Friday, February 16, 2018

10638-10398 CONTINUES TO BE IMMEDIATE RANGE


10638-10398 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS

Dow and S & P 500 rose 1.2% each while Nasdaq climbed 1.6% to extend winning streak to fifth straight day, despite interest rates reaching multi-year highs.

Jobless claims increased by 7,000 to 230,000, rebounding from a near 45-year low. The producer price index rose 0.4% in January, in line with expectations.

WTI crude rose 1.2% to $61.34 on the back of weak dollar and comments from Saudi Arabia that major oil producers would prefer tighter markets than to end supply cuts too early

European markets gained upto 1.1% with France on the top.

AT HOME

After gaining more than a percent in the morning, benchmark indices gave away more than half of the gains in late noon sell-off to end higher by just four tenth of a percent. Sensex settled 141 points higher at 34297 while Nifty added 44 points to finish at 10545. BSE mid-cap and small-cap indices tumbled 0.5% and 1.3% respectively. BSE Telecom and Industrial indices fell 1.2% and 0.9% respectively to become top losers among sectoral indices while Oil & Gas and Metal indices were the top gainers, up 1% and 0.7% respectively.

FIIs net sold stocks worth Rs 240 cr but net bought index futures and stock futures worth Rs 537 cr and 548 cr respectively. DIIs were net buyers to the tune of Rs 50 cr.

Rupee appreciated 18 paise to end at 63.91/$.

Trade deficit widened to a 56-month high at USD 16.86 in January as exports rose 9% to USD 24.38 bn and imports surged 26.1% to USD 40.68 bn.

India's wholesale inflation, as measured by WPI, eased to a 6-month low of 2.84% in January from 3.58% in December.

OUTLOOK

Markets in China, Hong Kong, Taiwan, South Korea, Malaysia and Vietnam are shut today. Nikkei is up nearly a percent and SGX Nifty is suggesting about 40 points higher start for our market.

Nifty has been in a consolidation mode after hitting a low of 10276 last week. As mentioned yesterday, 10638-10398, the top and bottom made on last Thursday and Friday respectively, is the immediate range to work with. A crossover of 10638 can take Nifty to 10725, which is the 50% retracement level of the recent 11171-10276 fall. On the way down, below 10398, 10276 would be the crucial support to eye.

Thursday, February 15, 2018

NIFTY EXTENDS CONSOLIDATION WITHIN 10638-10398 RANGE


NIFTY EXTENDS CONSOLIDATION WITHIN 10638-10398 RANGE

WORLD MARKETS

US indices gained 1%-1.9%, extending the winning streak to fourth straight day.

US consumer price index rose 0.5% last month, topping the 0.3% forecast. Retail sales decreased 0.3% last month, compared to projection of 0.2% increase.

The yield on the 10-year U.S. Treasury note jumped to 2.92%, its highest levels in four years following the inflation data release.

US crude rallied 2.4% to $60.60 and Brent climbed 2.6% to $64.36 a barrel on the back of weaker greenback and a less-than-expected rise in U.S. crude inventories.

European markets gained 0.6%-1.8% with Italy leading the gains. Eurozone GDP increased 0.6% from the previous three months.

AT HOME

After gaining about half a percent in the opening trade, benchmark indices ended lower by four tenth of a percent on the back of last hour sell-off. Sensex settled 144 points lower at 34155 while Nifty lost 39 points to finish at 10500. BSE mid-cap and small-cap indices however managed to gain 0.2% each. BSE Bankex nosedived 1.6%, becoming top loser among the sectoral indices, followed by 0.7% Power and Healthcare indices. Energy and Telecom indices were the top gainers, up 0.8% and 0.7% respectively.

FIIs net sold stocks worth Rs 729 cr but net bought index futures and stock futures worth Rs 1039 cr and 98 cr respectively. DIIs were net sellers to the tune of Rs 152 cr.

Rupee appreciated 23 paise to end at 64.09/$.

PSU Banks, led by PNB, collapsed after PNB detected some fraudulent transactions worth Rs 11,300 crore in its Mumbai branch.

Sun Pharma reported 75% drop in December quarter net profit at Rs 365 cr hit by plunging US sales and one-time deferred tax adjustment of Rs 513 cr. Revenue fell 16% to Rs 6653 cr. EBIDTA margin stood at 21.2%.

OUTLOOK

Markets in China, South Korea, Taiwan and Vietnam are closed today for the Lunar New Year holiday. Hang Seng and Nikkei are up a percent and half. SGX Nifty is suggesting about 80 points higher start for our market.

In yesterday's report we had mentioned that Nifty is in a consolidation mode after making a bottom of 10276 on 6th February and that 10638-10398 is the immediate range to work with. Nifty, after making a high of 10590 in the opening trade, slipped to end at 10500, extending the consolidation within the above mentioned range.

A higher opening today would take the benchmark close to 10600 mark. 10638, the top made last Thursday, continues to be immediate hurdle above which 10725, the 50% retracement level of the recent 11171-10276 fall, would be the next target to eye. 10398, the bottom made on Friday, continues to be immediate support, below which, 10276 would be the crucial support to eye.

Wednesday, February 14, 2018

10638-10398 IS THE IMMEDIATE RANGE


10638-10398 IS THE IMMEDIATE RANGE

WORLD MARKETS

US indices gained 0.2%-0.4%, extending the winning streak to third straight day.

Treasury yields slipped from Monday's four-year highs to trade at 2.831% ahead of the release of heavily anticipated U.S. inflation data on Wednesday.

Dollar index fell about half a percent to 89.73.

European markets fell 0.1%-1.4% with Italy leading the losses.

US oil fell 10 cents to settle at $59.19.

AT HOME

Benchmark indices ended with gains of about eight tenth of a percent after a choppy trade. Sensex added 295 points to settle at 34300 while Nifty finished at 10540, up 85 points. BSE mid-cap and small-cap indices surged 1.3% and 1.6% respectively, extending their outperformance. Except 0.4% and 0.3% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Power and Realty indices leading the tally, up 1.9% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 814 cr and 1481 cr respectively but net bought stock futures worth Rs 38 cr. DIIs were net buyers to the tune of Rs 1343 cr.

Rupee appreciated 8 paise to end at 64.32/$.

CPI, a measure of retail inflation, fell to 5.07% in January, from 5.21% in December. IIP, a measure of factory output, stood at 7.1% in December as compared to 8.8% in November.

The Reserve Bank of India has released a new overarching framework for bad loan resolution, to be used across the Indian banking sector. The new rules put an end to a series of stressed asset schemes which had been introduced over the past few years. Instead, a strict 180-day timeline has been prescribed over which banks must agree on a resolution plan. And if they fail to do so, large stressed accounts must be immediately referred for resolution under the Insolvency and Bankruptcy Code (IBC).

OUTLOOK

Today morning, except a marginally lower Nikkei, other Asian markets are trading with gains of 0.3%-1%. SGX Nifty is trading around 10550, suggesting a marginally higher start as compared to Monday's close of Nifty futures.

Last week, Nifty, after making a bottom of 10276 on Tuesday, rebounded to touch a high of 10638 on Thursday and has been in a consolidation mode for last two days.

10638 is the immediate hurdle, above which 10725, the 50% retracement level of the recent 11171-10276 fall, would be the next target to eye. On the way down, 10398, the bottom made on Friday, is the immediate support below which 10276 would be the crucial support to eye.

Friday, February 9, 2018

10276 CONTINUES TO BE MAJOR SUPPORT; 10638 IMMEDIATE HURDLE


10276 CONTINUES TO BE MAJOR SUPPORT; 10638 IMMEDIATE HURDLE

WORLD MARKETS

US markets nosedived 3.8%-4.2% after treasury yields rebounded to near four-year highs on the back of BoE statement and strong jobs data.

The benchmark 10-year U.S. note yield rose to 2.88% after The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest level in nearly 45 years.

The Bank of England (BOE) held rates steady, but said that it might need to hike rates faster and more frequently than previously expected to keep inflation in check.

Oil fell for the fifth straight day with WTI down 64 cents, or 1% at $61.15 and Brent down 70 cents, or 1.1% to $64.81 a barrel after Iran announced plans to increase production.

European markets fell 1.5%-2.6%.

AT HOME

Benchmark indices ended with gains of a percent to break seven-day losing streak. Sensex added 330 points to settle at 34413 while Nifty finished at 10577, up 100 points. BSE mid-cap and small-cap indices outperformed yet again, climbing 1.8% and 2.2% respectively. Except a 0.2% lower Oil & Gas index, all the BSE sectoral indices ended in green with Healthcare and Realty indices leading the tally, up 2.9% and 2.5% respectively.

FIIs net sold stocks worth Rs 2297 cr but net bought index futures and stock futures worth Rs 244 cr and 1302 cr respectively. DIIs were net buyers to the tune of Rs 2378 cr.

Rupee appreciated 3 paise to end at 64.26/$.

ACC reported 128% y-o-y jump in net profit at Rs 206 cr, driven by strong operational as well as sales performance. Revenue grew by 29.5% to Rs 3494 cr. Operating profit rose 54.2% to Rs 443 cr and margins expanded 200 bps to 12.7%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 2%-3% and SGX Nifty is suggesting about 200 points lower start for our market.

Nifty yesterday gained 100 points to end at 10577 and a gap down today will take it below 10400.

As we have been mentioning, 10276, the bottom made on Tuesday, continues to be crucial support to eye as it roughly coincides with the important 34-week moving average placed around 10200.

On the way up, 10638, the top made yesterday, is the immediate hurdle above which 10725, the 50% retracement level of the recent 11171-10276 fall, would be the next hurdle to eye.

SBI, BoB, ONGC, M & M and Tata Steel will report their quarterly earnings today.

Thursday, February 8, 2018

10725 ABOVE 10614; 10276 CONTINUES TO BE IMPORTANT SUPPORT


10725 ABOVE 10614; 10276 CONTINUES TO BE IMPORTANT SUPPORT

WORLD MARKETS

US indices reversed morning gains to end with cuts of 0.1%-0.9% with Nasdaq losing the most following a rise in the treasury yields.

The 10-year yield traded at 2.845% amid news that U.S. Senate leaders had come to an agreement over a two-year budget agreement ahead of a Thursday deadline that would have resulted in a government shutdown.

Oil tumbled to touch one-month low after data showed US crude inventories and production rose last month. WTI crude fell 2.5% to $61.79 while Brent lost 2% to settle at $65.51 a barrel.

Chicago Fed President Charles Evans said that no rate hikes are needed before mid-2018. Dallas Fed President said that rising U.S. wages may not push inflation higher.

European markets gained 1.6-2.9%.

AT HOME

After gaining more than a percent at the open, benchmark indices saw a sustained downward move through the session to end with modest losses, extending the losing streak to seventh straight day. Sensex settled at 34082, down 113 points while Nifty lost 21 points to finish at 10476. Broader market however outperformed with BSE mid-cap and small-cap indices up 0.4% and 2% respectively.  BSE Oil & Gas and Realty indices climbed 1.7% and 1.5% respectively, becoming top gainers among the sectoral indices while Telecom index was the top loser, down 1.1%, followed by 0.6% lower Teck and IT indices.

FIIs net sold stocks and index futures worth Rs 1022 cr and 1751 cr respectively but net bought stock futures worth Rs 1242 cr. DIIs were net buyers to the tune of Rs 461 cr.

Rupee depreciated 3 paise to end at 64.27/$.

Cipla posted 4.8% rise in net profit at Rs 403.5 cr and revenue growth of Rs 7.3% at Rs 3914 cr. Operating profit rose 21.1% to Rs 819 cr and margin expanded 230 bps to 20.9%.

Aurobindo Pharma came out with largely in-line with estimated numbers. Net profit rose 2.8% to Rs 595 cr and revenue rose 11.2% to Rs 4369 cr. Operating margin stood at 23.7%.

OUTLOOK

Today morning, Shanghai is down nearly a percent but Nikkei and Hang Seng are up 0.6% each. SGX Nifty is suggesting about 50 points higher start for our market.

In yesterday's report we had mentioned that Nifty, on Tuesday, had rebounded after testing crucial support zone between 20 and 34-week moving averages placed at 10400 and 10180 respectively and 10276, the bottom made on that day, is the important support to eye. We had also said that 10725 followed by 10875, the 50% and 67% retracement levels of the recent 11171-10276 fall, are the resistance levels to eye on the way up

Nifty, after touching a high of 10614 at the open, eased to end at 10476 and is set to open above 10500 today.

10614, the top made yesterday, is the immediate hurdle above which 10725 would be next target to eye.

10276 continues to be important support.

ACC will report its quarterly earnings today.

Wednesday, February 7, 2018

NIFTY REBOUNDS AFTER TESTING CRUCIAL SUPPORTS; 10725, 10875 HURDLES ON THE WAY UP

NIFTY REBOUNDS AFTER TESTING CRUCIAL SUPPORTS; 10725, 10875 HURDLES ON THE WAY UP

WORLD MARKETS

After witnessing wild swings through the session, US indices ended with gains of 1.7%-2.3%.

The Cboe Volatility index broke above 50 in early trading Tuesday before sliding down to 29.69. It had closed at 37.32 on Monday. The surge in volatility also triggered massive selling in other volatility instruments. The VelocityShares Daily Inverse VIX Short-Term exchange-traded note (XIV), which allows traders to bet against the VIX, lost nearly all of its value yesterday.

The benchmark 10-year yield traded around 2.75%.

Oil fell with Brent down 1.2% at $66.86 a barrel and WTI down 1%.

European markets fell 2.1%-2.6%

AT HOME

After plunging nearly three and a half percent in the initial trade, benchmark indices recouped more than half of the losses to end lower by about a percent and half. Sensex settled at 34196, down 561 points while Nifty lost 168 points to finish at 10498. BSE mid-cap and small-cap indices fell 1.7% and 2.2% respectively. All the BSE sectoral indices ended in red with IT and Consumer Durable indices leading the tally, down 2.8% and 2.7% respectively.

FIIs net sold stocks and index futures worth Rs 2326 cr and 1638 cr respectively but net bought stock futures worth Rs 1437 cr. DIIs were net buyers to the tune of Rs 1700 cr.

Rupee depreciated 18 paise to end at 64.24/$.

Hero Motocorp reported largely in-line with estimated numbers. Net profit rose 4% y-o-y to Rs 805 cr on revenues which were 15% higher at Rs 7305 cr. Ebidta rose 7% to Rs 1158 cr while operating margins fell to 15.9% from 16.9%.

Lupin nosedived after reporting 65% y-o-y fall in consolidated net profit at Rs 222 cr due to continued pricing pressure in the US and weak operational performance. Revenue fell 11.3% to Rs 3977 cr. Operating profit fell 43.5% to Rs 689 cr and margin contracted 990 bps to 17.3%.

PNB's earnings missed expectations but asset quality improved. Net profit rose 11% y-o-y to Rs 230 cr and NII rose 7% to Rs 3989 cr. Gross NPA ratio improved to 12.11% from 13.31% q-o-q and Net NPA ratio fell to 7.55% from 8.44%.

OUTLOOK

Today morning, Asian markets are trading with gains of 1%-3.3% with Nikkei on the top and SGX Nifty is suggesting about 100 points higher start for our market.

Monetary Policy Committee, at the end of two-day meeting, is likely to keep interest rates unchanged. However the tone of the policy will be important to guage the probability of future interest rate changes. Key points to watch out would be the March 2019 inflation forecast as well as opinion on MSP hike and fiscal deficit picture presented in the union budget gone by.

In yesterday's report we had mentioned that 10400 and 10200, where 20 and 34-week moving averages were placed respectively, were the important downside supports to eye. Nifty, after touching a low of 10276, rebounded sharply to close at 10498 and is set to open around 10600 today.

10725 followed by 10875, the 50% and 67% retracement levels of the recent 11171-10276 fall, are the resistance levels to eye on the way up.


10276, the bottom made yesterday, is now the important support to eye.

Tuesday, February 6, 2018

GLOBAL SELL-OFF IN EQUITIES; 10400, 10200 NEXT SUPPORTS FOR NIFTY

GLOBAL SELL-OFF IN EQUITIES; 10400, 10200 NEXT SUPPORTS FOR NIFTY

WORLD MARKETS

US markets nosedived 3.8%-4.6% with the Dow and S & P 500 giving back all of their 2018 gains and S & P 500 suffering worst fall in more than six years on persisting worries over rising interest rates. Dow and Nasdaq fell the most since June 2016 and August 2017.

Benchmark 10-year yield rose to 2.88%, its highest in four years, before trading around 2.75%.

Dollar index rose about half a percent to 89.63. Oil fell with WTI down 2% at $64.15 and Brent down 1.4% at $67.62 a barrel.

European markets fell 0.8%-1.6%.


AT HOME

After falling more than a percent and half at the open, benchmark indices nearly half of the losses through the session to end lower by nine tenth of a percent. Sensex settled at 34757, down 310 points while Nifty lost 94 points to finish at 10666. BSE mid-cap and small-cap indices outperformed, falling just 0.1% and 0.4% respectively. BSE Capital Goods and Finance indices tumbled 2.6% and 1.5% respectively, becoming top losers among the sectoral indices while Telecom and Auto indices were the top gainers, up 1.7% and 0.7% respectively.

FIIs net sold stocks and index futures worth Rs 1264 cr and 555 cr respectively but net bought stock futures worth Rs 597 cr. DIIs were net buyers to the tune of Rs 1164 cr.

Rupee depreciated 1 paise to end at 64.07/$. 10-year bond yield rose to 7.605% from 7.562%.

India's January Nikkei Services PMI improved to 51.7, up from 50.9 in December. Composite PMI however fell to 52.5 from 53.

Tata Motors missed street estimates with consolidated profit of Rs 1215 cr, which was up nearly 11-fold y-o-y but down 51% q-o-q and much lower than market estimates. Revenue rose 16% to Rs 74156 cr. EBIDTA rose 80% to Rs 8671 cr and margins expanded 420 bps to 11.7%.

Colgate Palmolive reported better-than-expected 34% y-o-y growth in December quarter net profit at Rs 171 cr. Revenue rose 18.2% to Rs 1033 cr. Operating profit grew 32% to Rs 282 cr and margins expanded 280 bps to 27.3%.

OUTLOOK

Today morning, Asian markets are trading with deep cuts of 2%-5% with Nikkei leading the losses and SGX Nifty is suggesting about 300 points lower start for our market.

In yesterday's report we had mentioned that below 34-DMA support of 10700, 10600, the 50% retracement level of the 10033-11171 upmove since December bottom, will be the next important support to eye. Nifty, after touching a low of 10587 at the open, recovered to end at 10666 but is set to open around 10400 today.

Now 10400 is the level which coincides with 20-week moving average as well as the 67% retracement level of the 10033-11171 upmove seen since December bottom and hence a crucial support to eye. If 10400 is taken out decisively then 10200, where 34-week moving average is placed, would be the next crucial support to eye.

10700, the top made yesterday, which also coincides with 34-DMA, will now act as immediate hurdle, until the crossover of which, bias will continue to be negative.

Yesterday, we had advised booking some profit in short position around 10600. Remaining profit can be booked today between 10400-10300.


Hero Motocorp, Lupin and PNB will report their quarterly earnings today.