% and 0.5% respectively while DAX and CAC fell 0.2% and 0.1% respectively.

For the week, US indices climbed 2.3%-2.7%. In Europe, FTSE and DAX added 2.1% and 1.4% respectively while CAC rose 0.4%. In Asia, Hang Seng soared 4% while Shanghai and Nikkei rose 2.3% and 1.3% respectively.

US oil rose 1.4% for the week while Brent was up nearly 3%.

Trump said in a tweet on Sunday that he was working with Chinese President Xi Jinping to give Chinese telecommunications equipment maker ZTE "a way to get back into business, fast."

AT HOME

After a flattish start, benchmark indices saw a sustained northward move through the session to end with gains of 0.8% each, closing at the highest level since 1st February, 2018. Sensex added 290 points to settle at 35535 while Nifty finished at 10806, up 90 points. BSE mid-cap index rose 0.4% while small-cap index fell 0.1%. BSE Metal index soared 1.6%, becoming top gainer among the sectoral indices, followed by 1.1% higher Bankex and Oil & Gas indices. Telecom index tumbled 4.2%, becoming top loser, followed by 1.2% lower Consumer Durable index.

FIIs net sold stocks worth Rs 325 cr but net bought index futures and stock futures worth Rs 864 cr and 560 cr respectively. DIIs were net buyers to the tune of Rs 1163 cr.

Rupee depreciated 2 paise to end at 67.3250/$.

India's industrial production growth slowed to a five month low of 4.4% in March from 7% in February.

OUTLOOK

Karnataka registered its highest voter turnout at 72.13% in the assembly elections held on Saturday. Exit polls have sent out mixed signals. One of the five major exit polls gave simple majority to BJP at the upper level of the range, one to Congress and rest three predicted a hung assembly. Markets would now watch out for actual result, which will be out tomorrow.

Today morning, Nikkei is little changed but Hang Seng and Shanghai are up 1% and 0.5% respectively. SGX Nifty is suggesting a flattish start for our market.

Nifty, on Friday, touched a high of 10812 before closing at 10806, taking out the 10785 hurdle decisively. 10970, as we have been mentioning, is now the next upside target to eye.

10700 is the immediate support on the hourly chart, with the stop-loss of which, existing longs should be held on to.

HUL will report its quarterly earnings today.

NIFTY RETREATS AFTER TESTING 10785 HURDLE

NIFTY RETREATS AFTER TESTING 10785 HURDLE

WORLD MARKETS

US indices gained 0.8%-0.9% with the Dow extending the winning streak to sixth straight day, following the release of weaker-than-expected U.S. inflation data.

Data from labor department showed consumer price index rose 0.2% in April, lesser than the expected 0.3% rise. This eased concerns about the Federal Reserve tightening monetary policy at a faster rate than the market is expecting. Weekly jobless claims remained near a 48-year low at 211,000.

10-year treasury yield, which broke above 3% mark on Wednesday, slipped following inflation data to 2.966%.

US oil rose 22 cents to $71.36 and Brent added 19 cents to $77.40 a barrel.

European markets, except 1% lower Italy, gained 0.2%-0.6%. The yield on Italian government 10-year bonds rose to a seven-week high following news that former Prime Minister Silvio Berlusconi will not stand in the way of a new coalition government.

The Bank of England held interest rates steady, after a first-quarter slowdown in economic growth tarnished the case for higher borrowing costs.

AT HOME

After gaining about four tenth of a percent in the opening trade, benchmark indices saw a sustained downward move through the session to end lower by a fifth of a percent, breaking 3-day winning streak. Sensex settled 73 points lower at 35246 while Nifty finished at 10716, down 25 points. BSE mid-cap and small-cap indices plunged 1.5% and 1.4% respectively. BSE Realty index tumbled 2%, becoming top loser among the sectoral indices, followed by 1.6% lower Power index. Energy and Oil & Gas indices were the top gainers, up 0.6% and 0.5% respectively.

FIIs net sold stocks and stock futures worth Rs 365 cr and 318 cr respectively but net bought index futures worth Rs 111 cr. DIIs were net buyers to the tune of Rs 901 cr.

Rupee depreciated 5 paise to end at 67.30/$.

Asian Paints expectation beating double digit volume growth while revenue rose 14.7% to Rs 4484 cr. EBIDTA was up 18.5% at Rs 840 cr and margin rose to 18.7% from 18.1%. PAT was up 5% at Rs 495 cr.

For Titan, revenue was a miss but operational performance was strong. Revenue rose 11.7% to Rs 4126 cr. EBITDA was up 67.4% at Rs 455 cr and margin expanded 380 bps to 11.6%. Net profit soared 41% to Rs 282 cr.

ZEE reported strong 24% ad-revenue growth. Revenue was up 24% at Rs 1725 cr. EBIDTA rose 8% to Rs 506 cr. Margin fell to 29.3% from 30.7%. Adjusted net profit was down 21% at Rs 230 cr.

OUTLOOK

Today morning, Nikkei and Hang Seng are up just under a percent while Shanghai is marginally lower. SGX Nifty is suggesting about 50 points higher start for our market.

For last few sessions, we have been mentioning that a crossover of 10785, the top made last week, is required for a fresh upmove. Yesterday, Nifty, after touching a high of 10785, slipped to end at 10716 and is set to open above 10750 today.

10785 continues to be immediate hurdle above which 10950 would be the next target to eye.

10600, the bottom made last week, continues be immediate support, below which, around 10500 would be the next support.

IIP for March will be out today and is expected to show a growth of 6.1%.

Karnataka assembly elections will be held tomorrow and counting will take place on Tuesday. On Monday market will react to exit polls which will be out after elections tomorrow. In the 224-seat Karnataka assembly, Congress and BJP had won 122 and 40 seats respectively in 2013 elections. According to most of the surveys, Congress seems to have the edge over the BJP and the result could very well be neck and neck.

NIFTY CLOSES IN ON 10785 HURDLE

NIFTY CLOSES IN ON 10785 HURDLE

WORLD MARKETS

US indices soared 0.8%-1% as energy shares jumped on the back of a strong rally in oil prices.

U.S. oil rose 3% to settle at $71.14 per barrel and Brent soared 3.2% to reach $77.21, both hitting a 3-1/2 year high, after Trump, on Tuesday said that the U.S. would be walking away from the Iran deal and that sanctions on the Middle Eastern country would be reinstated..

The 10-year Treasury yield broke above the 3% and two-year note yield also traded at its highest level in nearly a decade.

European markets gained 0.2%-1.3% with FTSE on the top.

AT HOME

Sensex and Nifty gained 0.3% and 0.2% respectively to close at the highest level since 1st and 2nd February respectively. Sensex added 103 points to settle at 35319 while Nifty added 24 points to finish at 10741. BSE mid-cap and small-cap indices however fell 0.6% and 0.1% respectively. BSE IT and Teck indices rose 0.7% and 0.6% respectively, becoming top gainers among sectoral indices while Power index fell 0.6%, becoming top loser, followed by half a percent lower Utilities and Healthcare indices.

FIIs net sold stocks worth Rs 704 cr but net bought index futures and stock futures worth Rs 217 cr and 110 cr respectively. DIIs were net buyers to the tune of Rs 665 cr.

Rupee depreciated 18 paise to end at 67.26/$.

Eicher Motors reported strong, in-line with expected numbers. Profit, on the back of one-time loss of Rs 187 cr, was flat at Rs 461.5 cr. Revenue rose 34% to Rs 2528 cr. EBIDTA grew 36% to Rs 797 cr and margin rose 56 bps to 31.5%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.3%-1% and SGX Nifty is suggesting a flattish start for our market.

Nifty, after failing to clear the 10770 hurdle decisively, which is the two third retracement level of the entire 11171-9951 fall, has been in a consolidation mode. 10785-10600, the top and bottom made last week, are the boundaries of this consolidation phase, a crossover of which, on either side, is required for a fresh move. Above 10785, 10950 would be the next target to eye. Below 10600, 10515 would be the next support.

Asian Paints, Titan and ZEE Entertainment will report their quarterly earnings today.

10785-10600 CONTINUES TO BE IMMEDIATE RANGE

10785-10600 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS

US indices, after falling about half a percent following announcement from President Trump that he was withdrawing the U.S. from the Iran nuclear deal signed three years ago, recouped all the losses to end flat.

Back in 2015, the Obama administration and Iran signed a deal to defer sanctions on oil exports from Iran, while Iran curbed its nuclear program. Yesterday, Trump said the U.S. was pulling out of that deal and restoring sanctions.

According to media reports, Iran said it will stay committed to the agreement and will continue negotiating with other parties to the deal.

WTI crude, after plunging more than 4%, recovered to end 2.4% lower at $69.06 a barrel and Brent fell 0.6% to $75.71, also paring back an earlier decline of 4%.

Dollar rose 0.4% to 93.08, it's highest since late December 2017. US treasury yields rose slightly.

Main European markets ended with modest cuts. Italy however tumbled 1.6% as uncertainty over the country's future government loomed.

AT HOME

Benchmark indices ended little changed after trading in half a percent range through the day. Sensex settled 8 points higher at 35216 while Nifty finished at 10718, up 2 points. BSE mid-cap index lost 0.1% while small-cap index rose 0.1%. BSE Bankex soared 1.3%, becoming top gainer among the sectoral indices, followed by 1.1% higher Realty index. Capital Goods and Consumer Durable indices were the top losers, down 0.8% each.

FIIs net sold stocks and index futures worth Rs 97 cr and 94 cr respectively but net bought stock futures worth Rs 461 cr. DIIs were net buyers to the tune of Rs 923 cr.

Rupee appreciated 5 paise to end at 67.07/$.  

OUTLOOK

Today morning, Nikkei and Shanghai are trading with modest cuts while Hang Seng is up 0.4%. SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had reiterated the view that 10785, the top made last week, is the immediate hurdle, a decisive crossover of which is required for a fresh upmove. Nifty, after touching a high of 10758, slipped to end at 10718 and is set to open around 10700 today.

10785 continues to be immediate hurdle, upon decisive crossover of which 10950 would be the next target.

10600, the bottom made last week, is the immediate support, below which 10515 would be the next downside target.

Eicher Motors will report its quarterly earnings today.