REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

REFORM PUSH, ELECTION RESULT TO GIVE WINGS TO NIFTY; 7928 HURDLE EYED

WORLD MARKETS

US indices surged between 1%-1.6% on Friday as investors bet on further stimulus from central banks and corporations including General Electric and Morgan Stanley reported profits that topped expectations.

New-home construction climbed 6.3% in August, signalling improvement in the U.S. residential real-estate market. The preliminary read for consumer sentiment in October came in at 86.4 versus a 84.0 estimate.

In prepared remarks, Fed Chair Janet Yellen voiced concern about income inequality in the United States, saying by some accounts, it is near its highest level in the past 100 years. On Thursday, St. Louis Fed President James Bullard had said that the central bank should think about postponing the end of its bond purchases.

European markets climbed between 2%-3.5%. The Bank of England's Chief Economist, Andrew Haldane, said the central bank may need to keep interest rates lower for longer to reduce the chances of an economic stagnation.

Nymex crude rose 0.1% to $82.8 a barrel, down 3.6% week on week; gold fell 0.2% to $1239 an ounce, posting weekly gain of 1.4%.

For the week, Dow and S & P 500 lost 1% each and Nasdaq was down 0.4%. European markets, except a 0.7% higher DAX, lost between 0.5%-2.6% for the week.

                                                             

AT HOME

Benchmark indices managed to end higher by four tenth of a percent after a choppy trading session. Sensex gained 109 points to settle at 26108 while Nifty finished at 7780, up 31 points. BSE mid-cap index gained 0.3% while the small-cap index lost 0.3%. Except a 4% and 2.7% fall in BSE IT and Teck indices, all other sectoral indices ended higher with Bankex and Capital Goods indices leading the tally, putting on 2.5% and 1.9% respectively. 

FIIs net sold stocks and stock futures worth Rs 1430 cr and 159 cr respectively but net bought index futures worth Rs 1030 cr. DIIs were net buyers to the tune of Rs 737 cr.

Rupee appreciated 39 paise to close at 61.44/$.

Axis Bank reported better-than-expected 20% rise in NII at Rs 3525 cr for the quarter ended September. Net profit rose 18.3% to 1611 cr which was in-line with estimates. Gross and Net NPAs remained unchanged from previous quarter at 1.34% and 0.44%.

For the week, Sensex and Nifty lost 0.7% and 1% respectively, extending the losing streak to fourth straight week.

OUTLOOK

Today morning Nikkei is up more than 3% and other Asian markets are up between 0.5%-1.5%.

BJP came out with flying colors in the assembly election held recently. In Haryana, the party got a majority on its own for the first time, winning 47 of the 90 seats, up from a meagre four in the last elections. In Maharashtra, BJP won 122 of 288 seats, increasing the tally from just 46 seats and emerging as the single largest party.

Taking a major decision on Saturday, government deregulated diesel price. As a result, diesel price fell by Rs 3.37 a litre from Sunday and will move in tandem with international cost henceforth. In another long pending issue, government hiked natural gas tariff to $5.61 per mmbtu from the current $4.2 per mmbtu. The price will be revised every six months.

Reacting to these developments, SGX Nifty is suggesting a whooping 125 higher opening for our market.

This gap up opening would bring Nifty very close to the important 7928 resistance, which is the immediate previous top on the daily chart, a crossover of which is required to break the lower-top lower-bottom formation. 8000 followed by 8160 would be next targets to eye in that case.