8600 CONTINUES TO BE IMMEDIATE SUPPORT; 8750-8800 TARGET AREA
US indices fell 0.1%-0.2% yesterday, digesting a sharp fall in oil prices, key U.S. economic data and a key European Central Bank decision on interest rates.
After hitting a 15-month high on Wednesday, US oil fell 2.3% yesterday to settle at $50.43 per barrel. Brent lost 2.5% to $51.38.
Economic data was mixed. Existing home sales rose 3.2% last month to 5.47 million, their highest since June. Leading indicators for September rose 0.2%. Weekly jobless claims rose by 13,000 to 260,000, but notched their 85th straight week coming in below 300,000, the longest period since 1970. The Philadelphia Federal Reserve Business Index for October came in at 9.7, below September's 12.8.
Travelers beat estimates on both earnings and revenues, while Verizon missed on revenue while beating on profits. American Express surged 9% after reporting better-than-expected results. EBay dropped 11%, despite beating Street estimates, after lowering its earnings guidance for the fourth quarter.
Dollar index rose to a more than seven month high of 98.32, up from previous day's 97.85. Gold fell $2.40 to $1267.50 per ounce.
The ECB kept interest rates unchanged, as was widely expected. ECB President Mario Draghi said that, while extending the central bank's current QE program beyond its March 2017 deadline was not discussed at this meeting, he did say the central bank will preserve very substantial amount of monetary policy support.
European markets gained between 0.1%-1.2%
After rising about eight tenth of a percent in the initial trade, benchmark indices gave away some of the gains through the session to end higher by about half percent. Sensex added 145 points to settle at 28130 while Nifty finished at 8699, up 40 points. BSE mid-cap and small-cap indices gained 0.1% and 0.5% respectively. BSE Bankex and Metal indices climbed 1.4% each, becoming top gainers among the sectoral indices while Healthcare and IT indices were the top losers, down 0.4% and 0.25% respectively.
FIIs net bought stocks and stock futures worth Rs 7 cr and 589 cr respectively but net sold index futures worth Rs 396 cr. DIIs were net buyers to the tune of Rs 583 cr.
Rupee depreciated 14 paise to end at 66.81/$.
Yes Bank reported better-than-expected quarterly results with net profit rising 31% y-o-y to Rs 802 cr. NII grew 30.5% to Rs 1446 cr. Asset quality was stable with gross non-performing assets as a percentage of gross advances rising 4 basis points to 0.83% QoQ. Net NPA was unchanged at 0.29%.
Earnings of Reliance Industries beat estimates on all counts supported by strong performance in Petchem segment. Standalone net profit rose 17.9% y-o-y to Rs 7704 cr. Revenue fell 0.3% to Rs 64344 cr. Gross Refining Margin stood at $10.10 a barrel against $11.50 q-o-q and $10.60 y-o-y. Petchem revenue grew 7.3% to Rs 21293 cr. Segment EBIT rose 38% and margin expanded by 370 bps to 16.3%. Refining revenue rose 1.1% to Rs 51838 cr with EBIT rising 9.3% and margin expanding 90 bps to 11.4%.
Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.
Just to reiterate after Nifty took out immediate hurdle of 8630, we have been working with a target area of 8770-8800.The benchmark touched a high of 8727 before closing at 8699, moving closer to the above mentioned target.
8750-8800 continues to be important target as well as resistance area to eye as 34-DMA as well as a downward sloping trendline adjoining recent tops on the daily chart are palced around 8750 while 8800 is the top made on the surgical strike day.
8600 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.
HCL Tech, ACC, Wipro and Cairn India will report their quarterly earnings today.