BROADER MARKETS GAINS WHILE NIFTY CONSOLIDATES

BROADER MARKETS GAINS WHILE NIFTY CONSOLIDATES

WORLD MARKETS

US indices ended little changed yesterday after rebounding from initial lower levels, digesting big gains made last week.

Nymex crude dipped to a more-than two-year low below $80 a barrel before recovering to $81, and reminded of global growth concerns.

Existing home sales remained almost flat in September.

European markets ended with cuts ranging from 0.4%-2.4% after closely watched German business sentiment index declined in October for a sixth consecutive month and hit a near two-year low, increasing worries about Europe's biggest economy.

Italy fell the most as nine out of the 25 euro zone banks that failed the ECB stress test were Italian.

                                                             

AT HOME

After a gap up opening, benchmark indices saw a gradual downward move through the session to end with cuts of about a third of a percent, breaking five day winning streak. Sensex lost 98 points to settle at 26753 while Nifty finished at 7992, down 23 points. BSE mid-cap and small-cap indices however gained 0.2% each. BSE Realty index plunged 3.8%, becoming top loser among the sectoral indices, followed by 1.4% cut in Oil & Gas index. Consumer Durable index climbed 2.1%, becoming top gainer, followed by 0.5% rise in Bankex.

FIIs net bought stocks and index futures worth Rs 49 cr and 680 cr respectively but net sold stock futures worth Rs 210 cr. DIIs were net buyers to the tune of Rs 10 cr.

Rupee depreciated 2 paise to close at 61.30/$.

HUL reported in-line-with estimated 8.1% y-o-y growth in September quarter net profit at Rs 988 cr supported by exceptional gain of Rs 33 cr and higher revenue growth. Adjusted net profit rose 6.5% to Rs 939 cr. Total income grew 10.8% to Rs 7639 cr. Volume growth stood at 5%, down from 6% same quarter last year. Operating margin declined 30 bps to 16.3%.

The World Bank yesterday said that India's growth story is on track with its economy set to grow by 6.4% in FY16 and at 7% in FY17 versus 5.6% in FY15. The agency also forecasts FY15 inflation (WPI) at 4.3% and current account deficit at 2%.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher opening for our market.

After five days of upmove, yesterday was a day of consolidation as Nifty ended lower by three tenth of a percent after a gap up opening.

We have been mentioning that for turning the near term view decisively bullish, Nifty needs to regain higher-top higher-bottom formation on the daily chart. The benchmark has already confirmed a higher-top when 7928 was crossed last Tuesday. Now a higher-bottom needs to be formed for which benchmark should not retrace more than 61.8% of the 7723-8064 upmove seen over past couple of days.

7934, the 38.2% retracement level of this upmove, would be the first support, with the stop loss of which trading longs can be held on to.

We were working with 8030 as the first target above 7928, which has been achieved. 8130 continues to be next target.

US Fed starts its two day policy meeting today and is widely expected to declare the end of its quantitative easing program when it releases its statement Wednesday.