NIFTY ACHIEVES 8595 TARGET; 8680 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 8595 TARGET; 8680 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

While Dow managed to end 0.2% higher, S & P 500 and Nasdaq fell 0.2% and 0.6% respectively as fall in oil weighed on the sentiment and gains in Boeing offset sharp losses in Apple.

WTI and Brent oil fell 1.6% each to settle at $49.18 and $49.98 per barrel respectively despite data from the U.S. Energy Information Administration that showed U.S. crude stockpiles fell 553,000 barrels in the previous week.

The October services PMI index jumped to 54.8 from 52.3, while new home sales rose 3.1% in September. Mortgage applications fell 4.1% last week, despite lower mortgage rates.

Dollar index, after touching a low of 98.33, recovered to end at 98.62, previous close being 98.73. Gold fell $7 to $1267 per ounce.

Main European markets gave away 0.1%-0.8%. Italy and Spain however added 0.3% and 0.4% respectively.

AT HOME

After starting lower by about four tenth of a percent, benchmark indices extended the down move through the session to end lower by nine tenth of a percent. Sensex lost 255 points to settle at 27837 while Nifty finished at 8615, down 76 points. BSE mid-cap and small-cap indices lost 0.9% and 0.7% respectively. Except a 0.8% and 0.4% rise in Telecom and Consumer Durables indices respectively, all the BSE sectoral indices ended in red with Bankex leading the tally, down 1.9%, followed by 1.4% each cut in Metal and Industrial indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1451 cr, 232 cr and 388 cr respectively. DIIs were net buyers to the tune of Rs 989 cr.

Rupee depreciated 1 paise to end at 66.83/$.

Hero Motocorp reported better-than-expected 27.7% y-o-y growth at Rs 1004 cr, the highest ever absolute figure, on strong operational performance and volume growth. Revenue rose 15% to Rs 8449 cr. EBIDTA grew 25% to Rs 1369 cr while margin expanded by 129 bps to 16.2%.

HUL profit during July-September quarter grew by 11.5% y-o-y to Rs 1,096 crore. Revenue grew by 1.6% to Rs 8,480 crore. Volume disappointed, declining 1% as against expectation of 3-4% growth. EBIDTA rose 5% to Rs 1405 cr while margin expanded by 55 bps to 16.56%.

ITC reported 10.5% y-o-y growth in July-September quarter net profit at Rs 2500 cr. Total income rose 8% to Rs 13616 cr.  EBIDTA was up 7.3% at Rs 3630 cr while margins were almost flat at 26.7% as against 26.8% y-o-y. Cigarette revenue grew 7% to Rs 8528 cr.

HDFC posted 13.8% y-o-y growth in second quarter net profit at Rs 1826.5 cr. Income from operations grew 9.6% to Rs 8063 cr. 

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally lower start for our market.

In yesterday's report we had mentioned that "8650, which is the immediate previous bottom on the hourly chart, is the immediate support, upon breach of which 8595, the 61.8% retracement level of the recent 8506-8737 upmove, would be the next downside target to eye."

Yesterday, Nifty broke 8650 support in the initial trade itself and plunged all the way to 8596 before closing at 8615, achieving the 8595 target mentioned above and vindicating our view.

8595 continues to be immediate support to eye a breach of which would open up the possibility of the retest of 8507 bottom made on 17th October.

Immediate resistance on the hourly chart is placed around 8680, with the stop-loss of which trading shorts can be held on to.

Maruti, Tech Mahindra, ONGC, IOC and TVS Motors will report their quarterly earnings today.