DOLLAR INDEX TUMBLES TO 16-MONTH LOW; NIFTY ON TRACK TO TEST 34-DMA

DOLLAR INDEX TUMBLES TO 16-MONTH LOW; NIFTY ON TRACK TO TEST 34-DMA

WORLD MARKETS                             

US indices gained 0.7%-0.9% as consumer discretionary and financials stocks gained. Weaker dollar also helped.

U.S. dollar index lost half a percent for a sixth-straight day of decline and hit its lowest since January 2015 after ISM manufacturing data for April came in at 50.8, down from 51.8 in March. The final Markit U.S. manufacturing PMI fell to 50.8 in April from 51.5 in March.

Apple extended recent declines for its first eight-day losing streak since the one ended July 28, 1998.

Nymex oil fell 2.5% or $1.14 to $44.78 a barrel and Brent shed 3.3% amidst report that OPEC production was near all-time peaks.

Euro topped $1.15 to its highest since Aug. 26 and the yen traded at $106.46, the strongest level since October 2014. Gold hit $1306, it’s highest since Jan 22, 2015.

In Europe, DAX and CAC gained 0.8% and 0.3% respectively while Italy fell a percent. FTSE was shut for a holiday. Manufacturing PMI for the euro zone increased to 51.7 in April, beating flash estimates of 51.5 and up from March's 51.6. For Germany, April manufacturing PMI came in at 51.8, up from March's 50.7 figure.

AT HOME

After falling nearly a percent in the morning trade, benchmark indices recouped some of the losses to end lower by about six tenth of a percent. Sensex lost 170 points to settle at 25437 while Nifty ended at 7806, down 44 points. BSE mid-cap and small-cap indices however gained 1.1% and 0.4% respectively. BSE Bankex and Telecom indices lost 1.3% and 0.8% respectively, becoming top losers among the sectoral indices while Basic Material and Consumer Durable indices gained 1.3% and 1.1% respectively, becoming top gainers.

FIIs net bought stocks worth Rs 435 cr but net sold index futures and stock futures worth Rs 1340 cr and 410 cr respectively. DIIs were net sellers to the tune of Rs 110 cr.

Rupee depreciated 12 paise to end at 66.44/$.

Maruti reported 13% y-o-y jump in April sales at 1.26 lakh units. Bajaj Auto's sales fell 2% to 3.3 lakh units. Eicher recorded 42% rise in total sales at 48197 units. HeroMoto Corp showed 15% growth at 6.1 lac units. TVS Motor reported 16% uptick at 2.27 lac units while Tata Motors sold 39763 vehicles, a growth of nearly 10%.

HDFC reported 40% y-o-y jump in net profit at Rs 2607 cr, aided by proceeds of Rs 1520 cr from sale of investment in HDFC Standard Life. NII rose 4.8% to Rs 2469 cr. Provisions jumped to Rs 545 cr from Rs 68 cr on sequential basis. Provisions included Rs 450 cr towards standard assets and other contingencies. Asset quality was stable with gross NPA at 0.7% vs 0.72% q-o-q. NIM was lower at 3.9% vs 4%.

India's core sector grew at a 16-month high of 6.4% in March as against 5.7% in February. Electricity output grew at 11.3% against 9.2% while Cement production rose 11.9% Vs 13.9%. Fertiliser grew at 23% vs 16%.

OUTLOOK

Today morning, except a flattish Shanghai, other Asian markets are trading with cuts of 0.3%-1.3% and SGX Nifty is suggesting about 25 points lower opening for our market.

Nifty, after being resisted at 7980 mark, generated a sell on the hourly chart on Thursday below 7865 and touched a low of 7777 before closing at 7806.

We have been working with the downside target of 34-DMA which has now moved up to around 7710 and that continues to be the view.

7900 continues to be immediate hurdle on the hourly chart with the stop loss of which short positions can be held on to. Profit booking is advised as 7710 approaches.

Adani Port will report its quarterly earnings today.