Thursday, November 23, 2017

10360 IS THE IMMEDIATE HURDLE; 10230 SUPPORT

10360 IS THE IMMEDIATE HURDLE; 10230 SUPPORT

WORLD MARKETS                             

Nasdaq gained 0.1% but S & P 500 and Dow fell 0.1% and 0.3% respectively.

Minutes from the Federal Reserve showed the central bank's officials have started to worry that market prices are getting out of hand and are posing a danger to the economy. Policymakers were largely positive about the economy, even though some officials had concerns about inflation.  Still, the notes reflected that Fed members thought gradual interest rate hikes were likely

U.S. durable goods orders for October dipped 1.2%, below the 0.3 percent increase expected.

U.K. cut its growth forecasts for 2017 from 2% to 1.5%. Ahead, growth is expected to fall to 1.3% in 2019 and 2020.

In Europe, FTSE rose 0.1% but DAX and CAC fell 1.2% and 0.25% respectively.

AT HOME

Benchmark indices ended with modest gains after rangebound but choppy trade, extending the winning streak to fifth straight day. Sensex gained 83 points to settle at 33562 while Nifty finished at 10342, up 15 points. BSE mid-cap index ended marginally in the red while small-cap index rose 0.2%. BSE Industrial and Consumer Discretionary Goods & Services indices gained 0.5% and 0.4% respectively, becoming top gainers among the sectoral indices while Telecom and Metal indices were the top losers, down 1.2% and 0.7% respectively.

FIIs net sold stock and stock futures worth Rs 441 cr and 231 cr respectively but net bought index futures worth Rs 142 cr. DIIs were net buyers to the tune of Rs 837 cr.

Rupee depreciated 4 paise to end at 64.93/$.

OUTLOOK

Today morning, Shanghai is down 0.2% while other Asian markets are trading with modest gains. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had said that 10340-10360 is the immediate resistance zone with 10340 being 61.8% and 10360 being two third retracement level of recent 10490-10094 fall.

Nifty yesterday rose 15 points to finish at 10342 and is set to open flat today.

10360 continues to be immediate hurdle, upon crossover of which, 10490 would be the next target.

Immediate support on the hourly chart is placed around 10230, with the stop-loss of which, existing longs should be held on to.


U.S. markets will also be closed for Thanksgiving Day on Thursday.

Wednesday, November 22, 2017

10340-10360 IS THE IMMEDIATE RESISTANCE ZONE; 10230 SUPPORT

10340-10360 IS THE IMMEDIATE RESISTANCE ZONE; 10230 SUPPORT

WORLD MARKETS                             

US indices climbed 0.6%-1.1% to record highs following a rally in tech stocks and strong earnings from some of the biggest U.S. companies like Medtronic, Hormel Foods and Dollar Tree.

On Monday, President Trump said before a cabinet meeting that his administration was going to "give the American people a huge tax cut for Christmas."

On the data front, the Chicago Fed National Activity Index rose in October. Existing home sales rose more than expected in October.

U.S. crude added 0.7%, or 41 cents, to $56.83 per barrel, while Brent rose 0.6%, or 35 cents, to $62.57.

European markets gained 0.3%-0.6%.

AT HOME

Benchmark indices gained nearly a third of a percent, extending the winning streak to fourth straight day. Sensex added 118 points to settle at 33478 while Nifty finished at 10327, up 28 points. BSE mid-cap and small-cap indices gained 0.1% and 0.4% respectively. BSE Consumer Durable and Healthcare indices climbed 2% and 1.8% respectively, becoming top gainers among sectoral indices while Realty and FMCG indices were top losers, down 1.3% and 0.2% respectively.

FIIs net sold stocks and stock futures worth Rs 727 cr and 1434 cr respectively but net bought index futures worth Rs 878 cr. DIIs were net buyers to the tune of Rs 825 cr.

Rupee appreciated 21 paise to end at 64.89/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.3%-0.9% and SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had reiterated the view that 10340, the 61.8% retracement level of the recent 10490-10094 fall, is the immediate hurdle upon sustained trading of which 10490 would be the next target.

Yesterday, Nifty after touching a high of 10358, retreated to end at 10327 but is set to open higher today.

10360 is the two-third retracement level of the 10490-10094 fall which makes 10340-10360 immediate resistance zone, a crossover of which is required for a fresh upmove and 10490 would be the next upside target if that happens.


Meanwhile, immediate resistance on the hourly chart has moved up to 10230, with the stop-loss of which, trading longs should be held on to.

Tuesday, November 21, 2017

10340-10215 CONTINUES TO BE IMMEDIATE RANGE

10340-10215 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

US indices gained 0.1%-0.3%.

In economic data, leading indicators rose 1.2% in October.

U.S. crude fell 0.8% or 46 cents to $56.09, while global benchmark Brent was down 0.8$ or 50 cents at $62.22 a barrel.

Euro fell on news that German Chancellor Angela Merkel's efforts to form a coalition government had failed, thus making the political outlook for Europe's largest economy uncertain. Merkel later said that she would prefer new elections to leading a minority government

European markets gained 0.1%-0.5%.

AT HOME

Benchmark indices ended with modest gains after a rangebound trade, extending the winning streak to third straight day. Sensex added 17 points to settle at 33360 while Nifty finished at 10299, up 15 points. BSE mid-cap and small-cap indices outperformed, rising 0.6% and 0.8% respectively. BSE Realty and Utilities indices climbed 2.2% and 1.4% respectively, becoming top gainers among sectoral indices while IT and Teck indices were the top losers, down 0.4% and 0.2% respectively.

FIIs net sold stocks and stock futures worth Rs 359 cr and 613 cr respectively but net bought index futures worth Rs 211 cr. DIIs were net buyers to the tune of Rs 613 cr.

Rupee appreciated 3 paise to end at 64.99/$.

Cement stocks fell on reports that government is considering banning import of pet coke — a cheap but a widely-polluting fuel used by cement, paper, brick kiln, chemicals and textile industries.

OUTLOOK

Today morning, Shanghai is flat while Nikkei and Hang Seng are up 1% and 0.7% respectively. SGX Nifty is suggesting a flattish start for our market.

In Yesterday's report we had reiterated the view that 10340, the 61.8% retracement level of the 10490-10094 fall, is the immediate hurdle, a crossover of which is required for a fresh upmove.

Nifty yesterday gained 15 points to finish at 10299 and is set to open flat today.

10340 continues to be immediate hurdle, upon sustained trading of which, 10490 would be the next major target to eye.


Meanwhile, 10215 continues to be immediate support, with the stop-loss of which, trading longs should be held on to.

Monday, November 20, 2017

10340 IS THE IMMEDIATE HURDLE; 10215 IMMEDIATE SUPPORT

10340 IS THE IMMEDIATE HURDLE; 10215 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.2%-0.4% on Friday on worries over tax reforms.

Treasury Secretary Steven Mnuchin said he expects a Republican tax reform bill to be sent to President Trump by Christmas. House passed a bill aimed at overhauling the tax code on Thursday and the Senate now has to vote on their tax plan.

European markets fell upto 0.8%.  European Central Bank President Mario Draghi told an audience in Frankfurt that the ECB needs to be patient when normalizing monetary policy because despite the improved economic growth in the 19-member area, inflation remains subdued.

US crude jumped 2.6% to $56.55 and Brent gained 2% to settle at $62.59 a barrel, breaking five-day losing streak and retracing much of the week's losses

For the week, Dow and S & P 500 fell 0.4% and 0.2%, extending the losing streak to second week but Nasdaq gained 0.5%. European markets fell 0.6%-1.1%. In Asia, Nikkei and Shanghai fell 1.2% and 1.4% respectively while Hang Seng rose 0.3%.

AT HOME

After climbing a percent and quarter in the opening trade on the back of Moody's upgrade, benchmark indices gave away nearly half the gains through the session to end higher by nearly seven tenth of a percent. Sensex settled at 33343, up 236 points while Nifty added 69 points to finish at 10284. BSE mid-cap and small-cap indices gained 1% and 0.8% respectively. Except 1.4% and 1.1% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green, with Realty and Metal indices leading the tally, up 3.7% and 1.8% respectively.

FIIs net bought stocks and index futures worth Rs 1277 cr and 518 cr respectively but net sold stock futures worth Rs 805 cr. DIIs were net buyers to the tune of Rs 1467 cr.

Rupee appreciated 30 paise to end at 65.02/$.

For the week, Sensex gained 0.1% but Nifty lost 0.4%.

Indusind Bank and Yes Bank will replace Cipla and Lupin in Sensex from December 18.

OUTLOOK

Today morning, Hang Seng is up 0.2% but Nikkei and Shanghai are down 0.4% and 0.6% respectively and SGX Nifty is suggesting a marginally higher start for our market.

In Friday's report we had mentioned that, 10340, the 61.8% retracement level of the recent 10490-10090 fall, is the immediate hurdle on the way up above which 10490 itself would be the next target to eye.

Nifty, after touching a high of 10343 in first hour, eased to end at 10283 and is set to open marginally higher today.

10340 continues to be immediate hurdle, a crossover of which is required for fresh upmove. 10490 would be next target if that happens.


Meanwhile, immediate support on the hourly chart is placed at 10215, with the stop-loss of which, trading longs should be held on to.

Friday, November 17, 2017

NIFTY SET TO SOAR ON MOODY’S UPGRADE; 10340 NEXT HURDLE

NIFTY SET TO SOAR ON MOODY’S UPGRADE; 10340 NEXT HURDLE

WORLD MARKETS                             

Dow and S & P 500 climbed 0.8% each while Nasdaq soared 1.3% after House Republicans passed a tax reform bill and strong quarterly results from Wal-Mart and Cisco. Nasdaq hit intraday and closing records.

U.S. House Republicans passed a bill to cut taxes on businesses and individuals, the biggest step yet in the GOP's effort to alter the country's tax system. The House plan cuts the corporate tax rate to 20% from 35% and lessens the number of personal tax brackets to four from seven.

Industrial production grew 0.9% in October, compared to the 0.5% forecast.

Oil extended the fall with Brent down 0.8% to $61.36 per barrel and WTI off 0.3% at $55.14 on increasing U.S. production and inventories.

European markets gained 0.2%-0.8%. Retail sales numbers in the U.K. came in higher-than-expected, showing an increase of 0.3% month-on-month in October. A second reading of euro zone inflation showed the headline annual inflation rate at 1.4% in October.

AT HOME

After a marginally higher start, benchmark indices saw a sustained northward move through the session to end with gains of nearly a percent and broke three-day losing streak. Sensex soared 346 points to settle at 33107 while Nifty finished at 10215, up 97 points. BSE mid-cap and small-cap indices gained 1.1% each. All the BSE sectoral indices ended in green with IT index leading the tally, up 2.2%, followed by 1.3% higher Power and Telecom indices.

FIIs net sold stocks, index futures and stock futures worth Rs 447 cr, 75 cr and 499 cr respectively. DIIs were net buyers to the tune of Rs 847 cr.

Rupee depreciated 11 paise to end at 65.32/$.

Aiming to boost sales of affordable houses, the cabinet yesterday approved an increase in the carpet area of houses eligible for interest subsidy under credit linked subsidy scheme (CLSS) for the middle income group under the Pradhan Mantri Awas Yojana (Urban).

OUTLOOK

Today morning, Shaghai is down about half a percent but Nikkei and Hang Seng are up 1.5% and 0.8% respectively.

In a significant development rating agency Moody's has upgraded the Government of India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive, citing continued progress in the nation’s economic and institutional reforms.

Owing to this news, SGX Nifty is suggesting a 90 points higher start for our market.

In yesterday's report we had mentioned that 10090, the 50% retracement level of the 9690-10490 upmove, is the immediate support and 10250 is the immediate hurdle.

Nifty yesterday soared 97 points to settle at 10215, and a higher opening today would take it close to 10300 mark.


10340, the 61.8% retracement level of the recent 10490-10090 fall, is the immediate hurdle on the way up above which 10490 itself would be the next target to eye.

Thursday, November 16, 2017

NIFTY TESTS 50% RETRACEMENT LEVEL; TRAIL STOP-LOSS TO 10250

NIFTY TESTS 50% RETRACEMENT LEVEL; TRAIL STOP-LOSS TO 10250

WORLD MARKETS                             

US markets fell 0.5%-0.6% with the Dow closing at three-week low as declines in oil prices weighed on energy-related stocks.

WTI crude fell 0.6% to $55.33 a barrel and Brent settled 34 cents lower at $61.87 on news that U.S. crude stockpiles had risen by 1.9 million barrels.

Retail sales rose 0.2% last month as against expectation of no change. The consumer price index edged up 0.1% in October, in line with expectations.

Treasury yields slipped after the data with the 10-year yield at 2.33% and two-year yield near 1.69%.

European markets fell 0.3%-0.6% hit by a downturn in commodity stocks and prices.

AT HOME

Benchmark indices tumbled around six tenth of a percent, extending losing streak to third straight day and closing at lowest level since 24th and 12th October for Sensex and Nifty respectively. Sensex lost 181 points to settle at 32760 while Nifty finished at 10118, down 69 points. BSE mid-cap and small-cap indices plunged 1% and 1.5% respectively. All the BSE sectoral indices ended in red with Metal and Telecom indices leading the tally, down 3% and 2.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 381 cr, 1325 cr and 592 cr respectively. DIIs were net buyers to the tune of Rs 869 cr.

Rupee appreciated 21 paise to close at 65.21/$.

OUTLOOK

Today morning, Shanghai is down 0.2% but Nikkei and Hang Seng are up 0.6% and 0.3% respectively. SGX Nifty is suggesting a marginally lower start for our market.

At the risk of repeating, we have been bearish on Nifty ever since 10380 support was taken out on 7th November and have been asking holding on to short positions with a trailing stop-loss. In Yesterday's report we had said that if 34-DMA, placed around 10160 gives way, 10090 and 9995, which are the 50% and 61.8% retracement levels of the entire 9690-10490 upmove, would be next downside targets to eye.

Nifty yesterday plunged all the way to 10094 before closing at 10118, nearly achieving the 10090 target.

As mentioned above, 10090 is the 50% retracement level of the entire 9690-10490 upmove and in case of even that not holding, 9994, the 61.8% retracement level of this upmove, would be the crucial support to eye.


Meanwhile, immediate resistance on the hourly chart has moved lower to 10250, with the stop-loss of which, trading shorts should be held on to.

Wednesday, November 15, 2017

NIFTY ACHIEVES 10180 TARGET; TRAIL STOP-LOSS TO 10280

NIFTY ACHIEVES 10180 TARGET; TRAIL STOP-LOSS TO 10280

WORLD MARKETS                             

US indices fell 0.1%-0.3% on worries over global growth and the progress of U.S. tax reforms.

GE extended Monday's fall by plunging 6% yesterday to reach lowest level since 2011.

Chinese data released on retail sales, industrial output and fixed asset investment growth all missed expectations.

In economic news, the U.S. producer price index rose 0.4% in October as against expectation of a 0.1% rise.

Brent crude lost 1.5% to settle at $62.21 per barrel and U.S. crude fell 1.9% to settle at $55.70 after the International Energy Agency reduced its projection for oil demand for this year and the next.

European markets ended with cuts of upto 0.6%. Basic resources fell the most following disappointing data from China. Germany's third quarter GDP growth at 0.8% topped the 0.6% estimate.

AT HOME

Benchmark indices fell nearly a third of a percent to end at three-week low. Sensex lost 92 points to settle at 32942 while Nifty finished at 10187, down 38 points. BSE mid-cap and small-cap indices fell 0.2% each. BSE Capital Goods and Telecom indices fell 1.4% and 1.3% respectively, becoming top losers among sectoral indices while Realty and Consumer Durable indices were the top gainers, up 0.7% and 0.6% respectively.

FIIs net bought stocks worth Rs 2577 cr but net sold index futures and stock futures worth Rs 821 cr and 1866 cr respectively. DIIs were net sellers to the tune of Rs 1 cr.

Rupee appreciated 1 paise to end at 65.41/$.

Sun Pharma reported better-than-expected numbers. Net profit fell 60% y-o-y to Rs 1002 cr and sales fell 15% to Rs 6590 cr. Margins were down from 38.3% to 20.7% but recovered from multi-quarter low to 17%. There was no comment on Halol plant however.

Bank Of Baroda reported improvement in asset quality along with good advance growth. Net profit fell 35% Y-o-y to Rs 355 cr. Gross NPA ratio improved to 11.16% from 11.4% q-o-q and net NPA ratio fell to 5.05% from 5.46%. Fresh slippages were down 41% to Rs 2586 cr. Net interest margin improved to 2.31 from 2.29%.

Trade deficit in October soared to a 3-year high of $14 bn as exports fell 1% to 23 bn.

India's wholesale inflation grew to 3.59%, hitting a six-month high in October, due to increase in prices of food and fuel products. In September, WPI stood at 2.6%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.3%-0.8% and SGX Nifty is suggesting about 30 points lower start for our market.

Just to reiterate, we had given downside targets of 10250 and 10180 after immediate support of 10380 was taken out. Nifty, after achieving first target on Monday, extended the fall yesterday to touch a low of 10175 before closing at 10186, achieving the second target and vindicating our view.

However, Nifty is expected to open below 10180 today and in that case we will have to search for next support levels. 10160 is where 34-DMA is placed, making it the next important support. If that gives way, 10090 and 9995, which are the 50% and 61.8% retracement levels of the entire 9690-10490 upmove, would be next downside targets to eye.


Meanwhile, immediate resistance on the hourly chart has moved lower to 10280, with the stop-loss of which, trading shorts should be held on to.

Tuesday, November 14, 2017

10180 NEXT; TRAIL STOP-LOSS TO 10350

10180 NEXT; TRAIL STOP-LOSS TO 10350

WORLD MARKETS                             

US indices gained 0.1% each amid dealmaking news, but a decline in GE, coupled with worries about tax reform, capped gains in the major indexes.

Proposed tax cuts were in focus, with President Donald Trump joining the fray and calling for additional amendments in the Republican plan.

GE shares fell 7.2% after the company issued weaker-than-expected guidance for 2018.

Brent crude slid 36 cents to $63.16 a barrel and U.S. crude settled 2 cents higher at $56.76.

European markets fell 0.2%-0.7%. Pound fell 0.6% against the dollar on growing concerns over the future of Theresa May as prime minister as media reports showed that a group of 40 Conservative members of parliament had agreed to sign a letter of no-confidence in the U.K. leader.

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session to end lower by about nine tenth of a percent, breaking two-day rising streak. Sensex lost 281 points to settle at 33033 while Nifty finished at 10225, down 97 points. BSE mid-cap and small-cap indices fell 0.2% and 0.4% respectively. Except a 0.2% higher IT index, all the BSE sectoral indices ended in red with Telecom and Metal indices leading the tally, down 1.9% and 1.8% respectively.

FIIs net sold stocks and stock futures worth Rs 234 cr and 339 cr respectively but net bought index futures worth Rs 279 cr. DIIs were net sellers to the tune of Rs 269 cr.

Rupee depreciated 28 paise to end at 65.43/$, the weakest level in six weeks.

India's retail inflation rose to 3.58% in October from 3.28% in September mainly due to an increase in prices of consumer food items.

OUTLOOK

Today morning, Nikkei and Hang Seng are up 0.5% and 0.3% respectively while other Asian markets are modestly lower. SGX Nifty is suggesting about 15 points lower start for our market.

We turned bearish on Nifty after immediate support of 10380 was taken out and had given downside target of 10250, followed by 10180.

The benchmark yesterday tumbled 97 points to finish at 10225, achieving the first target and moving towards the second.

10180, the 38.2% retracement level of the 9690-10490 upmove, continues to be the next downside target as well as the support to eye.


Immediate support on the hourly chart has moved lower to 10350, with the stop-loss of which, trading shorts should be held on to.

Monday, November 13, 2017

NIFTY REBOUNDS AFTER ACHIEVING 10250 TARGET; 10400 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 10250 TARGET; 10400 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

While Nasdaq ended flat, Dow and S & P 500 fell 0.2% and 0.1% respectively on Friday to extend Thursday's losses as Healthcare and energy stocks fell.

Brent crude fell 41 cents to $63.52 a barrel and U.S. West Texas Intermediate crude settled 43 cents lower at $56.74.

European markets fell 0.4%-0.7%

For the week, Dow and S & P 500 fell -0.3 and 0.1% respectively to sanp 8-week winning streak. Nasdaq fell 0.2% to break six-week rising streak. In Europe FTSE fell 0.1% but Dax soared 1.9% and CAC added 0.4%. In Asia Nikkei climbed 1.9% while Hang Seng and Shanghai rose 0.6% and 0.2% respectively.

Eleven countries have agreed on "core elements" in a regional trade pact from which the U.S. pulled out earlier this year. Japan has led talks for the trade deal, called the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), since the U.S. withdrew.

Saudi Arabia has called for an urgent Arab League minsterial meeting to discuss Iran's role in the region. The meeting, which comes on the back of elevated tensions, is expected to be held in Cairo.

AT HOME

Benchmark indices ended with modest gains after a choppy trade, extending the winning streak to second consecutive day. Sensex added 64 points to settle at 33315 while Nifty finished at 10322, up 13 points. BSE mid-cap index fell 0.1% while small-cap index gained 0.1%. BSE Capital Goods and Consumer Durable indices were the top gainers among sectoral indices, rising 1.9% and 1.4% respectively while Energy and Healthcare indices were the top losers, down 1.4% and 0.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 529 cr, 1785 cr and 125 cr respectively. DIIs were net buyers to the tune of Rs 1921 cr.

Rupee depreciated 23 paise to end at one-month low of  65.17/$.

For the week, Sensex and Nifty lost 1.1% and 1.2% respectively, breaking two-week winning streak.

Providing a big relief to India Inc and consumers alike, the GST Council decided on Friday to lower the tax rate on 178 items, leaving just 50 items in the top 28 per cent rate slab under the Goods and Services Tax.

Additionally, in a further relaxation to small and medium enterprises, which were facing a huge compliance burden under GST, the Council has decided to increase the threshold for the compositon scheme to an annual turnover of ₹1.5 crore. A uniform tax rate of 1 per cent will be levied under the scheme, which allows for quarterly filing of returns and payment of taxes. Eligible manufacturers with service activities with an annual turnover of up to ₹5 lakh will also be allowed in the scheme.

L & T reported better-than-expected 27% rise in September quarter net profit at Rs 1820 cr but said it won't be able to meet its order inflow guidance of a growth of 12-14% in FY18. Revenue grew by 5.7% to Rs 26447 cr. EBIDTA jumped 28% to Rs 2960 cr and margin expanded by 190 bps to 11.2%.

SBI reported 38% dip in September quarter net profit at Rs 1582 cr on higher provisions but asset quality improved on lower slippages. NII grew by 27.3% to Rs 18586 cr. Fresh slippages stood at Rs 9026 cr Vs Rs 26249 cr in the previous quarter.

M & M reported better-than-expected 22% rise in net profit at Rs 1411 cr. Revenue rose 19.4% to Rs 12018 cr. EBITDA soared 35.1% to Rs 1,923.4 cr while the operating margin rose 190 bps to 16%.

OUTLOOK

Today morning, Nikkei is down about half a percent while Hang Seng and Shanghai are up nearly a third of a percent. SGX Nifty is suggesting a marginally higher start for our market.

Readers would recall that we had given a downside target of 10250 after immediate support of 10380 was taken out. Nifty, on Friday, touched a low of 10254, nearly achieving this target and vindicating our view.

10250, the top made in mid-October, continues to be immediate support to eye. If that breaks, 10180, the 38.2% retracement level of the 9690-10490 upmove, would be the next important support to eye.

10400 continues to be immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 10490 would be the next upside target.


This makes 10400-10250 immediate range, a crossover of which, on either side, is required for taking a fresh view.

Friday, November 10, 2017

10250 CONTINUES TO BE IMMEDIATE SUPPORT; TRAIL-STOP LOSS IN SHORTS TO 10400

10250 CONTINUES TO BE IMMEDIATE SUPPORT; TRAIL-STOP LOSS IN SHORTS TO 10400

WORLD MARKETS                             

US indices fell 0.4%-0.6% on worries that a corporate tax cut could be delayed.

Senate Republicans released their tax plan, which contained several differences from a bill introduced by the House. While the bill also called for the corporate tax rate to be cut to 20% percent from 35 percent, that change would likely only come into effect in 2019,

Dollar index fell. Gold prices rose to $1285, their highest in around three weeks.

Brent crude gained 0.7% to $63.93 and U.S. crude rose 0.8% to $57.27 after Saudi Arabia's foreign minister called for sanctions to be imposed on Iran for its support of terrorism. Oil prices were also supported by planned cuts in crude exports from Saudi Arabia in December.

European markets fell 0.6%-1.5%. Basic resources stock fell the most tracking a drop in metal prices, with nickel down over 2.5%.

AT HOME

After falling nearly a percent from the opening high, benchmark indices recovered nearly half of the lost ground in the noon trade to end marginally higher. Sensex settled at 33251, up 32 points while Nifty added 6 points to finish at 10309. BSE mid-cap and small-cap indices surged 1% and 0.8% respectively. BSE Consumer Durable index soared 3.2%, becoming top gainer among sectoral indices, followed by 0.9% higher Consumer Discretionary Goods & Services indices. Healthcare indices were the top losers, down 0.3% each.

FIIs net sold stocks, index futures and stock futures worth Rs 714 cr, 1112 cr and 2288 cr respectively. DIIs were net buyers to the tune of Rs 231 cr.

Rupee appreciated 1 paise to end at 64.94/$.

Tata Motors reported a three-fold y-o-y jump in September quarter net profit at Rs 2502 cr, driven by better-than-expected JLR's operational performance. Consolidated revenue from operations (net of excise) rose 10.3% to Rs 70,156 crore. Consolidated operating profit was higher by 42.8% at Rs 9,010 crore and margin expanded by 280 basis points to 12.7%.

Auroindo Pharma reported better than expected 29% profit growth at Rs 781 cr. Margins improved 60 bps to 25.2%.

OUTLOOK

Today morning, Nikkei is down nearly a percent, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 40 points lower start for our market.

After Nifty broke the immediate support of 10380, we have been working with the downside taret of 10250. Nifty, yesterday, after touching a low of 10266, recovered to end at 10309 but is set to open lower today.

10250, the top made in mid-October, continues to be be immediate support below which 10180, where 38.2% retracement level of the 9690-10490 upmove is placed, will be the next support to eye.

Immediate hurdle on the hourly chart has moved to 10400, with the stop-loss of which, trading shorts should be held on to.

Markets will watch out for the announcement from the GST Council meeting in terms of reduction in GST rate on some items and further simplification and easing of regulations.


SBI and M & M will report their quarterly earnings today.

Thursday, November 9, 2017

NIFTY EXTENDS WEAKNESS AS EXPECTED; STAY SHORT WITH THE STOP-LOSS OF 10415

NIFTY EXTENDS WEAKNESS AS EXPECTED; STAY SHORT WITH THE STOP-LOSS OF 10415

WORLD MARKETS                             

Dow ended flat while S & P 500 and Nasdaq gained 0.1% and 0.3% respectively

Banks fell after Republicans lost key elections in New Jersey and Virginia on Tuesday which increase uncertainty around the GOP's plans to move forward with tax reform. Banks were also pressured by a flattening yield curve. The spread between the two and the 10-year U.S. bond yields hovered around 70 basis points, its lowest level in a decade.

Trump's tour of Asia also remained in the spotlight. Trump is expected to discuss issues relating to trade and North Korea with Chinese leaders in Beijing today. The president also took to Twitter to warn North Korea not to underestimate the U.S., repeating statements he had made when addressing South Korea's National Assembly on Wednesday.

In Europe, FTSE gained 0.2%, DAX ended flat while CAC and Italy fell 0.2% and 0.6% respectively. Financials and banking stocks underperformed on earnings and doubts over U.S. plans to reform the tax system.

AT HOME

Benchmark indices fell about half a percent, extending the losing streak to second straight day. Sensex lost 152 points to settle at 33219 while Nifty finished at 10303, down 47 points. BSE mid-cap and small-cap indices tumbled 0.8% and 1% respectively. Except 0.4% and 0.1% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Metal index leading the tally, down 1.6%, followed by 1.5% lower Energy and Telecom indices.

FIIs net sold stocks, index futures and stock futures worth Rs 3838 cr, 602 cr and 2288 cr respectively. DIIs were net buyers to the tune of Rs 3038 cr.

Rupee appreciated 8 paise to end at 64.95/$.

OUTLOOK

China October PPI and CPI have come in at 6.9% and 1.9% respectively, which are higher than the expected figures of 6.6% and 1.8% respectively.

Today morning, Nikkei is up 1.3%, Hang Seng is up 0.7% and other Asian markets are trading with modest gains. SGX Nifty is suggesting about 25 points higher start for our market.

After Nifty broke the immediate support of 10380 on Tuesday, we had given downside target range of 10250-10200 in yesterday's report and had advised holding on to short positions with the stop-loss of 10450.

Nifty yesterday touched a low of 10285 before closing at 10303 and is set to open modestly higher today.

10250, where previous top on the daily chart is placed, continues to be immediate support below which 10180, where 38.2% retracement level of the 9690-10490 upmove is placed, will be the next support to eye.

Immediate resistance on the hourly chart has moved lower to 10415, with the stop-loss of which, trading shorts should be held on to.

Tata Motors and Aurobindo Pharma will report their quarterly earnings today.

Two-day GST Council meeting begins today. On agenda would be pruning 28% list and libersalisation of composition scheme.

Himachal Pradesh goes to polls today with traditional rivals, the Congress and the BJP locking horns in all 68 constituencies