NIFTY REBOUNDS FROM THE VICINITY OF 8545 SUPPORT; 8715 CONTINUES TO BE IMMEDIATE TARGET

NIFTY REBOUNDS FROM THE VICINITY OF 8545 SUPPORT; 8715 CONTINUES TO BE IMMEDIATE TARGET

WORLD MARKETS                             

Dow and S & P 500 ended marginally lower while Nasdaq, aided by gains in apple, rose 0.6% yesterday.

Federal Reserve, as expected, kept interest rates unchanged but noted that the labor market has "strengthened" and that "near-term risks to the economic outlook have diminished."

Apple climbed 6.5% for its best day since April 2014 after reporting better-than-expected earnings. The firm also gave strong current-quarter revenue guidance and posted iPhone and iPad shipments above estimates. Coca-Cola fell 3.3% after missing on revenue and cutting organic revenue forecasts for the year.

US oil fell $1 or 2.3% to $41.92 a barrel after the EIA reported a surprise crude stock build of 1.7 million barrels.

Dollar index, after initially spiking following the Fed announcement ended lower about a third of a percent. Gold gained $6 to $1327 an ounce, a two week high.

European markets gained 0.4%-1.2%

AT HOME

Benchmark indices managed to end with modest gains after a roller-coaster session ahead of the expiry of the July derivative series. Sensex settled at 28024, up 48 points while Nifty added 25 points to finish at 8616. BSE mid-cap and small-cap indices gained 0.6% and 0.5% respectively. BSE Telecom index gained 1.3%, becoming top gainer among the sectoral indices, followed by 0.9% uptick in Finance index and Bankex.

FIIs net bought stocks and index futures worth Rs 405 cr and 83 cr respectively but net sold stock futures worth Rs 213 cr. DIIs were net sellers to the tune of Rs 152 cr.

Rupee appreciated 13 paise to end at 67.14/$.

Yes Bank reported better-than-expected 32.8% growth in net profit at Rs 732 cr. NII increased 24.2% to Rs 1317 cr. Asset quality remained stable as gross NPA were at 0.79% as against 0.76% q-o-q and net NPA remained unchanged at 0.29%.

Bajaj Auto was a miss on profit which rose 2.2% to Rs 978 cr on revenue of Rs 6089 cr, which were up 3.5% and in-line. Sales volume fell 1.8% y-o-y to 9.94 lac units due to weakness in exports. Net realization fell 6% to Rs 57825 per unit. Operating profit grew 3.2% to Rs 1176 cr and margin contracted by 10 bps to 19.3%, both of which were a miss.

HDFC reported better-than-expected 37.5% growth in standalone net profit at Rs 1871 cr. Total income increased 19.4% to Rs 8382 cr.  NII rose 9.6% to Rs 2234 cr. Gross GNPAs rose to 0.75% from 0.7% q-o-q. NIM fell to 3.8% from 4%.

Dabur's net profit jumped 11.8% to Rs 293 cr and total income grew 1.1% to Rs 1928 cr. Volume growth stood at 4.1% and missed the estimate. Margins increased to 18.1% from 16.8% y-o-y.

Union Cabinet yesterday approved amendments to the GST Constitutional Act. The Cabinet has removed the controversial one percent manufacturing tax from the Constitutional Bill, which was one of the demands of the Opposition, led by Congress. The government has also included five years compensation clause for state governments for any loss that they may incur. Earlier, this time period was mentioned as 'up to' five years in the draft GST Bill. The Bill will also mention that dispute resolution will be decided by the GST council.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent with Nikkei leading the losses and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had reiterated the view that 8545 is the immediate support on the hourly chart with the stop loss of which trading longs can be held on to.

The benchmark, after touching a low of 8572, rebounded to close at 8616, holding on to the support mentioned above.

8545-8550 continues to be immediate support, a breach of which will generate a sell on the hourly chart and would pave the way for the further correction. On the way up 8700-8715 continues to be immediate target above which 8845 would be the next major target.

Stay long with the stop-loss of 8545 continues to be the advise.